The Consumers Council of Canada welcomes the government’s recognition, in Ontario Finance Minister Dwight Duncan’s November 18th “2010 Economic Outlook,” that rapidly rising electricity prices are placing a terrible burden on consumers. The Council also welcomes the price relief the government has offered to consumers.
“This is good temporary relief, but does not address the basic issue of ever increasing prices for electricity and the need for cost containment in the sector,” said Council energy advisor Julie Girvan.
The Council is very troubled by the forecast of staggering increases in electricity prices over the next five years. The government must do something to reduce those increases and must press harder for industry costs of all kinds to be contained. As well it should rethink the Green Energy policy and look at how to implement it in a more cost-effective way.
The government has indicated that the one-billion-dollar annual cost of that price relief is “accommodated within the fiscal plan,” which probably means the price reduction will be financed by debt. Consumers Council President Don Mercer noted: “Consumers are not, in the long run, then, much better off.” The Council would much prefer to see the price relief come from genuine cost savings, such as from scaling back the unwarranted increases in utilities’ profit margins. Government must be transparent and accountable about where the dollars for the Ontario Clean Energy Benefit come from.
The government’s Ontario Clean Energy Benefit is perhaps a better option to help consumers with their rising electricity bills than some other suggestions (a price freeze, or complicated tax effort), but it really does nothing to address the issue of cost containment, which is the only real way to lower prices. The measure may, in fact, take pressure off utilities to contain costs.
There must be transparency in decision-making and accountability from decision makers so that Ontario residential electricity consumers know how an electricity bill payment is spent, can judge whether it is spent well, and can determine the benefits they can expect.