With the cost of electricity continuing to serve as an albatross around their necks, the Ontario Liberals have unveiled a plan they say will cut hydro bills by 25%.
The province says the Fair Hydro Plan will add to the savings generated by the lifting from hydro bills of the provincial portion of the HST.
"I have heard from people around the province who are worried about the price they are asked to pay for electricity and the impact it has on their household budget," Premier Kathleen Wynne says in a statement released Thursday. "Electricity is a necessity. By fixing problems in the system, we will be able to provide every residential customer in Ontario with an average 25% off their bills now and make rates fairer in the future."
The province also says rate increases over the next four years will be held to the rate of inflation.
While the news of lower hydro bills will be music to the ears of many Ontarians, critics say the Liberal plan doesn't address underlying problems with hydro costs for consumers.
"The cost of electricity has gone up 50% just since Premier Wynne took office, and she has no plan to stop the actual price of power from rising," said NDP leader Andrea Horwath. "She’s spending $40-billion to buy some pre-election political relief for herself and her party – and failing to fix the system. We’re all going to pay for that, one way or another.”
The Liberals claim electricity prices have risen for two reasons: billions of dollars in overdue investment in hydro infrastructure and the move away from the use of coal to produce electricity in favour of green energy. It says too much of the financial burden of these improvements has fallen on today's ratepayers. So, the government says it will extend the financing period of those investments in order to "ensure that system costs are more equitably distributed over time."
The move will mean lower hydro bills in the short term, but considerably more interest costs in the long term.
The government also says it will enhance the Rural or Remote Rate Protection (RRRP) program to provide relief for rural customers that pay higher delivery rates. That, along with the province's new Affordability Fund, credits for First Nations households, and the Ontario Electricity Support Program will cost the government up to $2.5-billion over the next three years.
Ferio Pugliese, executive vice-president of customer care at Hydro One, applauded the changes.
"We look at this from the lens of the customer and we see it as welcome relief to energy rates in the province," said Pugliese.
He notes the RRRP will bring much needed savings to those living in rural Ontario that they have been calling for it for a long time.
"If I look at the average medium density customer for Hydro One which is about 1,000 kilowatts per hour. The savings are in the neighbourhood of 31%, which is roughly about $70 a month on the bill.... a significant decrease," said Pugliese.
Direct feedback from Hydro One customers shows a desire to bring rates for rural and northern customers inline with the provincial average.
The utility has said it took those concerned to the provincial government.
