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Another hike on power bill; This one for green energy plan

Source: The Chronicle Journal

TORONTO – Consumers will face higher electricity bills as part of an unprecedented $8-billion plan announced Thursday to create more renewable energy in Ontario.

People can expect an additional $5 per month on their hydro bills by 2012 – the latest in a series of incremental increases to taxpayers’ electricity rates.

Still, Premier Dalton McGuinty said it’s a small price to pay for clean power and the creation of thousands of jobs.

“We’re talking about an increase of one per cent, maybe $5 a month,” McGuinty said after announcing several clean-energy projects.

“On the other hand we’re investing in a new industry that will create jobs and prop up our economy.”

The 184 new projects announced Thursday include 36 community and aboriginal proposals as well as others by major corporations at home and abroad. They will create almost 2,500 megawatts of renewable energy from wind, solar and run-of-river hydro projects.

While McGuinty conceded any increase for consumers “is not insignificant,” he said people would understand the changes are needed to reduce coal-fired generation.

“We’re talking clean energy here, which doesn’t contribute to global warming,” McGuinty said.

“I think Ontarians feel some sense of responsibility as privileged global citizens that should be leading in this.”

Energy Minister Brad Duguid called the announcement the “big step forward’ in green energy.

While he acknowledged clean power is more expensive to produce than coal, he said the government had to create more power in one form or another and “there would have been a cost no matter what.”

“The advantage is we’re not poisoning the lungs of our kids when we use green energy,” Duguid said.

The latest projects are part of the largest green energy investment of its kind in Canadian history. Their total value eclipses the $7-billion deal the McGuinty government signed in January with a consortium led by South Korean industrial giant Samsung Group.

That deal was to build wind and solar farms that will generate 2,500 megawatts of power, as well as four plants to manufacture components for green energy projects, creating about 16,000 jobs – including 1,440 permanent ones.

The Opposition called Thursday’s announcement little more than a “consolation prize for the Ontario businesses that were frozen out” of the Samsung deal.

“The ultimate losers in Dalton McGuinty’s so-called green energy giveaway are Ontario families and businesses who will be forced to pay record electricity tariffs for at least 20 years,” the Progressive Conservatives said in a release.

NDP energy critic Peter Tabuns said there was the potential to create even more green energy jobs if the government were to bypass gas-fired and nuclear energy in favour of more clean technology.

The same holds true for affordability, Tabuns said, since consumers would benefit from large-scale action on efficiency conservation.

“The investment in nuclear power and gas-fired power really is huge; it dwarfs anything that we’re talking about in terms of green power,” he said.

“That’s where the action has to come, moving away from those sources and putting a lot more of our eggs back into the efficiency and conservation basket.”

Two weeks ago, the government quietly introduced a new charge to help cover $53 million of the Liberals’ conservation and green-energy program, which is expected to add about $4 a year to the average electricity bill.

A few days later, Ontario Power Generation said it was applying to increase its rates by 9.6 per cent starting next January. That would add about $2.75 to the average monthly electricity bill – all on top of the extra eight per cent consumers will have to pay when the 13 per cent HST takes effect in July.

The $5 extra a month attached to Thursday’s announcement would be in addition to those increases.

The projects announced Thursday will generate enough energy to power 600,000 homes, and are part of a larger initiative to shut down the province’s coal plants – including those in Thunder Bay and Atikokan – by 2014.

Ontario consumers currently pay 5.7 cents per kilowatt hour up to a certain monthly threshold, after which the rate rises to 6.6 cents.

OPG applies for rate hike to kick in next year

SOURCE: The Chronicle Journal

TORONTO – There’s more upward pressure on electricity bills in Ontario, which are already to rise July 1 because of the harmonized sales tax and again when a new energy conservation tax takes effect.

Ontario Power Generation announced this week that it was applying to increase its rates by 9.6 per cent starting next January.

The Ontario Energy Board, must approve the rate hike, which government owned OPG estimated would add about $2.75 to the average monthly electricity bill.

If approved, the new rates would remain in effect for two years.

The utility’s senior vice-president, Bruce Boland, said less than one-third of the requested increase is due to higher operating costs.

“The other matter is recovery of deferral account balances that were established at the last rate hearing,” Boland said in an interview.

“That represents over six per cent of the (9.6 per cent) increase.”

OPG must get rate changes approved by the energy board every two years, but did not ask for an increase last year. Instead, it stretched the current rates for a third year after making $85 million in internal savings.

“We’ve done some very extensive soul searching in reviews of our cost structure and found some significant savings over the last few years,” said Boland.

“We were able to pass that on through our low rate increase on our base amount of about three per cent.”

The board will hold public hearings on the proposed rate hike, likely later this year.

NDP energy critic Peter Tabuns said a 9.6 per cent rate hike would hit customers hard.

“Now’s the time to move out of nuclear into efficiency and conservation and renewable power.”

Ontario Power Generation, which operates three nuclear plants, four coal-fired stations, one gas-fired plant and 65 hydro-electric stations, produces about 70 per cent of the electricity used in Ontario.

Last year, OPG received 5.4 cents a kilowatt-hour for its nuclear output and 3.7 cents for its regulated hydro-electric output.

Both are below the rates most consumers pay, which is 5.8 cents for the first 1,000 hours and 6.7 cents for everything above that level.

By contrast, the government’s green energy program offers companies that produce electricity from wind turbines or solar panels up to 80 cents a kilowatt hour for their power.

Just last week, Energy Minister Brad Duguid confirmed the government had quietly introduced a new charge to help cover $53 million of the Liberals’ conservation and green-energy program.

That is expected to add about $4 a year to the average electricity bill. The government hasn’t actually made a formal announcements, so it is not clear when the new charge will take effect although a spokeswoman for Duguid indicated it could be as early as May.

Premier Dalton McGuinty insisted it’s not a tax, but a new fee of 33 cents a month, which he said will fund energy conservation programs.

In July, when the 13 per cent HST takes effect, Ontario electricity consumers will start paying an extra eight per cent on their bills, which previously were exempt from the provincial sales tax.

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