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Adam White is the President of the Association of Major Power Consumers in Ontario.
Mexico and other competing jurisdictions stand to capitalize from the monstrous megawatt rates Ontario imposes on manufacturers.
As an advocate for some of Ontario’s largest manufacturers, we fear the province’s long-term electricity plan is placing too high a financial burden on industry.
Our manufacturers are currently paying excessively high electricity rates for power the system doesn’t need; this surplus energy is then sold to our competitors in neighbouring jurisdictions (Quebec, New York, Michigan, Illinois) for a heavily discounted price. The math just doesn’t make sense.
Some of the big industries – pulp and paper mills, steel smelters and the like – have been able to control costs to a certain extent by shutting down production during the electricity system’s peak hours. But the majority of industrial customers have no options, no choice of electricity supplier and no ability to control their utility costs.
Energy is a significant cost for these companies. In their highly competitive environments, these firms cannot afford to raise prices to cover higher electricity costs. They operate with very tight margins. The effect of flat prices for their goods, and sharply rising energy costs, is grim. Profit disappears.
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