By Joel Wittnebel/The Oshawa Express
Whether you pay your bill to Hydro One or to the Oshawa Power and Utilities Corporation, Premier Kathleen Wynne stresses that everyone will be seeing some relief as a result of the Liberal’s plan to slash hydro rates by as much as 25 per cent.
The new plan, announced earlier this month, will see the Liberal government refinancing approximately $28 billion in project costs over the next decade in order to stretch out the payments and give Ontarians relief on their hydro bills.
The reduction includes the eight-per-cent cut that came into effect on Jan. 1 when the provincial government announced it would be cutting its portion of the HST from electricity bills.
And while the remaining 17 per cent is set to come into effect this summer, the plan has drawn the ire of critics who claim the plan is only pushing the costs for hydro on to future generations. However, for Wynne, this is the only fair way to do it.
“We knew that rising hydro bills had hit household budgets very, very hard and that hydro rates had gone up too far and too quickly, and that was the unfair situation that we were dealing with, people’s bills were unfairly increasing and so we’re fixing it,” she said during a media roundtable at Queen’s Park.
“We were basically asking today’s generation to pay all of the costs, or pay the majority of those costs upfront, and what that meant was that they were paying for past neglect and they were also paying for future usage of that infrastructure and that wasn’t right.”
The interest for refinancing the projects could be as much as $25 billion over the next 30 years, but for Wynne, the new plan will have everyone paying their fair share.
“We shouldn’t be asking a senior on fixed income to pay a premium today so that in 20 years, a family can pay less,” she says. “It needed to be more evenly distributed across the generation.”
The premier said the government will be working closely with local hydro providers to ensure the reductions are felt across the province.
“We’ll be working with all the distribution companies in the province. This isn’t just about Hydro One, this is everybody in the province,” she says.
In terms of the reductions, the refinancing plan will result in the reduction of the global adjustment charges, which have recently drawn the attention of many municipalities facing rising hydro costs.
Wynne says the reduction is “built on real structural change in the system,” and the new plan will see rates rise only by the rate of inflation over the next two years.
For Mayor John Henry, the announcement is a good thing, but there is a lot more that needs to be done.
“I’m happy to hear that they’ve recognized the challenge that has been created by the cost of hydro in this province,” he says.
“This is a start, but more needs to be done. We need to deal with the issues of peak energy, time of use, we need to make sure that our manufacturers are competitive with our neighbouring provinces and the United States. We have to be on the same playing field in order to create the jobs and the economy that we should be able to have.”
And not only that, but Henry says there needs to be further relief and the hydro issue has trickled down and caused a series of other issues in the community.
“Hydro challenges are causing a lot of the other challenges as it relates to social housing,” Henry says.
“If they’re going to do this, they need to have it flow through to the end user – it can’t just be a cash grab for people who rent buildings. So they have a lot of work to do with this, and I’m happy they’ve started, but I have high expectations that they’re going to do more so that we can help the residents.”