Miners worried: Hydro One sale could spell price troubles – by Jonathan Migneault (Sudbury Northern Life – November 6, 2015)


Electricity-hungry industry depends on competitive power rates

If the controversial privatization of Hydro One results in increased hydro prices, it could spell trouble for the province’s mining sector, says the Ontario Mining Association.

“We’re concerned, obviously,” said Chris Hodgson, the association’s president. “The mining market is not great, so if you want to stay in business you have to be competitive.”

Hodgson and other mining industry representatives were a Queen’s Park on Nov. 3, where they met with various MPPs for the annual Meet the Miners lobby day.

The province’s rising hydro rates were a big topic of discussion during the meetings, Hodgson said. Hydro costs represent around 15 per cent of a mine’s operating costs, and with smelting operations that can increase to 30, or even 50 per cent, Hodgson said.

Hydro is second only to labour for most mines’ operational costs.

On Nov. 1, the Ontario Energy Board increased hydro rates by 0.3 cents to 8.3 cents/kWh for off-peak hours; 0.6 cents to 12.8 cents/kWh for mid-peak hours; and 1.4 cents to 17.5 cents/kWh for on-peak hours.

The on-peak hydro rate in Ontario has increased by 77 per cent since 2010.

But even with increasing hydro rates, Hodgson said the power-hungry mining sector has benefited from programs like the Industrial Electricity Incentive Program, which cuts hydro costs for selected new companies, or new projects, by as much as 50 per cent.

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