With Kathleen Wynne’s popularity at 12 per cent and a Provincial election looming, Bob Delaney showed up in Sarnia pitching a 25% reduction in residential power rates.
The Mississauga MPP and Parliamentary Assistant to Energy Minister Glenn Thibeault described the “Fair Hydro Plan” as the right thing to do. “We’ve heard you,” he told members of the Sarnia Chamber of Commerce Energy Committee as he explained that power assets would be amortized over 50 years to ease the financial burden on residential users.
Since 2003 the Province has spent $50 billion on “wires and power plants” and “we now realize the life cycle is 50 years not 10 to 20”. A major power outage encompassed Michigan, Ohio and Ontario that year spurring the investment.
“That’s when we realized the grid was vulnerable and we did something about it” Delaney explained. “We took the pain and overhauled Ontario’s electrical system and we have been paying for it”.
But he says a day of reckoning is coming south of the border. “If you ask state representatives what keeps them up at night they will tell you it is the power grid”.
The US is still using coal but Delaney says, “70 per cent of electrical generation has not been upgraded, it is bloody awful and most states will have to raise rates and taxes”.
He predicts that will happen in the next three to five years putting Ontario businesses in a better position. But Kathleen Mundy, operator of Little Caesars Pizza franchises questioned the short-term sustainability of her business with soaring power costs and growing overheads. “The bottom line is shrinking to the point where business isn’t fun anymore”.
Delaney told Mundy he appreciates her comments but the Province is dealing with residential rates before moving on to business.
“The process isn’t finished. We are gathering data and trying to get a fix on it” says Delaney. He suggested there would be a “smoothing out,” of the Global Adjustment on business power bills by fall.
Ed Brost of JE&M Consulting stressed the need to make power costs more predictable and views Global Adjustment as a major factor. Global Adjustment is an accounting number used by the Province to cover debt charges.
Delaney described it as a variable and indicated the Province is taking time to “tinker with it”.