As Ontario residents and business owners continue to pay some of the highest hydro rates in the country due in part to increasing global adjustment rates, the local government is stepping in to help.
Ontario’s Finance Minister Rod Phillips announced the province will spend $1.6 billion more in 2020 to stabilize electricity rates for customers. The amount exceeds the $4 billion the government had previously budgeted for subsidies to keep prices stable. In 2017, the Fair Hydro Plan was enacted after public outcry over skyrocketing hydro prices escalated. Under the Plan, time-of-use-rates were lowered by 25% by removing a portion of the global adjustment from energy bills.
Ontario’s provincial government has also taken steps to clarify electricity bills, with more to be done in the future to protect businesses and ratepayers from rising energy costs. Under the new Ontario Electricity Rebate, eligible businesses are provided with a 31.8% rebate on their electricity bill. Also, the government now requires electricity bills to show the true cost of power as a single line item, which was concealed before.
Although some businesses in Ontario are eligible to receive the rebate on their hydro bills, many business owners say although the rebate provides some relief, their electricity bills are still much too high, forcing staff cuts and preventing economic growth. Moreover, the Fair Hydro rate does not apply to large industrial customers.
Around Ontario, people are looking for solutions and ways to ease the pain of high electricity bills. The provincial government is providing residents with free energy efficient upgrades for their homes, after a $100 million investment to reduce provincial energy costs. The program, the Affordability Fund, will provide Ontario consumers of any electrical utility with upgrades which can include anything from LED light bulbs to weather stripping, appliance upgrades and more.
As for large businesses, Ontario’s Industrial Conservation Initiative is providing a financial incentive to owners and operators to reduce electricity consumption during the five peak hours of the year. Nonetheless, this incentive only benefits customers who are able to adjust consumption without impacting operation.
The Global Adjustment (GA) was added to consumer’s hydro bills as a way to help offset the costs of replacing coal generated energy and to fund conservation programs and nuclear power projects. The GA is a surcharge which is calculated by taking the difference between market wholesale prices and the fixed price of energy.
In the future, business owners are looking to these and other government initiatives to lower their electricity costs, and hopefully save them the pain of opening their wallets to astronomical consumption rates.