Chiarelli promises to save us even more money!

The TEDDY award ceremony in Ottawa this week: Ontario wins!
The TEDDY award ceremony in Ottawa this week: Ontario wins!

Minister of Energy Bob Chiarelli was fast off the mark when the Canadian Taxpayers Federation (CFA) awarded his Ministry with a “Teddy” award granted for the “money-wasting boondoggle” the CFA attributed to smart meters.  The Minister disputed the award by claiming “the devices are lowering electricity bills for consumers in part by allowing them to switch their electricity use to off-peak times when it costs less.”
The Auditor General, Bonnie Lysyk was also a critic of smart meters when she released her report in December 2015, and specifically suggested how the rate differential between on- and off-peak rates wasn’t incentive enough for people to change their electricity usage.  Minister Chiarelli also refuted the findings in her report in respect to the wasted cost.  Minister Chiarelli apparently has now got the issue firmly in hand.
He was quoted in a recent Toronto Sun article: “We did have a higher price for peakNB: when we first introduced [time-of-use pricing] and there were a lot of consumer complaints about that,” Chiarelli said. “In response to consumers, we reduced the peak price and there was less of a differential and that created less of an opportunity to save more money on your electricity rates. We’re reviewing that decision at the present time.”
It is the last quote ratepayers should be concerned about!  The Ontario Energy Board indicates off-peak rates have increased 120% since introduced in 2006,  going from 3.5 cents per kilowatt hour (kWh) to the current rate of 7.7 cents/kWh.
On-peak rates have increased from 10.5 cents/kWh to 14 cents/kWh, an increase of only 33%.  The price differential has therefore compacted to an on-peak, off-peak ratio of 1.8:1.   Based on the need to satisfy the contracted parties (wind, solar and biomass) under the feed-in tariff contracts, means a continuing increase in the ratepayer dollars needed to satisfy those contracts.
The conclusion and the “decision” that will come from the Ministry’s review of the TOU pricing may well mean that the initial ratio of 3:1 will become the objective.  If that happens the on-peak rate will jump from its current 14 cents/kWh to 23 cents/kWh, raising average annual energy bills by about $300.001; annually.
Just another way for the Energy Minister to increase energy poverty for those with disabilities or seniors living on fixed incomes while telling us “the devices are lowering electricity bills for consumers.”
©Parker Gallant,
March 6, 2015
NB: TOU rates introduced in May 2006 set off-peak rates at 3.5 cents/kWh and on-peak rates at 10.5 for a 3:1 price differential.  Today they are 7.7 cents/kWh for off-peak and 14 cents/kWh for on-peak.
1. Ratepayers currently consume an average of 33% of their electricity during on-peak times which translates to consumption of 3,100 kWh annually which, at an increase of 9 cents a kWh, would raise ratepayers’ bills by about $300.
The views expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.

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