Ontario Energy Board: strange math behind time-of-use pricing
Magic tricks: how the OEB explains electricity bill increases
The Ontario Energy Board’s (OEB) news release of October 16, 2014 tells us that our rates will once again increase on November 1, 2014, but only by 1.7% on the total bill. In their Backgrounder, the OEB tells us that “Electricity prices make up about half the total of an average household bill.”
If they are telling us they have increased “electricity prices” they should be explaining how much rates are going up in dollars and percentages, and not relate it to the total bill—but maybe that’s a way to lessen the visual impact. If they were truthful they would annualize the increase. If they had done that, the story would then be that the electricity portion of our bills has increased 13.2%, measured from the prices applicable on October 31, 2013.
The On-peak rate as of October 31, 2013 was 12.4 cents/kWh and effective November 1, 2014 will be 14 cents/kWh. That’s an increase of 12.9%. Mid-peak rates one year ago were 10.4 cents/kWh and on November 1, 2014 will be 11.4 cents/kWh, an increase of 9.6%. Off-peak rates will jump to 7.7 cents/kWh from 6.7 cents/kWh, an increase of 22.3%.
Taken together, those increases in the price we pay for electricity increased 13.2 %, or $8.87 a month, and $106.44 for a full year.
OEB not coming clean
The OEB has also never come clean about the requirement to no longer include “line losses” on the electricity line of ratepayers’ bills. That should have driven time-of-use/TOU pricing down by 5.2%, but didn’t! Those line losses, effective August 2013 should have reduced electricity costs and increased the delivery line on ratepayers’ bills by an equivalent amount, yet were “forgotten” in the explanations offered by the OEB. The 5.2% line loss reallocation would represent 33.3 kWh on an average (800 kWh) monthly ratepayer bill. In dollar terms, that’s a $3.95-per-month decrease or $47.40 annually—but it didn’t. Taken together, the hidden line loss increase, coupled with the approved OEB increase, raised average electricity prices by $12.82 monthly or $153.84 annually.
In just one year, the 4.6 million residential ratepayers in Ontario will have had another $707.7 million removed from their disposable income just to cover the cost of electricity. That’s way over the rate of inflation. Added to that will be the dollars extracted for rate increases for distribution and regulatory charges for the other “half the total of an average household bill.”
Energy poverty in Ontario
For stay-at-home parents, seniors living on fixed incomes, or the disabled, the increases will affect their ability to simply put food on their tables!
Time for the OEB to come clean with ratepayers and issue “transparent” news, rather than abuse the ratepayers by hiding the true costs of the “greening” of Ontario with wind and solar intermittent generation.
October 19, 2014
The opinions expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.