Hydro plans get government out of hot water

By Russell Catt

Centretown businesses cautiously support the provincial government’s proposed hydroelectricity reforms, but are frustrated that the government didn’t act sooner to prevent soaring prices.

The problems began last May when the provincial government opened the hydroelectricity market.

The resulting deregulation caused wide fluctuations in the cost of energy, rising from 4.3 cents to as high as nine cents per kilowatt-hour.

Last week, Eves said the Ontario government will fix hydro prices at 4.3 cents per kilowatt-hour as of Dec. 1, 2002. The Ontario premier also promised to give consumers a rebate for the difference between the cap and soaring cost of power, retroactive to May 1, 2002.

In addition, the government will continue their policy of maintaining hydro service to help people who are struggling to pay their bills until next March 31.

These reforms are important to families and businesses because the holiday season is one of the most expensive hydro periods of the year.

Hoa Vuong, manager of the Bank Street Golden Baguette bakery, saw his hydro bill almost double over the summer. He says he’s happy with the province’s changes.

The rebate is a big help,” says Vuong. “I get my money back and I don’t have to worry about controlling [my hydro usage] over Christmas.”

John Coughlin, manager of the Clock Tower Brew Pub on Bank Street, says small businesses are getting the best deal possible.

But he adds, “What I want to know is why didn’t [the government] do this in the first place?”

Mario Giannetti, owner of Preston Hardware, says he wasn’t surprised by the spike in hydro costs, or the government’s response.

“As soon as we started privatizing fuel for heating homes and electricity, we were going to be in trouble,” says Giannetti. “I think the government should have some control over our energy to make sure problems like these don’t happen.”

Richard Patten, Liberal MPP for Ottawa Centre, agrees. “We told the government, ‘You’ve got to do something. Hydro prices are double, even triple in some areas.’”

While both the government and the opposition support the hydro reforms, Patten has concerns with Eves’ plan for repaying Ontario Hydro’s $38 billion debt.

“What worries me is that the government has said that they plan to pay off the debt in shorter order than originally planned,” says Patten.

“Our feeling was, ‘Why do this on short order? Let’s relax repayments to help the people who need it.’”

While Coughlin and Giannetti believe the price fix and rebate are needed for both businesses and families, they realize that these measures do nothing to address the long-term problems of hydro reform.

“I think [the reforms] will put the lid on the problem temporarily,” says Giannetti. “Keeping the rates low won’t pay off the debt, though, so what they’re going to do is slowly raise the price instead of jacking it all at once as they did.”

Patten adds that these emergency measures will have negative financial consequences.

“Essentially there is less money for other things that need to be shored up as well,” says Patten. “It poses an interesting question of whether people will be happy with lower hydro prices if it means that they accept the current standard of health, education and the environment.”

While Patten believes the government must follow through on its promises to increase the Ontario power base, he also says he believes consumers must start conserving more energy.

But back at the Clock Tower, Coughlin is skeptical.

“We already know about turning off our lights when we’re not using them because we’ve already lived through an energy crisis,” explains Coughlin. “We insulate our windows during winter. What more will we have to do to keep bills low? Live in darkness?”