Ontario hydro bills to increase in 2016, experts say

Ontario home owners will no longer pay down Ontario Hydro's old debt, but they also won't receive a 10 per cent clean energy rebate either as of Jan. 1, 2016.

'These are the good old days,' energy commentator says of hydro bills in Ontario

While the clean energy benefit and debt retirement charge disappear with 2015, the new Ontario Electricity Support Program for low-income users takes effect Jan. 1, 2016 and the province is phasing in a fully fixed rate for electricity distribution. (file photo)

Residential electricity users in Ontario are set to pay more for power in 2016 due to changes that take effect with the flipping of the calendar, according to one energy consultant.

"You can take a look at your electricity bill today," said Tom Adams as 2015 draws to a close, "and these are the good old days."

He estimated bills will go up from to six to seven per cent for power consumed starting Jan. 1. That would be on the heels of time-of-use rate hikes that took place Nov. 1, and ahead of more rate hikes planned for May 1, 2016.

The energy minister has said he's focused on slowing the rate at which the cost of electricity is increasing. A statement from Bob Chiarelli's office insisted bills are increasing more slowly than in neighbouring jurisdictions.

End of debt charge, clean energy rebate

After Dec. 31, 2015, the debt retirement charge comes off residential electricity bills, although other users such as those in business and industry will continue to pay down the debt incurred by the former Ontario Hydro through at least 2018.

On the same day, the province's clean energy benefit expires. It was introduced in 2011 and has meant a 10-per-cent rebate on electricity bills.

The two changes do not offset one another, so people will end up paying more for electricity consumed in 2016, said Adams, who estimated the clean energy rebate has typically been double to triple the charge homes paid against the Ontario Hydro debt.

To help those with a low income deal with the loss of that 10-per-cent rebate, the province will begin the Ontario Electricity Support Program starting Jan. 1.

As of late December, people who could be eligible had been slow to apply to that program.

Seven weeks in, the Ontario Energy Board said 19 per cent of the 500,000 users it targeted had applied, which Brian Hewson, its senior manager of strategic policy, called "an excellent response to a program that has been open for such a short period of time."

All electricity rate payers are being charged $0.0011 per kilowatt-hour to pay for the new credits for those on low incomes.

Province phasing in fixed distribution rates

The hydro bill becomes further complicated, Adams said, as Ontario moves toward a system where every home pays the same, fixed distribution rate.

Starting Jan. 1, the amount of electricity a household consumes will count less and less toward what it's charged for using the grid.

"The network of poles and wires that are used in your community really don't vary much in cost depending on how much you use them," said Hewson of the Ontario Energy Board.

As more Ontarians install solar panels and other technologies, for instance, Hewson said their use of the grid shouldn't be subsidized by others, who currently pay more for distribution because they use more.

Adams argued that change means a single-bedroom condo that uses very little energy will end up seeing an increase on their bills and a large, single home with many residents will see a decrease.

But large users of electricity will still pay more overall, said Hewson, who said it makes more sense for consumers to focus on the time-of-use line on their electricity bill because that's where they can consider how they can conserve power.

The energy minister's office said that a fixed charge will help companies "recover distribution costs" and "remove the disincentive utilities have to encourage customers to conserve."

For the one in five electricity users that will see their bills go up because of a move to fixed rates, Chiarelli's office said it will be limited to a hike of 4 per cent per year.

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