Board urges Reduction in Electric Costs for all Businesses

April 3, 2017

April 3, 2017, Niagara-on-the-Lake – The Board of Niagara-on-the-Lake Hydro (NOTL Hydro) urges the Minister of Energy to provide the same electricity rate reduction to all businesses that is being provided to residential, small business and farm electricity users.

“Businesses have experienced the significant increase in the cost of electricity over the past few years just like residential customers,” said Jim Ryan, Chair of NOTL Hydro, “and these businesses must compete globally and manage their costs.  One wonders how many jobs have been lost or not been created because of these high electricity costs.”

Business electricity customers have been discriminated against in a number of ways over the past few years:

  • Large businesses were excluded from the 8% Ontario Rebate for Electricity Consumers introduced on January 1, 2017;
  • The Debt Retirement Charge was removed for residential customers in 2016 and 2017 but not business customers;
  • Business customers must pay the Ontario Electricity Support Program and the Rural and Remote Electricity Rate Protection Charge even though the only beneficiaries of these programs are residential customers (this is being corrected this year);
  • Many businesses, particularly small businesses, cannot shift the times they operate so must pay more of the higher on-peak time of use rates; and
  • It appears, based on the Premier’s announcement, that large businesses will also not benefit from the planned further 17% reduction in the cost of electricity.

Many Ontario businesses are not able to take advantage of the Industrial Conservation Initiative which is the energy savings program offered to the large business sector as it requires the business to reduce their use of power at peak demand times.

A comparison of the all-in average cost of electricity between Ontario and the United States shows a pattern of providing relatively lower prices for business customers in the United States.

2015 Total average cost of electricity (¢/kWh) before DRC and HST in $CAD

Residential

Commercial

Industrial

Total
Niagara-on-the-Lake Hydro (Ontario)

15.3

14.5

12.2

13.9
United States (Public Power Utilities)

14.6

13.7

9.3

12.9

Source:  Niagara-on-the-Lake Hydro, American Public Power Association, Bank of Canada

While the Board of NOTL Hydro is not advocating mimicking the US pricing strategy it is clear steps should be taken to address the competitive challenge Ontario businesses face.  The NOTL Hydro Board advocates adapting the Ontario Fair Hydro Plan to also reduce rates for Ontario businesses.

The Board of NOTL Hydro has previously urged the Minister and the Premier to take steps to reduce the high cost of electricity in Ontario and has provided concrete suggestions.

NOTL Hydro Board Critiques:

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