There Is No Easy Fix

09 Mar 2017 10:10 AM | Adi Dunkelman (Administrator)

Energy, particularly, electricity, continues to be a hot button issue and polls suggest that electricity rates are expected to be a major issue in the 2018 provincial election. On the heels of intense public pressure, it did not come as a surprise when the government announced its “Ontario Fair Hydro Plan” last week.

Our energy sector is undergoing a fundamental transition.  Is the "Fair Hydro Plan" the right solution?  Let’s take a look at the good, the bad, and the nuances in between.

First, the good.  The plan seeks to transfer certain program costs to the tax-base. This structural change is beneficial as it addresses the responsibility that we have as a society to support those most vulnerable to high energy prices with limited means to adjust their consumption and costs.

On the government’s plan to refinance the Global Adjustment, the benefits are less apparent. Didn’t we just remove the debt retirement charge from residential customers’ bills?  Now we are adding more debt.  Isn’t this Debt Retirement 2.0? The plan gives the illusion that we are paying less for our electricity, but in real dollars we will be paying more interest for the same amount of electricity.  By extending the financing term, we are also tied to OPG’s existing energy portfolio, which means less capacity on the grid for renewables.  Aren’t we repeating past mistakes by keeping up the illusion that energy is cheap? By doing so, we take away economic incentives for people to conserve and invest in energy efficiency.

The transition to a clean, integrated, and decentralized energy system is inevitable.  In Ontario and around the world, it is driven by individuals and communities who want to take ownership and participate in their own renewable energy projects, and fueled by innovations in technology and reduction in costs.

As we are moving through this transition, renewable energy has been unfairly blamed for the rise in electricity rates. But as Jake Brooks from APPrO and several journalists referenced in a recent article point out, there are several factors that have caused electricity rates to soar. Rather than looking for simple explanations and easy scapegoats, Ontarians would be well-advised to ask themselves a couple of fundamental questions: what kind of society do I want live in? And, what legacy do I want to leave for my children and grandchildren? With that in mind, they should take a good and long-term look at the driving forces behind electricity rates, as well as trends in technology advancements and costs.

The Fair Hydro Plan is a band-aid, short-term fix.  At OSEA, we strongly believe that we need a boost in overall energy literacy to have an engaged public, able to work with local governments to find appropriate, local energy solutions that address climate change challenges and enable the introduction of a much more integrated and decentralized provincial grid. For what that can look like, see what is happening in Oxford County, Brant County, City of Guelph, City of Markham, City of Toronto, etc.

Allowing for community participation and taking advantage of the opportunities to sustainably utilize local resources, creates good, quality jobs and resilient and economically vibrant communities.

For further discussion on this topic, I invite you to participate in our online member discussion forum and to reply to our short member survey.

- by Nicole Risse
Executive Director, OSEA

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