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ONTARIO DEREGULATION UPDATE
Government Plans to Lower Bills and Increase Conservation
By Tania Henvey
The Electricity Pricing, Conservation and Supply Act, 2002 was introduced in late November by the Ontario government, in an effort to lower hydro bills in the province.
"We are proposing a series of initiatives to protect families, small businesses and farmers from the high price of electricity," said Energy Minister, John Baird. "I am encouraging all members of the Legislature to pass this Bill quickly so consumers can start getting relief."
In addition, Baird wants to have another part of electricity bills changed.
"As part of our Action Plan to lower your hydro bill, our government will continue to pressure the federal government to remove the GST from electricity bills, including the Debt Retirement Charge," said Baird. "Electricity is a necessity of life, just like groceries, and should not be subject to provincial or federal taxes."
The Act, if passed, will include:
- Lowering and freezing the price of electricity at 4.3 cents per kilowatt-hour.
- Providing refunds of the difference between what customers paid since May and what they would have paid had the rates been fixed.
- Capping current delivery levels.
- Until March 31, 2002, no one will have power cut off because of a failure to pay their hydro bill.
- Local hydro companies will become non-profit groups, unless municipal councils decide to operate for-profit.
- Tax incentives and holidays to promote conservation, encourage alternative fuels and support clean energy production.
The Ontario Energy Association (OEA), which represents major participants in the converging natural gas and electricity industries in Ontario, reviewed the new Legislation, but does not completely agree with it.
"This legislation is complex in its application to the Ontario electricity market and regulation, and has implications for energy markets generally," said Peter Budd, Chair of the OEA. "Implementation details have to be worked out by the government co-operatively with generators, utilities, retailers and other stakeholders. The legislation appears to address some of our concerns, and we are optimistic that further progress will be reflected in the regulations as they are developed."
Bernard Jones, President and CEO of OEA noted that the association had recently made recommendations to the government, noting ways to preserve the wholesale market, encourage conservation and stimulate new generation.
"We are expecting that larger energy users will continue to have access to the wholesale power market," said Jones. "This is a basic requirement if the private sector is to build new generation. Those large power users who are able to do so may exercise control over their cost of power by reducing demand in higher-priced peak periods and increasing it in lower-priced off peak periods."
The Ontario government is looking for ways to promote energy conservation, encourage alternative fuels and support clean energy production. Currently, it is creating a plan to encourage these ideas. Included in the proposal, the government wants to: conserve energy by cutting its own usage by 10 per cent; purchase green power for 20 per cent of all the government's electricity usage; every newly constructed government and institutional building will be self-sufficient using alternative energy; large consumers will be offered cost savings through initiatives such as retrofitting commercial buildings with more energy efficient technology; a tax credit will be given for consumers using solar panels (with a goal of 100,000 homes converted to solar power by 2007); and using wind power for electricity in remote communities, instead of diesel.
In late November, the Ontario government opened the province's first commercial wind farm, Huron Wind, a partnership between Ontario Power Generation and British Energy Canada. The facility is nine MW, with five turbines located next to the Bruce nuclear reactor on the shores of Lake Huron.
There are also two wind turbines to be built on Toronto's waterfront in an effort to produce an alternative form of electricity. ET
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