More jolts on way
Energy Minister Brad Duguid: “The cost of electricity is going up and it will be for some time to come”
One-on-one with Ontario Energy Minister Brad Duguid
By RANDY RICHMOND, The London Free Press
July 30th, 2010
Brace yourself, Ontario.
Hikes to monthly electricity bills have just begun, Ontario Energy Minister Brad Duguid warns.
As anger rises in London and across the province over the double whammy of higher power prices and the HST, Duguid — the McGuinty government’s point man on electricity — answered questions about the Liberals’ decisions in an exclusive Free Press interview.
Questions and answers:
Q In London, power bills are 17% higher than they were in May. Two reasons, the hydro rate increase and the HST. There’s a lot of anger over it and people want to know how you’re justifying this?
The cost of electricity is going up and it will be for some time to come because we’ve had to make necessary investments to ensure we have a stable supply of energy across the province. Seven years ago, we didn’t have enough supply to meet the demand. We were at great risk of blackouts. As a result, we’ve had to make some extensive investments in generation.
At the same time, we’ve also moved away from dirty sources of power, such as coal, to cleaner sources of energy. There are costs to that.
Q There seems to be anger about green power. It seems people would rather choose lower rates for, as you call it, dirty power than clean power and higher rates.
I think the reality is, if we would have kept to the same course as the previous government we would today be at great risk of not having enough power to run our economy or run our homes. That is why we have had to make some very extensive investments in generation.
Q Where are the extensive investments?
We are in the process of retrofitting our nuclear fleet, and we are in the process of building new gas plants. Many of them are up and running now and that’s what’s starting to come on the bills. We are in the process of actioning the Green Energy Act which is bringing in new sources of energy.
Q Can you understand people’s anger, especially with this (power rate hike) coming back-to-back with the HST?
We certainly do and we are doing everything we can as a government to mitigate the increases . . . through ensuring our agencies are performing responsibly, that their requests for increases through the Ontario Energy Board are for all the right reasons.
Q Was there talk that perhaps the increase shouldn’t take place within the same two months as the HST? Or was it something that was overlooked?
In the past, previous governments . . . haven’t had the courage to be honest with Ontarians about the true cost of energy. They have, at times, frozen energy rates at the expense of creating new generation and investing in our energy infrastructure. The cost of that is, we’ve had to play catch-up for seven years.
Q But what about the double whammy of the HST coming on hydro bills?
The HST is offset by tax cuts that have been extensive. The most significant tax cuts in the history of the province have taken place this year to both businesses and people.
Q People are already conserving energy. They’ve been hearing the message for years and, yet, the bills keep going up. Now, they’re beginning to wonder, will they be able to conserve enough to maintain the current prices they pay for electricity?
Our efforts to encourage conservation have resulted in about 1,700 megawatts being saved. We still believe we have a long way to go (toward) changing our culture, (toward) creating a culture of conservation in our province.
Q But it doesn’t seem possible we can mitigate all the increases through conservation.
I think one of the things we are really keen on doing is being straight up and honest with Ontarians. Our conservation efforts will, in all likelihood, not offset those costs entirely but they give families the opportunity to mitigate some of those costs.
Q What sorts of things are you hoping to have in place, and when, to help low-income residents?
We are working on a low-income strategy right now. The Ontario Energy Board is doing some work to provide us with some recommendations. But on top of that in the recent budget we came forward with a property and energy tax credit to provide substantial savings for low-income Ontarians when it comes to energy.
Q When will the low-income strategy be in place?
I don’t have an exact timetable, but my expectation is we should have that sometime in the coming year.
Q If it happens after this winter, there are going to be a lot of people — seniors on fixed income and social assistance — who rely on electrical heat. It’s going to be a tough winter for some of these people.
The energy tax credit is something that will benefit those vulnerable seniors and those in low-income categories. However, we recognize there are other things we need to do to assist the vulnerable, not only in recovering from their energy costs but in how energy policies are administered.
Q Are you hearing concerns (about the rate hikes) all across Ontario?
I think we are very sensitive to, and understand, the challenges to families of increasing energy rates. That challenge would be that much greater to families if they didn’t have energy at all available. We’ve had to make these investments. They’re tough decisions, but over the long haul they will be decisions our generation will be proud to have been able to make.
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Breakdown of London Hydro’s 17% rate hike:
7.4%: Increase in price of electricity
2%: Increase in charge to distribute it.
7.6%: Application of new HST to the bill.