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BOB RUNCIMAN COLUMN FOR RELEASE THE WEEK OF JAN. 25-30, 2010

If the ever-increasing cost of electricity has given you the January blues, you might want to stop reading right now. Because what I’m about to tell you won’t brighten your mood. The sad truth is, things are about to get a whole lot worse.

Two policies of the McGuinty government will hit your Hydro bill, by a lot, this year: time-of-use pricing and the Harmonized Sales Tax. And the government’s energy policy is laying the groundwork for much, much higher prices in the years to come.

First, let’s look at the effect of that new so-called Smart Meter that’s likely been installed at your home. It will allow Hydro One to charge you based on the time of day you use electricity. The new system will be implemented beginning sometime this year.

Let’s look at the November 1 through April 1 schedule for time-of-use pricing: from 9 p.m. to 7 a.m. weekdays and all day on weekends the cost is 4.4 cents per kWh; from 11 a.m. until 5 p.m. weekdays, it’s 8 cents; and from 7-11 a.m. and 5-9 p.m. weekdays, it’s 9.3 cents. Average it out over the full 168 hours in a week and your rate is 6.224 cents per kWh – a full 7.3 per cent above the current rate of 5.8 cents per hour for the first 1,000 kWh. (The amount of electricity Hydro One says is used by the average household.)

Time-of-use pricing is touted as a great efficiency measure, provided you use your electricity at off-peak times. In fact, it’s a money grab. Most households are very limited in their ability to change their electricity consumption pattern. It’s not that easy to turn off the big electricity users – electric heat, hot water heaters, refrigerators, freezers – during peak price periods, and it’s particularly difficult to change usage for people such as senior citizens who aren’t heading off to work in the daytime.

If a 7.3 per cent increase isn’t bad enough, McGuinty is going to sock you with an additional eight per cent when the Harmonized Sales Tax comes into effect on July 1. So we’re already looking at an increase of more than 15 per cent.

Unfortunately, the worst is yet to come.

Under the McGuinty government’s Green Energy Act, producers of renewable energy are being paid rates as high as 80 cents per kWh – compared to the recent market price of 3.3 cents per kWh or the 4.5 cents the government-owned Ontario Power Generation gets for most of its electricity.

I’m all for renewable energy, but its production should have some connection to economic reality. The pricing under McGuinty’s Green Energy Act is the stuff of fantasy. Worse, he’s tying the hands of successive governments by guaranteeing these outrageous prices with 20-year contracts.

So where’s the money coming from to pay these renewable energy producers when their projects go on-line? From you, of course. The 15.3 per cent increase of 2010 will seem like the good old days.

And all this from the guy who promised solemnly in 2003 that he would freeze electricity rates.

Bob Runciman is MPP for Leeds-Grenville. For past columns, news releases and video clips, go to www.bobruncimanmpp.com.