How your hydro bill will rise over the next decade
Leaked cabinet document suggests steepest rise in electricity prices will come in the 2020s
A leaked cabinet document reveals hydro bills in Ontario are projected to stay below last year's record high until 2024, but then climb steadily and surpass $200 a month on average in 2028.
Six pages marked "Confidential Cabinet Document" were obtained by the Progressive Conservatives and provided to the media on Thursday. They give details of a policy option that would "meet a targeted 25 per cent reduction" off hydro bills.
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The document shows projections for the average monthly hydro bill (tax included) that drop from $158 last year to $123 this year.
The bigger jumps in prices start in 2022, when the government's promise to keep rate increases below inflation expires. Bills are forecast to rise from $133/month in 2021 to $215/month in 2028, an increase of 61 per cent in seven years.
"This shows that the price of electricity is going to skyrocket after the next election," PC energy critic Todd Smith told reporters Thursday after releasing the documents. "The government isn't being sincere about dealing with the problem. They're trying to save Kathleen Wynne's bacon."
In a news conference Thursday, Energy Minister Glenn Thibeault questioned the accuracy of one the numbers — suggesting a 10.25 per cent jump in the price from 2027 to 2028 — but stopped short of denying the overall projection.
"I've said this from the beginning. This plan, the Fair Hydro Plan, will cost more and it will take us longer to pay off," said Thibeault. "What we do have today is a 25 per cent reduction on average that will be coming forward for families."
The Liberals say their plan will cut residential and small business hydro rates by 25 per cent this summer, but that is measured from last year's peak and includes the eight per cent reduction that took effect Jan. 1 when the government began a rebate of the provincial portion of the HST from electricity.
After months of anger from hydro customers, with the price of electricity consistently rated the top issue among voters, the Liberals revealed their hydro plan in early March.
At the time, Wynne promised to keep increases below inflation until 2021, but acknowledged they would eventually rise. "Over time, it will cost a bit more. That's true," she said. "And it will take longer to pay off. That's also true. But it is fairer, because it doesn't ask this generation of hydro customers alone to pay the freight for everyone before and after."
The projection forecasts the rate increases will flatten out in the 2030s and 2040s and predicts bills will fall in 2048, once the 30-year refinancing of the new hydro plan ends.
- 2033: $223/month
- 2038: $223/month
- 2043: $228/month
- 2048: $210/month
The Liberal government introduced its legislation Thursday to support its hydro plan, including holding rate increases to inflation for the next four years.
Ontarians' hydro bills will be lower than previously expected for the next decade, but then costs will be higher for the following 20 years.
Time-of-use rates are being lowered by removing from bills a portion of the global adjustment, a charge consumers pay for above-market rates to power producers.
A new entity overseen by Ontario Power Generation will pay that difference for the next 10 years, and take on debt to do so.
Then, the cost of paying back that debt — which the government says will be up to $28 billion — will go back onto ratepayers' bills for the following 20 years as a "Clean Energy Adjustment."
with files from The Canadian Press