rabble has published a number of columns on the causes of high hydro rates. The problem of high hydro rates just got much worse.
In the 2018 election Ontario Premier Doug Ford promised to lower hydro rates by 12 per cent. Since then, electricity rates have steadily risen. What Ford did do was hide the problem.
According to the Financial Accountability Office, Ford has been spending up to almost $7 billion a year in Hydro subsidies artificially lowering, artificially high hydro rates. Subsidies hide and protect former Conservative Premier Mike Harris’s deregulated electricity market scheme.
On November 1 the Ontario Energy Board dramatically raised hydro rates. Averaging out, off peak, mid peak, and on peak rate increases totaled 28.947 or a 29 per cent increase. An astonishing increase, in the middle of an affordability crisis and a crisis in healthcare and education, caused by Ford’s underfunding.
Ford has now also engaged in a coverup of his obscene hydro rate increase. Ford is spending billions more to avoid public outcry.
On November 1 Ford also raised his Ontario Electricity Rebate from 13.1 per cent to 23.5 per cent, hiding the increase. This electricity rate subsidy is paid for by taxpayers out of the public treasury. Money that is clearly needed for healthcare and education and the climate crisis.
Some history is required. Like the con man who goes from town to town working their scam, In the 1990’s Enron was wandering the world selling their invention: The deregulated electricity market.
According to Maclean’s magazine in July of 1995, Harris went fishing in the Northwest territories with Kenneth Lay, chairman of Enron. Enron and Ken Lay went on to be convicted of one of the biggest corporate frauds in history.
They claimed Ontario Hydro was bankrupt because of a $34 billion debt, a debt that was almost entirely nuclear debt, showing right up to today how expensive nuclear power is.
Harris then spent millions on a province wide ad campaign promising “lower rates” from his hydro deregulation legislation, as well as promising that “nothing will go wrong.”
Harris rammed through three pieces of legislation in 1998. Bill 35 The Energy Competition Act, The Electricity Act and The Ontario Energy Board Act. Harris then had Aleck Dadson of Enron and a who’s who of private investors design Ontario’s electricity market. Making the current rate problem worse, Harris’s legislation changed all non-profit at -cost hydro commissions into for-profit corporations. Harris’s promises of lower rates and nothing will go wrong was short lived.
After the Enron designed electricity market opened in June of 2002, by 2007 rates doubled, by 2010 rates had tripled and by 2018 rates had quadrupled.
Bringing us to Ford’s election and the introduction of Ford’s Ontario Electricity Rebate hiding the problem.
Conservative Alberta is doing the exact same hiding of their Enron designed electricity market with subsidies.
Electricity markets are notoriously easy to manipulate as shown by the catastrophic failure in California, which caused massive outages in the late 1990s, as well as a failure in Montana, Australia, New Zealand, Europe, and a major scandal in India.
At the time Harris was bringing in his deregulated market legislation, critics asked: How do you have a market for something you can’t store or stockpile? On the promise of “lower rates.” How do you get lower rates when you are adding in profits to generation and to transmission? Profits to distributors, dividends to investors and commissions to commodities brokers?
Electricity is very much like water, a necessity of life. You don’t turn a necessity into a for profit commodity.
In October of 2020 Ford offered ratepayers a “choice.” Ratepayers could choose “time of use” payment or they could choose “tiered” payments so much for the first 1000 KWH and then so much for the next tier. Doing the math shows it is just a wash which works out to be just about exactly the same cost.
Ford’s current plan is for a lot more for- profit nuclear and gas plants which will sell into the Enron designed electricity market committing us to ever spiking electricity rates and making the climate crisis worse as well as higher and higher taxpayer paid subsidies.
Ford guarantees the profits and taxpayers get the bill. Where is the opposition to this rate crisis and Ford’s billions of dollars in coverup? Billions needed for healthcare and education, not to line corporate pockets.
For far too long, high deregulated-market power rates have been hidden. The phony Enron electricity market, the independent electricity system operator must finally be closed. Rates must be regulated and like Europe and Australia we must get on the pathway of public green power and conservation.
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