High hydro rates hurting business: OCC – by Carol Mulligan (Sudbury Star – July 9, 2015)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

The Greater Sudbury Chamber of Commerce is calling on the Ontario government to address the impact of rising electricity rates on businesses by increasing transparency and reducing the complexity of understanding hydro rates in the province.

The Sudbury chamber, which represents about 1,000 businesses, has added its voice to a report released Wednesday by the Ontario Chamber of Commerce, an umbrella organization representing 60,000 members in Ontario.

The report, Empowering Ontario: Constraining costs and staying competitive in the electricity market, makes five recommendations for government and energy agencies to curb rising hydro costs and help businesses survive.

If those measures aren’t taken, the report shows one in 20 businesses in Ontario, or 5%, could be out of business within five years.

Geoff Jeffery, a lawyer with Weaver Simmons LLP, is immediate past chair of the Greater Sudbury chamber.

Jeffery said the OCC released the report when electricity is in peak demand to draw attention to the impact high hydro rates are having and to make sure the provincial government is paying attention.

The OCC isn’t saying the Liberal government of Premier Kathleen Wynne has done nothing because it has made permanent the Northern Industrial Electricity Rate Program. That program offers hydro subsidies in the millions to large companies such as Vale and Glencore, but doesn’t benefit medium-sized companies.

It’s not a popular stand necessarily, but the Sudbury chamber supports selling part of Hydro One because most of the proceeds of that sale will go to retire the hydro debt.

It shares the fears of some people and organizations, however, that the sale could result in increased prices by competitive interests, “but overall we think at least it’s action that’s being taken by the government.”

The five recommendations from the year-long study are:

  • Increase transparency of electricity pricing and system cost drivers.
  • Keep the debt retirement charge on residential bills until it’s paid.
  • Incentivize voluntary consolidation of local distribution companies.
  • Move from a central procurement model to a more competitive capacity market structure.
  • Unlock the power of smart meter data by capitalizing on meter data analytics provincially.

The report points out the cost of electricity directly influences Ontario’s ability to attract and retain businesses and grow the economy. Historically, the strength and reliability of the system and its low cost contributed to the province’s competitive advantage, says the OCC in its report.

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