Hydro prices: Critics say reported Ontario plan to slash electricity rates by 25 per cent is a 'shell game'

Even before it’s unveiled today, opposition critics rip Wynne hydro bill relief plan as a tax- and debt-raiser

Critics are slamming it as a “shell game” and an act of political desperation.

The ruling Liberals were saying little Wednesday, despite a news report about what’s up their sleeve.

Today, Ontarians will find out how the government plans to cut soaring electricity bills that have basically doubled in a decade, angering many Ontarians and zapping Premier Kathleen Wynne’s popularity.

The Liberals, facing an election in a little more than a year, are reportedly ready to slash electricity bills by another 17 per cent on top of an eight per cent cut made when they removed the provincial share of the HST charged on power bills, Toronto media reported.

The move would be akin to refinancing a mortgage, drawing costs out over a longer time frame, and comes just days after the New Democrats rolled out their plan to cut power rates by 30 per cent.

The Liberals face no bigger political issue than hydro bills, and Wynne had promised that further relief — besides the eight per cent rebate that took effect Jan. 1 — would be announced before the spring budget.

After a cabinet meeting Wednesday, Energy Minister Glenn Thibeault wouldn’t say whether relief would come all at once or in phases, but he and Wynne are expected to make their announcement this morning.

“I would like to see it all done at once to ensure that we can get the best bang for every ratepayer’s dollar,” Thibeault said.

It could take some time to take effect, if regulatory changes or legislation are needed, Thibeault said, but it could perhaps be made retroactive.

Critics were quick to pounce on the Liberals’ move as “too little, too late” from a premier whose approval ratings in the polls have plunged to record lows.

“Will their plan to lower electricity rates just be a shell game where they increase the debt and raise taxes to pay for it?” said Londonarea Progressive Conservative Monte McNaughton.

The Lambton-Kent-Middlesex MPP, McNaughton also called for the Green Energy Act — which plunged Ontario into wind and solar energy — to be scrapped, saying the government has lost all credibility on the energy file.

The Liberals have come under fire from the province’s auditor general on energy, over smart meters with time-of-day pricing that haven’t reduced peak demand for electricity, and for billions of dollars more than market prices that consumers have paid for power.

A 25 per cent hydro rollback is “better than nothing,” but doesn’t solve basic problems, said Gerry Macartney, chief executive of the London Chamber of Commerce.

He said hydro costs are being driven up by long-term contracts that pay high prices to producers of renewable energy.

Many of those contracts were signed with wind energy producers in Southwestern Ontario, home to the province’s largest wind farms and largest number of wind turbines.

“I think they should cancel some of these contracts and not just extend them,” said Macartney.

London West MPP Peggy Sattler said the government isn’t making structural changes to fix hydro rates.

“This is political desperation. They are just moving money around,” the New Democrat said.

With an election looming in June 2018, the Liberal are being battered over soaring hydro costs.

Near Chatham on Wednesday, NDP Leader Andrea Horwath toured a quail farm hammered by high hydro costs and said part of the NDP plan to get hydro costs back under control would be to bring Hydro One, the provincial power distributor, back under complete public ownership to stem the impact that privatization of the electricity system has had on rates.

“We’ve allowed our system to have more and more private profits built in,” Horwath said.

The Liberals are selling a majority ownership stake in Hydro One to raise money for transit and other infrastructure spending.

Deputy Premier Deb Matthews, the London North Centre MPP, declined comment until Thursday ’s announcement. “We will bring forward a plan that will have immediate relief for Ontarians in the near future, and we look forward to that announcement,” her office said in a statement.

Progressive Conservative Leader Patrick Brown said the reported plan would just shift costs from people’s hydro bills to tax bills.

“The money needs to come from somewhere,” he said. “Will this government come clean and acknowledge that in their leaked plan, taxes are going to go up? They’re simply playing a shell game.”

Energy consultant Tom Adams said in a blog post that the government’s plan would create a “big new electricity debt” to make rates “appear” to decrease.

It’s unclear whether underlying contracts would be extended or if Ontario Electricity Financial Corp., which manages the debt of the former Ontario Hydro, would fund the difference, Adams wrote.

The global adjustment, which accounts for as much as 70 per cent of electricity rates, is the charge consumers pay for above-market rates paid to power producers in 20-year contracts meant to ensure a steady supply.

Auditor general Bonnie Lysyk has estimated the global adjustment cost $50 billion between 2006 and 2015 and increased by 1,200 per cent between 2006 and 2013 — meanwhile, the average electricity market price dropped by 46 per cent.