Op-Ed | Ontario Energy Board Hides Real Reason for Rate Increases

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The OEB hides the truth on rate increases

The Ontario Energy Board (OEB) reported their semi-annual bad news via the News Release that always contains depressing announcements about upcoming rate increases.   Couched in words meant to assuage the reader, is this statement: “The price is increasing by approximately $4.42 per month on the ‘Electricity’ line, and about 3.4% on the total bill, for a household that consumes 800 kWh per month.”

The OEB doesn’t issue a press release when your local distribution company increases their rates, part of the “total bill,” so that reference is meaningless.

If you look at the actual price rise from November 1, 2014 to November 1, 2015 the increase is considerably more than 3.4%.   In fact the increase on the charge for the “Electricity” line is 12.8% excluding the HST applied on that increase.   The charge for electricity for the “household that consumes 800 kWh per month” increased by a total of $130.31, not the $53.04 that the OEB infers.   Even using the “average” RPP (regulated price plan) posted on their site and comparing November 1, 2014 to November 1, 2015, you get an increase of 12.5%!

Costs from renewables are one-third of the increase

Looking further that what’s in the OEB News Release, we find that they attribute the increase as follows: “Increased costs from Ontario Power Generation’s (OPG) nuclear and hydro-electric power plants make up about 40% of this increase. Costs from renewable generation sources are another driver, representing about one-third of the increase.” I emphasized the last sentence as it doesn’t reflect certain facts about renewable generation (principally wind and solar), including the need to pay OPG for spilled (unused) hydro power, payments to gas plants to idle (ensuring power is available when the wind dies down or the clouds cover the skies), or directions to complete marginal generation (Mattagami’s project cost was $2.6 billion) which produces power when it’s not needed, in the Spring and Fall periods when Ontario’s demand is low.

Millions lost in one day

You need only look back to October 13, 2015, a windy day when the industrial wind turbines were cranking out unneeded power. The reported 3,450 MW of wind capacity was spitting out an average of 2,200 MW per hour, at a cost for the whole day of $6.5 million. Ontario was busy exporting 2,228 MW every hour that day, being paid 1.8 cents a kWh and at the same time, paying wind developers an average of 12.3 cents per kWh—we lost more than $5.5 million. That’s just one day!

Now if the OEB were really transparent, they would bring these issues to the forefront.   At a minimum, the people who write news releases for the OEB should also be required to take some remedial math courses!

Ontario electricity customers should demand that the Ontario Energy Board, whose mission is to “regulate prices in the public interest,” demonstrate factual reporting and provide consumers with the truth about rate increases.

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About the Author: Parker Gallant is the vice-president of Wind Concerns Ontario.

Feature Image: Gary McGuffin, Prince Wind Farm, Prince Township.

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