Ontario auditor examines Liberal plan to cut hydro bills
Spending watchdog probes what the Wynne government describes as paying off mortgage more slowly
Premier Kathleen Wynne's move to reduce hydro bills in Ontario with an election looming goes under the auditor general's microscope today.
What the Ontario Liberal government calls its "Fair Hydro Plan" has brought down the average household electricity bill by 25 per cent from the peak it hit in the summer of 2016. The Wynne government has committed to keep rate increases below inflation for the next four years, but admits bills will rise significantly in the decade that follows.
- Wynne slashes hydro rates, but Ontarians will pay for it later
- How your hydro bill will rise over the next decade
Auditor General Bonnie Lysyk will reveal the results of her investigation Tuesday into how the rate cuts are financed, and whether the plan is fair for taxpayers and hydro customers.
The government is financing the lower hydro bills by borrowing an extra $26 billion through Ontario Power Generation. Electricity customers will pay off that debt over the next 30 years.
"This is like remortgaging our house," Energy Minister Glenn Thibeault told reporters Monday at Queen's Park. "I've always said that the Fair Hydro Plan was a fair plan; it was the best plan we could come up with when we were talking with energy experts, accounting experts, the legal experts."
The auditor has already expressed concerns that the government is not showing that $26 billion in debt on its books. making the province's bottom line look healthier than it really is.
"It is the government needing to borrow money to cover the difference between what they're collecting from ratepayers and what they're paying to the power producers," Lysyk told a legislative committee in May. She said it's "contrary to public sector accounting standards" to move the debt off the province's books and onto OPG's.
The opposition parties are focused on the short-term nature of the Liberals' hydro rate relief.
"They've done nothing to actually reduce the actual cost of electricity," said PC energy critic Todd Smith in an interview Monday. "All they're doing is implementing a stop-gap measure that's going to cost us billions more in return, and a return to record high electricity prices after we get past the next election."
"The relief is absolutely temporary," NDP leader Andrea Horwath told reporters. "In very short order the bills are going to start going back up again because what the government did was bought some short-term pain relief for longer term pain for the people of Ontario."
Ontario's auditor general has frequently examined the costs of the hydro system. Two years ago, Lysyk concluded customers have spent $37 billlion more on electricity over the past eight years than the market rate. Previous special reports by the auditor probed the true costs of cancelling the Mississauga and Oakville gas power plants.
Another independent watchdog, Ontario's financial accountability officer, crunched the numbers in May on the Fair Hydro Plan and projected the net cost to taxpayers will be $21 billion.