Doug Denley;
Instead of talking about a trivial increase of a couple of dollars, Ontarians should be paying attention to the $4.7 billion the provincial government is borrowing this year to keep power bills artificially low. Ontarians are getting a rebate of 33 per cent off their real power costs. Pretending that power rates are far lower than they really are is a trifecta of political stupidity that the Liberals started, the PCs continued, and the NDP promises to make worse.
Ford defended the increase this week by saying that’s it’s rising at the rate of inflation. It is, but the increase has little to do with inflation. Instead, as the OEB pointed out, prices are going up because of declining demand.
But wait, wouldn’t decreasing demand in a market that already has a large supply surplus tend to lower prices, not increase them? Unfortunately, not in Ontario.
During the 15-year Liberal reign, the supply of wind, solar and natural gas generation increased to well beyond what the province required. For example, gas-fired generation makes up 25 per cent of provincial capacity but produces only six per cent of power output. In a free market, that kind of surplus would have driven prices down and pushed inefficient competitors out, but the Liberals had a solution for that. They guaranteed to pay for that new power, even if it was not needed or generated.
That’s the root cause of this week’s power increase. Guaranteed contracts have left Ontario with huge fixed power costs. As the volume of power used declined steadily for more than a decade, fixed costs rose to 18 times what they were back in 2008. Just over one-quarter of fixed costs now are attributed to wind and solar power.
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