Letter on Ontario’s Fair Hydro Plan
Earlier this morning Premier Wynne and Minister Thibeault announced Ontario’s Fair Hydro Plan.
For the past several months, the Premier and Minister have made it clear that creating a fairer electricity system for Ontarians is a priority. Ontario is lowering electricity bills by 25 per cent for the average residential customer as part of a significant system restructuring that will address long-standing policy challenges and ensure greater fairness.
Starting this summer, Ontario’s Fair Hydro Plan would provide households, as well as small businesses and farms, with this 25 per cent break. People with low incomes, First Nations living on-reserve, and those in eligible rural communities would benefit from even greater reductions to their electricity bills. As part of this initiative, rate increases over the next four years would be held to the rate of inflation.
We are proposing these restructuring changes to the Global Adjustment (GA) due to the major investments that Ontario has made in the electricity system since 2003. Following decades of under-investment in the electricity system by governments of all stripes, it was essential to make significant investments in generation, transmission and distribution assets. We also made the important decision to eliminate Ontario’s use of coal and build clean, renewable supply. Between 2005 and 2015, Ontario invested more than $50 billion in the electricity system, including $35 billion in electricity generation to ensure the system is clean and reliable. The costs of these investments are funded in part through the GA.
Moreover, all Ontario ratepayers will benefit from a decrease in their monthly regulatory charges since we intend to fund the costs of the enhanced electricity support programs through provincial revenues.
Additionally, we are proposing additional long-term measures to lower energy costs for ratepayers by working with the province’s agencies to identify opportunities to drive efficiency and productivity improvements. More specifically, this involves working with the Ontario Energy Board to identify opportunities for cost efficiencies with Local Distribution Companies and with the Independent Electricity System Operator to seek improvements to the performance of Ontario’s wholesale electricity market.
Attached is a copy of the News Release and Backgrounders with more information on the proposed measures.
Of most interest to you, would be the removal of social programs from the rate base for all of your members as well as the 25 per cent reduction for eligible small businesses.
Finally, the Ministry of Energy is continuing our work on the development of the 2017 Long Term Energy Plan (LTEP) to be released this spring. The LTEP process is designed to be iterative and flexible and only commit resources as demand needs become clearer.
Please let me know if you have any questions or would like to have a call to discuss today, I look forward to chatting further on this.
Backgrounder – Energy Sector Efficiencies
Backgrounder – Refinancing the Global Adjustment
Backgrounder – Enhancing Electricity Support and Conservation Programs
Backgrounder – Previous Actions to Reduce Energy Costs
News Release – Fair Hydro Plan
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