Ontario homeowners and small businesses could be in for a nice surprise this winter: a freeze on electricity rates.

Hydro rates could be frozen for the next six months or even a year because the cost of producing power has fallen, several energy experts predict.

The Ontario Energy Board (OEB) is expected to announce changes in electricity rates next week.

'The first year we got it wrong, and people got a rebate. The second year we got it wrong and the price had to go up for this year.'— Energy Minister Dwight Duncan

Chuck Stradling, of the Building Owners and Managers Association, believes the announcement will very likely involve a freeze of rates.

"Given what the market's doing right now, freezing the price to me would be an obvious alternative for the OEB," he said.

Michael McGee, a consultant with Energy Profiles Limited, thinks the freeze could last for a year.

'Remarkably hard to predict'

The cost of coal and natural gas has fallen, causing a decrease in the price the province pays for hydro.

"The average price of electricity this year has been lower than most people anticipated, certainly lower than the OEB anticipated when we set up the regulated rate plan," Energy Minister Dwight Duncan said.

The decrease in hydro costs would usually cause hydro rates for consumers to fall, McGee said.

But because hydro rates were set too low before, homeowners and small businesses still owe a total of $220 million, leading McGee to believe there will be rate freeze instead of a cut.
 
Duncan refused to comment on what consumers might expect in next week's announcement, but stressed that hydro rates can be "remarkably difficult to predict."

"The first year we got it wrong, and people got a rebate. The second year we got it wrong and the price had to go up for this year," the minister said.