Skyrocketing electricity prices became the No. 1 issue facing Premier Kathleen Wynne this year as hundreds of Ontario residents were forced to make a difficult decision between paying to keep the lights on and putting food on the table or paying the rent.
An ongoing investigation by Global News examined the province’s mounting hydro crisis and how it’s squeezing the already overstretched pocketbooks of residents and businesses.
Mounting public pressure over rising electricity prices has led to an about-face for the Liberal government and Energy Minister Glenn Thibeault, who had previously downplayed the hydro crisis. In September, the provincial government announced it will spend $1 billion annually to give electricity ratepayers an eight-per-cent tax cut on their hydro bills starting Jan. 1, 2017 and is expected to save the average family roughly $130.
“I believe that all of the changes — everything from policy to the actual reduction we are anticipating — has come as a direct result of the stories that have been told, the media attention to this and Global’s effort to tell the stories over and over again of the on-the-ground impact of the decisions that have been made in the energy sector,” said Francesca Dobbyn, executive director of the United Way of Bruce Grey in Owen Sound, Ont, who has helped those struggling to make ends meet.
Since Global’s first story in June revealed the growing number of households being disconnected for failing to pay their bills, dozens of Ontarians have come forward with stories about being left in the dark by utility providers.
“It’s been amazing … being able to tell these stories and understand that this isn’t a poverty-related story,” said Dobbyn. “This has affected everybody. We have heard from business after business that has shut down because they can’t manage their hydro bills.”Ontario residents left in the dark
More than a dozen stories have been published looking at the disconnection practices by utility providers in the province and the issue of high electricity prices that have left some families in increasingly desperate situations.
When first approached about disconnection rates and the number of customers who are behind on their bills, neither the Energy Ministry, the Ontario Energy Board (OEB) — the arms-length regulator responsible for setting electricity prices in the province — or Hydro One were willing to provide the information.
After repeated requests, Global News was finally able to report that more than 60,000 people in the province were disconnected last year after falling behind on their bills. That revelation prompted many people to come forward with stories about having their power cut off. The latest data from the OEB shows Ontarians fell behind on their energy bills to the tune of $172.5 million in 2015. That’s a significant increase from the roughly $108 million owed in 2013.
John Vanthof, NDP MPP for Timiskaming-Cochrane, said the crisis of hydro affordability has affected rural communities for years and now urban areas are starting to become more affected by the price of electricity.
“We are dealing with so many cases where people are being shut off because they just can’t pay their bills,” said Vanthof. “These are hardworking people or retired people and they just can’t cope with the hydro bill.”
All of the stories from residents and businesses share a common theme: while consumption levels haven’t changed, the bills keep going up.
A family from Kingston, Ont., was disconnected by Hydro One in mid-June after falling more than $10,000 behind in payments. They said that while their usage did not change since they moved to the area 20 years earlier, their bills have increased 20 times what they used to pay.
“It’s just gone up and up and up,” said the mother of a family of six who asked to remain anonymous. “Try explaining to your children why you can’t get water from [the] tap. Try explaining to your children why mommy is out in a blizzard trying to cook dinner on the BBQ. Try explaining that they’re not to be embarrassed that they live in a house with no power.”
Following the reporting of stories like the Kingston family, Hydro One announced earlier this month that it’s planning to reconnect more than 1,400 customers living without electricity just in time for the holidays.
Hydro One’s executive vice-president of customer care, Ferio Pugliese, said the company is reaching out to customers without power to arrange reconnection for the remainder of the winter and to set up payment plans customers can “afford.”
“This program is about doing the right thing for our customers,” Pugliese said. “We are changing the way we do business and by doing so we are reviewing all of our customer-facing policies and practices, including how we care for our most vulnerable customers.”
Andrea Horwath questions Kathleen Wynne over Global News hydro bill story
01:53 Andrea Horwath questions Kathleen Wynne over Global News hydro bill story
23:07 Spotlight on Hydro
02:29 Ontario hydro providers and their disconnection policies
02:41 Over 1200 Ontario hydro customers have defaulted on payments this year
01:22 Hydro One to review 1,400 disconnected cases
02:22 Hydro One announces moratorium on disconnecting delinquent customers
01:56 Kingston, Ont. couple’s hydro restored after anonymous donor covers bill
03:07 High Hydro costs ruining the lives of Ontario families
00:27 Woman living northeast of Toronto reacts after having hydro cut off since this past June
05:45 “It ruined me:” High hydro rates force elderly Ontario couple to move
There are several factors behind Ontario’s high electricity costs. One reason is the fact the province produces more power than its citizens consume, forcing the sale of excess power at a loss.
Expensive green energy contracts, paying off the rest of what the former Ontario Hydro still owes, and delivery charges for distribution and transmission of electricity, all contribute to higher bills.
In a 2015 report, Ontario’s auditor general found hydro bills for homes and small businesses rose 70 per cent between 2006 and 2014. That cost consumers $37 billion and it was mainly due to the Global Adjustment fee. The fee is levied on consumers and businesses to cover the gap between what energy producers are guaranteed and the actual market price for electricity.
For instance, solar producers, many of which signed contracts with the government for as long as 20 or 30 years, were paid as much as 80 cents per kilowatt hour for the energy they produced, despite the fact that fair market value for this energy was 2.36 cents per kilowatt hour. The 78-cent difference was passed on to consumers in the Global Adjustment fee. So too are rebates for things like LED bulbs.
The audit also found consumers will have to pay $9.2 billion more for renewable energy projects over the 20-year contract terms under the government’s guaranteed-price renewable program for wind, solar and biomass than under the previous program.
Opposition parties say electricity rates were driven up much higher than necessary by the Liberals’ overly generous, long-term contracts for wind and solar power.
The Liberals have defended the rate increases because Ontario stopped burning coal to generate electricity and invested heavily in transmission grid upgrades after years of neglect.
“The government is listening, but I also think the government doesn’t have any clue what to do and how to reduce the costs,” said Dobbyn. “There is no silver bullet, there are ways of increasing their household revenues which would then enable them to pay the bills, but how do you lower the bills when the costs are fairly fixed in the system?”
Hydro rates have been an ongoing headache for Wynne, who has seen her numbers in the polls plummet in recent months as the Liberals prepare for a provincial election in 2018.
Wynne told Global News she has called it “unacceptable” that Ontarians are being forced to choose between paying for electricity and the basic necessities.
“I’ve taken responsibility for that,” she said. “I’ve said that there’s more we need to do and that’s what the minister and I will be looking for, is how can we take more costs out of the system.”
“I’ve said that I take responsibility for not understanding fully and early enough that this was such a burden on people.”
In a year-end interview, Wynne said her government has been working to “take costs off people’s electricity bills” by removing the debt retirement charge, putting in place the Ontario Energy Support Program (OESP) for low-income families and removing the provincial portion of the HST — which amounts to an eight per cent reduction on electricity bills. An additional 12 per cent will be offered to hydro consumers in rural and northern communities.
— With files from Brian Hill, Adam Miller, and Alan Carter.