Several local utilities in Ontario raised electricity prices on January 1, posing a new challenge to Ford's already-promised pledge to cut prices by 12 percent.
Approved by the provincial regulator, Toronto Hydro raised its prices by 5.4 percent, mainly to cover a $ 2 billion capital program for the restoration of aging infrastructure. A number of other local distribution companies, mainly owned by the municipality, increased their rates by less than 2 per cent to cover their higher distribution costs and a slight increase in the cost of transmission from Hydro One Ltd.
However, even a slight rise in price contradicts the promise of Doug Ford's prime minister, made during an election campaign last spring, and repeated after he came to office – to cut electricity bills by 12 percent. Such a reduction in prices would be additional to the short-term savings caused by the former liberal government in 2017, when they lowered rates by an average of 25 percent, increasing the payments for the new generation and transferring assets. This step was criticized for financing current interest rate cuts.
Mr Ford made high Ontario electricity costs a key topic in his campaign by abolishing some liberal renewable energy contracts and focusing on a $ 6 million compensation package for the Hydro One leader who resigned after the election and has not yet been replaced. . Nevertheless, neither the cancellation of renewable energy contracts nor the withdrawal of Hydro One led to the loss of hydraulic engineering costs.
Energy Minister Greg Rickford said the government was working to achieve promised reductions, although he did not respond on January 1, 2019.
"The government remains committed to clearing the remaining hydrophobicity from the previous government and cutting electricity bills by 12 percent," said Sidney Stony, spokesman for Mr. Rickford. At present, Ontario will support raising rates to inflation, translating debt payments for old assets into government books, as recommended by the General Auditor, she said.
Last week, the Office of the Prime Minister announced that he would appoint the Chief Secretary, Mr. Ford, Jenny Bern, to fill the vacancy on Ontario Energy Council, which regulates tariff setting in the province and would be the key agency used to exert pressure on industry, to lower their costs and save consumers. The committee controls all rates, but the government can also issue directives to the regulator, which will affect its decision.
The appointment was prompted by Robert Hope, an analyst at Nova Scotia Bank, to lower his expectations for Hydro One shares, stating that there would be political pressure to reduce the company's regulated returns to 8 percent from 9 percent.
The government has filed a message expecting all regulated companies, whose costs are passed on to consumers, to help lower rates. These include generators; Hydro One, which has large conductive wires; Local utilities are also known as local distribution companies (LDCs) that distribute electricity to consumers. Last autumn, the regulator froze a part of the rate, but some LDCs received approval to go on increasing costs, while others asked for higher rates to wait for the board.
The Hydro One, which serves customers directly in some parts of the province, applied for a retroactive increase of 1.8 percent in 2018 and another 1.8 percent in 2019 in combined transmission and distribution fees. This request is still under consideration by the Energy Committee. Nevertheless, his rural and suburban clients had their distribution costs limited by the former liberal government, which would increase only a small part of their clients.
Toronto Hydro, which serves 770,000 customers in the city, was the biggest trip to date, but the spokesman said that customers would receive a May lower rate as part of the government's commitment to keep the overall growth rate pace with inflation. Toronto Hydro is in the last year's $ 2 billion capital program and plans to launch a similar investment program over the next ninety years, spokeswoman Tory Gass said on Monday.
Peter Tabuns, a nuclear energy critic Peter Tabuns, said the government does not seem to have a strategy to achieve the promised reduction in rates after the transfer of taxpayer costs, which adds pressure to the growing provincial deficit. Meanwhile, any efforts aimed at reducing the incomes of local utilities will worsen their ability to maintain the system and deprive municipal owners of such necessary revenues, he said.