By David Poch, Green Energy Coalition
On March 21st Ontario Minister of Energy, Greg Rickford, released Bill 87, entitled Fixing the Hydro Mess. But rather than sustainably reducing consumer bills in Ontario it will enlarge the economic and environmental mess that past energy policies are visiting on the province.
Despite his ‘stick up for the little guy’ election stance, Doug Ford has decided to enrich Bay Street rather than Main Street. The legislation and accompanying policy and program announcements will cut energy efficiency programs for both large and small electricity users and reduce regulatory oversight for utilities and their shareholders.
Given that Ontario’s energy conservation programs have been freeing up power at a cost of 2.6 cents per kWh, and thereby reducing the need for new generation that according to Ontario Power Generation will cost 16.5 cents per kWh by 2025, the move away from conservation will inevitably hurt both large and small consumers.
Instead of a green and economically favourable mix of conservation and renewables, Ontario will proceed with costly nuclear plant rebuilds, largely benefitting the ethically embattled principal contractor, SNC Lavalin. And while Ford has railed against Hydro One’s executive compensation policies, he promises a streamlined Ontario Energy Board regulatory review process that will curtail opportunities for the regulator and consumer and environmental organizations to uncover and curb utility excess.
Minister Rickford claims that big business will invest in energy conservation without program support or incentives but the reality is quite different. Corporate investment policies require very fast paybacks on capital investments. When a mining company foregoes an efficiency improvement that would decrease their need for power and would pay back in 12 years because it won’t pay back within 8 or 10 years, it forces the electricity system to invest in generation and transmission that won’t pay back for 40 years. According to Ontario’s Independent Electricity System Operator, the provincial agency responsible for operating the system, in 2017 every dollar spent on conservation saved over 2.5 dollars that would have to otherwise be spent on more electricity supply.
The legislation will also move the cost of the previous government’s rate subsidies out of future electricity rates and into the provincial debt ultimately further lowering the incentive for customers, both large and small, to invest in energy efficient technology. A better approach would be to ramp up energy efficiency programs for commercial, industrial, and residential customers, but especially for low-income customers who can’t afford conservation investments, while ensuring that big business and affluent customers face the real cost of power when making technology choices.
David Poch practices environmental and energy policy law in Ontario.