By Jenn Watt
Clarifying the province’s billing practices and finding mechanisms to cap or bring down the cost of electricity will go a long way to ensuring the health of the economy, a new report from the Ontario Chamber of Commerce says, and the local chapter of the chamber is echoing that message.
Last week, the Ontario chamber released a comprehensive report on the complicated way the province calculates energy prices, how those prices are hurting the economy and highlighting ways to get the system under control.
Called Empowering Ontario: Constraining Costs and Staying Competitive in the Electricity Market, the report addresses concerns that the Haliburton Highlands Chamber of Commerce has long been hearing from its members, manager Rosemarie Jung says.
“I’ve heard from a number of businesses that have said ... we don’t know what our costs are and they’d like to be better informed so they can make decisions and voice their concerns about what they’re being charged and how they’re being charged,” she said on Friday.
The 23-page report explains how the province came to have one of the highest advertised electricity rates in North America with predictions of a steady increase in costs.
“Electricity bills are only expected to rise in the future, with industrial customers’ bills forecast to increase by 13 per cent over the next five years. The rates for households and small businesses are predicted to climb by 25 per cent over the same period,” the report says, going on to say there is a risk that investors will go elsewhere when choosing where to set up shop.
The report explains how prices are set and how the “global adjustment” is used to compensate for the discrepancy between the market price of energy and how much contractors are being paid.
According to the report, medium-sized businesses are finding themselves in the most expensive position. “These businesses often have energy demand below the three megawatt threshold of the Industrial Conservation Initiative program and are also not included under the Regulated Price Plan and time-of-use pricing. As a result, they are left in the dark when it comes to their ability to reap significant cost savings from shifting their usage during peak periods,” the report says.
Jung says she hears from some businesses that have no option about when they use electricity. Since they’re not industrial, but can’t shift their business hours to off-peak periods, they have to pay the high prices.
“What we’ve heard from businesses here, and we know it to be true, is they don’t have an option. That’s when they operate is during peak hours and especially in the summer and they have no opportunity to cut their metered expenses,” she says.
The Ontario Chamber of Commerce’s report offers several recommendations about how the system could be better managed. Among them is spreading out the debt retirement charges, increasing transparency and better usage of smart meter data.
Whether the province chooses to follow any of the chamber’s recommendations or not, something has to change, Jung says.
“What I’m definitely hearing is [energy costs are] substantially cutting into their [businesses’] profit margins and affecting hiring ... and impacting growth,” she says.