Hydro price explosion.
Bob Gervais said he expects his hydro bill to go up by 20 per cent due to the various increases.
Patricia Lonergan
Many residents across the region are
finding an unwelcome surprise when they open their hydro bills this month.
“It’s going up a minimum of 20 per cent,”
said Bob Gervais, of Mississippi Mills, after he opened his bill to find a
notice outlining the various increases in place.
The first increase actually came on May 1
after Hydro One was given the go-ahead by the Ontario Energy Board to raise the
delivery rate. The rate varies depending on where a customer lives, but the
increase is less than 10 per cent for the average consumer, according to the
utility. Hydro One indicated the rate hike was necessary to maintain a reliable
distribution network.
Time-of-use (TOU) rates are also coming
into effect, meaning residents will be charged more when they use electricity
during peak and semi-peak hours. And, of course, there’s the additional eight
per cent added to the final total now that the HST is in place.
Gervais indicated his biggest concern is
how the various increases will impact his children.
“My daughter heats with electric heat,” he
said, adding salaries and pensions are not increasing at the rate electricity
bills are soaring.
The retired resident indicated he’ll be dinged
by peak rates since, as a senior, he can’t sit in his home in the middle of the
summer without air conditioning. He’ll also pay the highest prices to do
laundry since, at 75, he’s not prepared to head down into the basement to do
laundry after 9 p.m. on weekdays to save a few dollars.
Electrical engineer and green-living guru
Bob Nixon, of Carleton Place,
said homeowners need to prepare for an electricity “price explosion.”
Between the increased delivery charges, TOU
rates and the HST, Nixon calls it the perfect storm of financial factors.
“Consider this, even if you manage to re-arrange your life so that you’re using
more electricity at night than you are during the day, even then you will still
see an average increase of 25.5 per cent on your electricity bill,” he said.
“That’s going to hurt bad.”
Nixon has already seen an increase to $148
from $124, and that’s not accounting for TOU rates.
Those who heat their homes with electricity
are going to see a huge increase this winter, Nixon warned. Before switching to
a furnace, Nixon said heating his home accounted for 49 per cent of his annual
electrical consumption.
Lanark-Frontenac-Lennox and Addington MPP Randy Hillier said he has already heard from a
significant number of constituents worried about their hydro bills. While some
have seen huge and unexpected swings in their energy use – a troubling trend
the MPP suspects might be due to technical glitches – TOU charges are about to
double the cost of usage during peak periods.
“Most people cannot change their lifestyle
due to work,” Hillier said.
As for increasing the distribution charges
to upgrade and maintain the network, Hillier said Hydro One could do that “by
not being so bloody wasteful.” He pointed to what he called “exorbitant”
payouts made to departing Hydro One executives, noting “there’s clearly an
atrocious amount of waste at Hydro One.”
Hillier said he saw a lot of people
struggling last year to heat their homes and these increases won’t make it any
easier.
“I’m fearful how it’ll impact constituents
here,” he said, adding that with all the compounding increases in hydro rates,
residents might want to get a wood stove.
As for longer term solutions, the Progressive
Conservative MPP suggested Ontarians need a government that won’t spend so much
and drive up taxes.
In the meantime, anyone who is seeing wild
swings on their hydro bill is encouraged to contact Hillier’s office.
A TALE OF TWO TAXES
Previously only subject to the five per
cent GST, utility rates increased eight per cent on July 1 when the HST came
into affect.
Ministry of Finance spokesperson Scott
Blodgett said that, in general, the HST follows the same rules and tax base as
the federal GST, which applies to electricity and heating fuels.
“The government has said all along, while
the vast majority of things will see no change, some things, like electricity
and heating fuels, will change,” Blodgett said, noting Ontarians will see no
change in the sales tax status for 83 per cent of total consumer expenditures.
However, there is a point-of-sale rebate
for the provincial component of the HST on books, children’s clothing and
footwear, prepared meals under $4 and a list of other items. That means some
products subject to GST are not seeing an additional eight per cent provincial
component.
It wasn’t clear why some items are exempt
from the provincial portion of the HST while electricity and heating fuels are
not, although Blodgett noted the tax plan also includes “significant permanent
and temporary tax relief of $11.8 billion to people over three years.”
Hillier, meanwhile, suggested the essentials
have historically been off-limits to taxation. While that concept is not always
adhered to, he indicated it is an underlying principle.
But the current government has a “great
thirst for more revenue and everything is subject to taxation,” Hillier said,
referring to the added provincial component of the HST to utilities.