Energy minister weighs in on provincial hydro bill plan

A plan for fairer hydro bills

To the Expositor:

On March 2, Premier Wynne announced a plan that will lower residential hydro bills by an average of 25 percent starting this summer. This significant reduction in rates will go to every household in Ontario with no asterisks, loop holes or exceptions. And your bill won’t increase beyond inflation for at least four years.

I don’t have to tell you why this is needed. I have heard from people across our province struggling to deal with bills that have gone up too much and too quickly. Household budgets are stretched. Something needed to be done.

What I want to share is how we got to this point, how we’re fundamentally restructuring the system to give you the biggest rate cut in Ontario history, and why you can be certain that this change is going to be lasting.

For a long time, Ontario enjoyed one of the best electricity systems around. But for decades, governments of all stripes stopped investing. About 15 years ago, those quick-fixes caught up with us. Brownouts, blackouts and dirty coal plants were a danger to our health, our environment and our economy.

So, we closed all of Ontario’s coal plants, built new transmission lines and invested in renewable energy. We now have a clean, reliable system that is going to benefit us for decades. But that came at a price. And the terms we set to finance these necessary renovations weren’t fair. 

In effect, we put the $50 billion cost of the rebuild onto the hydro bills of just one generation. That was a mistake. It meant high bills because you were paying for past neglect and subsidizing ratepayers who will benefit from these energy assets for years to come. By stretching those costs out over a timeframe that better reflects the lifespan of the assets we’re paying for, we can lower everyone’s bills today and keep them from jumping back up. That’s the fairer way forward.

We have also been asking ratepayers to pay for things that should really be part of the province’s budget. Our program to help low-income families afford hydro is one example.

But I want to highlight the Rural or Remote Rate Protection Program (RRRP). The RRRP helps subsidize the high cost of delivering electricity to 350,000 rural residential customers. We’re taking the cost of the program off bills and enhancing it so that now about 800,000 homes will qualify for lower delivery charges.

Hydro is a necessity. But for many of us living in the North, high delivery charges were leading to impossible choices between groceries, rent or electricity. That’s not right. With this change, everyone in Ontario is going to be paying roughly the same in delivery charges. Again, it comes down to fairness.

As you can imagine, these huge and lasting structural fixes do come with a cost. We can afford it because of Ontario’s strengthening economy, which is the fastest growing in Canada. After a decade of deficits, the provincial budget will be balanced this year. Our recovery is on track, but it hasn’t been evenly shared. Many families I speak to, whether in Sudbury or Timmins or Sault Ste. Marie tell me they aren’t any better off than they were before the recession. It is why our team is determined to make sure growth in our economy means more opportunity and security for people in our community and all across Ontario. Using the province’s newfound fiscal strength to give everyone the break they need on their hydro bills is the right thing to do for the province and the fair thing to do for your family.

Glenn Thibeault
Minister of Energy