By: Laura Steiner
Ontario’s Financial Accountability Officer has looked at the provincial Liberals’ plan to save consumers money their hydro bills.
According to Stephen LeClair, the Wynne government’s “Fair Hydro Plan” will cost the province $45 billion over the next 29 years while saving only $24 billion. The net savings will be closer to $21 billion.
“Temporary savings are achieved for electricity ratepayers by moving the costs to the Province and by deferring $18.4 billion in electricity costs for 10 years,” Leclair said. After a decade ratepayers will be required to repay deferred costs plus $21 billion in interest. According to LeClair that will result in higher electricity bills than the status quo.
The Liberals say the knew their plan would increase costs in the long-term. “We’ve always said that the proposed Fair Hydro Plan will cost more over the long term, but it will share the costs of our investments more fairly over a longer period of time, and lower bills by 25% on average starting this summer,” Energy Minister Glenn Thibeault’s office said in a written statement published by the Globe & Mail.
The plan will lower hydro rates by 24% this year, and limit increases to inflation rates for the next four. The FAO is forecasting rates will begin rising by 6.8%/ year in 2021 until 2027. Hydro prices will then rise an additional 4%/; higher than what currently exists in Ontario.
The N.D.P are concerned over how bad this will be for ratepayers. “People who are ratepayers right now are going to get hit hard starting five years from now and they’ll be hit hard for decades, quite literally,” NDP Energy Critic Peter Taubins said in the Toronto Sun.
The P.C.’s believe this is nothing more than a re-election plan. “I think a lot of people are seeing it for what it is; this is Kathleen Wynne’s re-election plan”, P.C. Energy Critic Todd Smith said.
Wynne first announced a cut to hydro prices in March, 2017. Under proposed legislation, the government would also take control of the Ontario Electricity Support Program, and launch an “Affordability fund.” Both opposition parties have said they would vote against it.