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Brian Jones: Ontarians gouged, Newfoundlanders eviscerated


Newfoundland ratepayers aren’t alone in their impending fleecing by a hydro company.

Brian Jones

In Ontario, they’re arguing about coming increases in electricity rates, and their affordability and subsequent effect on people’s living standards, etc.

This sounds familiar, of course. But Hydro One — Ontario’s public utility with a name apparently invented by a Hollywood producer — didn’t foolishly build a $6.2-billion-cum-$12.7-billion hydroelectric dam 1,100 kilometres away from its nearest market.

Instead, it spent $6.7 billion to buy an American utility company, Avista.

A recent headline in The Toronto Star blared, “Hydro One’s $6.7B acquisition may gouge ratepayers, critics say.”

The story quoted Ontario Progressive Conservative Leader Patrick Brown as saying, “Hydro One is gouging ratepayers while using our money to buy up foreign companies. In the end, Ontario families will be left paying even more for hydro.”

So, Newfoundlanders aren’t alone in their misery. When their electricity bills double in 2020 or so, they can commiserate with their fellow Ontario ratepayers and share tales of woe and unaffordability.

But wait. The Toronto Star story went on: “Brown noted Hydro One is applying to the independent Ontario Energy Board to increase electricity rates by about $141 per household annually.”

You might have to read that sentence twice. It is a political issue in Ontario that electricity bills might go up by $141 per year. Announce such a thing in Newfoundland, and there would be dancing in the streets and several consecutive days of inebriation.

Anyone who remembers the multiplication tables will know at a glance that the monthly increase for Ontario ratepayers will be slightly less than $12. To be exact, their power bills will be $11.75 more per month. In Ontario, this apparently amounts to “gouging.”

In contrast, Newfoundlanders have known for more than a year that their monthly power bills will double when Muskrat Falls juice starts to flow.

This is not propaganda from critics or “naysayers.” It is what new Nalcor Energy CEO Stan Marshall admitted and declared in June 2016. The Liberal government does not deny it. Hence the recent talk about “rate mitigation” and “rate management.”

“Gouging” doesn’t do justice to what awaits Newfoundland ratepayers. “Eviscerating” would be more accurate.

The doubling of power bills will be challenging — to put it mildly — for ratepayers, and will be disastrous for the economy as money is sucked out of other sectors — entertainment, retail, restaurants, etc. — to pay bigger electricity bills.

Denial seems to have taken hold. Newfoundlanders probably need to see some hard numbers to grasp the reality, so here’s an exercise everyone should do: dig out your Newfoundland Power bills for 2016, or for the most recent 12 months. Calculate how much you paid to Newfoundland Power in the span of a year. Then double it to arrive at your post-Muskrat Falls annual payments.

Our house is probably a bit smaller than average, at about 1,500 square feet. Our most recent 12-month power bill total was $3,018. (We have a woodstove, which helps save on usage for heat, but then, firewood also has a price.) Our monthly average was $252.

After Danny’s Dam goes online, our 12-month electricity bill will be about $6,036, or $504 per month, on average.

People with 2,000- or 3,000-square-foot homes will likely face annual electricity bills approaching $10,000, amounting to more than $800 per month, on average.

Meanwhile, recall that in Ontario they’re mad about an $11.75-per-month increase.

Demands for a public inquiry and/or forensic audit are popular. The Liberals blame the entire fiasco on the Tories, overlooking the fact both parties wholeheartedly supported the Muskrat Falls project.

Here’s a prediction. Tell your grandchildren you read it here first: even when Muskrat Falls becomes operational, objective economic analysis will determine it makes more sense to shut it down and mothball it and eat the cost rather than keep it going.

 

Brian Jones is a desk editor at The Telegram. He can be reached at bjones@thetelegram.com.

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