Ontario is planning to make electricity bills cheaper by zapping the debt retirement charge for residential hydro users and amping up programs that let industrial enterprises save money by switching power use to off-peak times.
The moves, to be unveiled this week, are the ruling Liberals' attempt to take a pocketbook issue away from the opposition parties, which frequently accuse the government of not doing enough to lower rates, ahead of a likely spring election.
Energy Minister Bob Chiarelli is set to announce the end of the debt retirement charge Wednesday afternoon at an east end Toronto recreation centre, saving the average household $5.60 per month,The charge will end at the same time the clean energy benefit expires, currently scheduled for Jan. 1, 2016.
One Liberal insider said the government is planning other measures to save residential electricity customers money, and that these measures would be "progressive," in contrast to the clean energy benefit which disproportionately rewards people who use more electricity.
The Grits are also expected to let more companies use the Industrial Conservation Initiative (ICI) and the Industrial Electricity Incentive (IEI), which offer discounted power to factories and other businesses, a move to be unveiled Thursday. Cutting hydro rates for business is seen as a key way to stimulate the province's manufacturing sector.
Mr. Chiarelli's office would not discuss either announcement, but both a budget-rollout plan leaked last month and industry sources confirmed the details.
The debt retirement charge was instituted in 1998 to help pay down the debts of Ontario Hydro, the former Crown corporation that was broken into several smaller organizations. The debt, which started at $7.8-billion, was estimated at $3.9-billion last year. The Progressive Conservatives argue the original debt has been paid and the Liberals are still charging the fee, which is 0.7 cents per kilowatt hour of electricity, to cover subsequent debts.
The controversial clean energy benefit, introduced in 2010 to defray the added cost of new wind and solar power contracts, knocks 10 per cent off hydro bills up to 3,000 kilowatt hours per month. The policy has been criticized as regressive and environmentally unfriendly, since it is most beneficial for wealthier people who use more juice.
Businesses are also expected to get more opportunities for savings under the new Liberal plan. The ICI allows big companies that consume a lot of electricity to pay lower "global adjustment" fees – which subsidize conservation programs and pay some electricity producers with fixed contracts – in exchange for cutting their demand at peak times, such as by moving manufacturing to late at night. One industry source said the government could expand ICI by allowing smaller enterprises to qualify for the program.
IEI, meanwhile, provides cheaper hydro to companies that expand or set up new plants.
Electricity costs have been a hot-button issue in the province, with both opposition parties attacking the Liberals over them. The PCs regularly accuse the government of driving up hydro rates to such an extent they discourage companies from setting up shop in the province.
The NDP, for its part, is promising $100 rebates to Ontarians to ease the sting of the monthly bill.
The Liberals, who control only a minority of seats in the legislature, need the support of at least one other party to pass a budget next month. If they cannot get it, the province will be plunged into a spring election.
The Tories have already said they are hungry for an election, while the NDP has not said what it will do.