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Mayor fed up with hydro charges

Henry: Power costs are "destroying the economy of Ontario"

By Joel Wittnebel/The Oshawa Express

When looking at hydro bills for the City of Oshawa over the past year, something just doesn’t add up.

As the city continues to reduce its power consumption by employing green technologies and initiatives, the bill continues to sky rocket. The culprit? The global adjustment (GA) charge.

For Mayor John Henry, enough is enough.

“The cost of energy is destroying the economy of Ontario,” he says.

Specifically, it’s not the power costs, but the additional fees that push in to fill the gap. As the bill goes down thanks to energy-saving initiatives, the GA fee increases in order to fill in the gap. It’s exactly how the Province of Ontario set it up when it was implemented in 2007 to cover the cost of ailing power infrastructure.

Determined by the Independent Electricity System Operator (IESO), the charge changes from month to month and is based on series of factors. First, the difference between what IESO pays energy suppliers for the power and what the fair market value of that power actually is is built into the fee. It also includes the loss in global adjustment from surplus power sold to the United States without the GA attached.

It also covers other costs such as electricity system renewal in the province, and less popular things like the costs associated with the scandal-plagued gas plants cancelled by the province in 2013.

In 2015, the province collected $1.3 billion in GA fees. Henry quotes sources who claim that number is expected to increase to $2 billion this year.

“That’s what’s hurting us and making us uncompetitive,” he says.

In the upcoming budget year, the city estimates the GA will cost them $3 million and for Henry, the more he looks at the numbers, the more it frustrates him.

Through examining Oshawa municipal hydro bills shared with The Oshawa Express by the mayor, the disconnect is clear.

Between June 15 and July 6, 2015, it cost the city approximately $3,600 to operate its streetlighting system. The GA charge on top of that was $62,325 and combined with other charges and fees brought the city’s final bill to $151,287.

Over the last year, the city has increased the amount of streetlights in the city, but through various green initiatives has been able to cut down its power costs by a fifth.

Between May 17 and June 6, 2016, the city paid $2,996 for its streetlights to operate. The GA charge on top of that was $91,097, and totalled with other charges resulted in a final bill of $221,728.

“You should be really proud as a resident of this community that we’ve gone out and done all the right things and we’ve paid the bill for all the right things,” Mayor Henry says. “What shocks me is we’ve lowered our (energy) bill by one fifth, and our (final) bill has gone up.”

The energy consumption issue also creates particular problems for municipalities operating city facilities that cannot simply be shut down.

“We can’t turn the ice plants off in the summer time, we can’t turn our pool pumps off because it’s not the right thing or the healthy thing to do,” Henry says.

At the Legends Centre, the city paid $8,625 for power between June 15 and Aug. 4, 2015. The final bill was $83,815, with $48,701 of that being GA charges.

Now, the mayor is calling on the province to change the way it does business by halting the flow of grants and subsidies to municipalities and use those funds to cover its costs and let the cities keep their money.

“Stimulate the economy by allowing municipalities to keep what they’ve got in their baseline budget. Don’t give us more money, just let us use what we have,” he says. “Let me use the $3 million that we have to meet the needs of our residents and because it’s a baseline amount, it’s in the budget, we can use that to help offset tax increases.”

The mayor has been pushing his case to all levels of government and policy makers, meeting with the provincial parties, the Association of Municipalities of Ontario (AMO) and other mayors across the province.

“I’ve been meeting with anybody that will listen to me,” he says.

The mayor says it would be a “bold move” for a political party to stand up in 2018 and make a pledge toward taking such action.

For Henry, it doesn’t make sense of Ontarians to suffer with such inflated hydro bills.

“With what we have here, we should have everything,” he says.