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RCO





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PostPosted: Thu May 11, 2017 1:02 pm    Post subject: Wynne's Hydro Scam uncovered Reply with quote

( the liberals hydro plan is looking more and more like a total scam aimed at making them look better in 2018 but allowing for hydro rates to continue to rise the following years )



Ontarians to make up for 10 years of lower hydro bills over following 20 years



The Canadian Press
Published Thursday, May 11, 2017 1:50PM EDT



TORONTO -- Ontarians will see lower hydro bills for the next 10 years, but will then pay the price for that decrease for the following 20 years, under new legislation introduced today.

Electricity bills in the province have roughly doubled in the last decade, and have sparked increasing anger among Ontarians, leading to plummeting approval ratings for Premier Kathleen Wynne.

Ten weeks after announcing a plan to lower hydro bills, the Liberal government has introduced its legislation to lower time-of-use rates, take the cost of low-income and rural support programs off bills, and introduce new social programs.

Time-of-use rates are being lowered by removing from bills a portion of the global adjustment, a charge consumers pay for above-market rates to power producers.

For the next 10 years, a new entity overseen by Ontario Power Generation will pay that difference and take on debt to do so.

Then, the cost of paying back that debt -- which the government says will be up to $28 billion -- will go back onto ratepayers' bills for the next 20 years as a "Clean Energy Adjustment."

http://toronto.ctvnews.ca/onta.....-1.3409202
RCO





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PostPosted: Thu May 11, 2017 1:05 pm    Post subject: Reply with quote

Electricity prices to soar after four years, says secret Liberal cabinet document


The average Ontario hydro bill will jump almost $10 a month in 2022 and soar to $195 by 2027 under the Liberal government’s hydro plan, according to a leaked cabinet document obtained by the Progressive Conservatives.



As the Ontario government prepares to unveil legislation completing its 25 per cent hydro rate cut, the Progressive Conservatives have obtained leaked cabinet documents that suggest electricity prices will go up dramatically after four years.



By Rob FergusonQueen's Park Bureau

Thu., May 11, 2017


The average hydro bill will jump almost $10 a month in 2022 and soar to $195 by 2027 under the Liberal government’s hydro plan, according to a leaked cabinet document obtained by the Progressive Conservatives.

It was provided to the Star as Energy Minister Glenn Thibeault prepares to unveil legislation Thursday to enact a promised 25 per cent cut to skyrocketing electricity costs, keeping increases to 2 per cent annually until 2021.

But that’s when the breathing room for ratepayers ends for the better part of a decade, suggests the document.

Average monthly bills will rise 6.5 per cent a year from 2022 to 2027 and are forecast to jump 10.5 per cent the year after when they will hit $195. That’s up from $123 this year with the promised cut, lowering bills from an average $158 in 2016.

Rate increases, however, are minimal after 2028, falling slightly the next year and hovering around the 1 per cent mark from there until they are projected to fall 9.3 per cent in 2048, when the average monthly bill is expected to be $210.


Conservative sources say they obtained the information, called Global Adjustment (GA) Smoothing with the subtitle Confidential Cabinet Document from a “whistleblower” after Thibeault’s rate cut plan was presented to cabinet in early March. There is no date on the document.

A senior government official, speaking on background, stressed that the numbers in the cabinet briefing papers are forecasts, subject to change based on supply and demand for electricity.

The hydro bill projections could go down based on the government’s success in wringing further costs out of the system, as has been done in recent years and is envisioned in a new “technology agnostic” procurement system.


In that method, electricity suppliers would be asked to bid on providing hydro and the government would pick the cleanest, lowest cost options instead of mandating how much should come from nuclear and other sources.

“Everything has been about us stripping out costs,” the official said, adding hydro costs now are cheaper than projected in the government’s long-term energy plan from 2013.

Conservatives charged Thursday that the Liberal plan is all about boosting the Liberals’ re-election chances in the June 2018 provincial election as Premier Kathleen Wynne struggles in the polls.

Thibeault maintained the Liberal plan is the best option for Ontarians, who have seen hydro bills double in the last decade as the electricity system was upgraded to become more reliable and phase out heavily polluting coal-fired generation stations.

“We’re worrying about families now. We’re worried about small businesses now,” Thibeault said in the Legislature as he was peppered with questions by the Conservatives.

The minister, who took over the portfolio last June, slammed PC Leader Patrick Brown for stalling the release of his own plan for hydro rates.

“What’s the position of the official opposition when it comes to their plan?” Thibeault said, noting it has been 70 days since Brown said he would reveal one soon.

“We’re still waiting for anything credible.”

The Conservatives are holding a policy convention in Toronto in November.

NDP Leader Andrea Horwath revealed her hydro policy, which she said would result in rate cuts of up to 30 per cent, several days before the government came out with its 25 per cent plan.

Under the government scheme, 8 per cent came off hydro bills on January 1 with instant rebates of the provincial portion of the HST, with another 17 per cent to come this summer.

That will cost an extra $25 billion in interest charges over the next 30 years, by amortizing the costs of recent electricity system improvements over a longer period of time.

Premier Kathleen Wynne has compared that to a homeowner extending a mortgage term to get lower monthly payments.


The cabinet document also shows financing for the global adjustment portion of hydro bills — which covers the fixed costs of running Ontario’s power generation fleet and conservation programs — structured to fall sharply for the next nine years then reverse to sharp jumps of over 20 per cent from 2028 to 2047.

Conservatives said that amounts to a “comeback” of the controversial hydro debt retirement charge eliminated in the last couple of years.

Thibeault’s legislation will create a framework for financing the global adjustment, which will result in lower costs the first 10 years and higher costs in the last 20 as more interest payments are loaded onto the latter years of the 30-year amortization deal, the senior government official said.

As well, the legislation will amend existing laws to shift programs like hydro bill assistance for low-income families to the broader tax base of citizens, instead of sharing the cost on all hydro bills.

https://www.thestar.com/news/queenspark/2017/05/11/electricity-prices-to-soar-after-four-years-says-secret-liberal-cabinet-document.html
cosmostein





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PostPosted: Thu May 11, 2017 1:23 pm    Post subject: Reply with quote

If the document is in fact legitimate;
This does how some cracks in an otherwise fairly tight ship the OLP has maintained since 2003.
RCO





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PostPosted: Thu May 11, 2017 1:57 pm    Post subject: Reply with quote

cosmostein wrote:
If the document is in fact legitimate;
This does how some cracks in an otherwise fairly tight ship the OLP has maintained since 2003.



the CBC posted a graph of the numbers to twitter , it shows rates going down for 2018 - 2020 , then rise again until 2048 !

so I think its safe to say this plan is a total scam , its only about making the liberals look good in time for 2018 election and next little while afterword , and then rates will continue to rise for the next several decades .


you have to wonder if there is people within the liberal party desperate for renewal and a leadership change ? the release of this document hurts wynne the most as she had the most to gain by hydro rates going down for 2018

I personally don't see how wynne can continue as premier much longer , especially if things in the Soo go bad which they increasingly appear to be
Bugs





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PostPosted: Thu May 11, 2017 3:04 pm    Post subject: Reply with quote

This is incredible! Not even I, who despise the present government -- going back to McGuinty -- with an intestinal passion, would not have predicted this degree of deception and venality.

This is literally selling the people of Ontario out. These average figures are for urban dwellers, but you have no idea what power costs in smaller communities. I went away for two months, and used less than $8 a month in current, what with all the off-hour discounts, etc. All that was going was a refrigerator and a furnace fan set on low. But the delivery charges were $40, round numbers! By the time everything was calculated, it was still a $60 bill. Does anyone understand how their bills are calculated anymore?

I have neighbours who can't keep up to their power bills. It's like a car payment, already.

You don't have to be an expert to witness the effects starting to kick in. This carbon tax is going to get a nibble, at least notionally, every time we consume anything, because carbon products are inevitably used in the process of making and distributing our stuff. It will be like inflation. It will be like an automatic price-increaser mechanism.

What bothers me, and why I grow impatient is that the imagination lags behind reality, in this brave new world we are entering. Why would a government put its own people in bondage to all this debt? Just to fool the public, so that they can hide how bad the future looks? ... or that they don't have a clue what to do about it? Is it because they, themselves, are in denial?

At some point, you really have to wonder if the word 'treason' has any applicability. Isn't this as bad as anything Benedict Arnold did?

=================================

There are obviously civil servants who think about such things, as there should be. And they create paperwork. You can bet, there are other little study groups in different buildings, who are estimating other costs, too. I don't find these estimates of future costs to be terribly accurate. If a government project comes in at 300% of the cost estimates made public before it started, it probably should be considered 'on budget' in reality, and build in a factor for lying.

But the point is there must be other places where the planners are looking ahead at the new costs and how they will impact the cost of -- say, running hospitals? The need for more income will follow this. We may be in a vicious cycle. We should have some right to know the picture before the election.

But if the politicians hope they can get away with it only in the short term,. They have to then develop new lines of BS to further hide their incompetence. They will be less trusted for being re-elected only by preventing the public from knowing what the numbers show. In this case, its gives us the verdict on the Liberal Party's 'green energy' policy. (Thank you George Smitherman, the other choice from Rob Ford in that famous Toronto mayoral election.)

But there have to lots of planning groups who can anticipate the effects.

The only way they can improve their chances of being elected is to hide the new costs from the public at any price -- and all the Liberals went for it.

These people should have been fired four years ago. Give Wynne her due as a politician, and make allowances for the mess she inherited, she still only made things worse by doubling down on the McGuinty blunders. The point is it's time to hose out the stable.


Last edited by Bugs on Thu May 11, 2017 3:21 pm; edited 1 time in total
cosmostein





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PostPosted: Thu May 11, 2017 3:13 pm    Post subject: Reply with quote

RCO wrote:

you have to wonder if there is people within the liberal party desperate for renewal and a leadership change ? the release of this document hurts wynne the most as she had the most to gain by hydro rates going down for 2018


This was my first thought.
If this is in fact a cabinet document that has been leaked, its basically a coup against the Premier.

At this point unless the OLP grabs someone completely removed from Provincial Government, is there really a thought amongst the party that they can salvaged at this point?

We are basically 12 months and change away from the next election;

If the Premier resigned today you would have a new leader in September?
Then govern for a few months before having an election where you party may end up as the second opposition party and burn the new leader with the stain of that loss.
cosmostein





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PostPosted: Thu May 11, 2017 3:23 pm    Post subject: Reply with quote

Bugs wrote:

These people should have been fired four years ago. Give Wynne her due as a politician, and make allowances for the mess she inherited, but she only made things worse by doubling down on the McGuinty blunders. The point is it's time to hose out the stable.


What was so interesting is that when Wynne was elected even thought she was from the McGuinty Government we seemed to forget everything that occurred just prior.

I really want to understand what happened Chris Bentley and the seemingly overnight resignation of the former Premier and the subsequent resignation of Bentley and Duncan during the period in which Parliament was Prorogued.

The Liberals won the election that followed and no one really seemed to care anymore that in the span of about 10 months the Premier and four cabinet ministers left Provincial Government.

While Ontario is hosing out the stable;
Someone in the new government should be at least attempting to figure out what the heck went on if anything?
Bugs





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PostPosted: Thu May 11, 2017 9:06 pm    Post subject: Reply with quote

It's true, the public really gave her a chance, without caring that she was a woman, or a lesbian, or anything else. She had an opening. But the way McGuinty (and the others) washed their fingerprints off their handiwork and left town as quietly as they could smacked of shame or something worse.

And, of course, some of McGuinty's top staffers went to work for Trudeau more recently.

You are right, it's was as if it was understood that Wynne winning a majority meant that McGuinty would be redeemable politically. He was in such disrepute that he wouldn't dare show his face until after the election. He's one of these lucky mediocres who always seem to get the breaks they didn't deserve.
RCO





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PostPosted: Fri May 12, 2017 6:19 am    Post subject: Reply with quote

Liberals' reckless blunders to blame for hydro fiasco


lorrie-goldstein
By Lorrie Goldstein, Toronto Sun
First posted: Thursday, May 11, 2017 06:05 PM EDT | Updated: Thursday, May 11, 2017 06:52 PM EDT



wynne
There is no free lunch when it comes to electricity prices, no matter how Kathleen Wynne's Liberals try to spin it. (TORONTO SUN/FILES)


Confidential cabinet documents on Ontario electricity rates drafted for Premier Kathleen Wynne’s government and released by the Progressive Conservatives Thursday reveal that the Liberals’ so-called “Fair Hydro Plan” is a farce and a mirage.

They demonstrate that there is no free lunch when it comes to electricity prices, no matter how the Liberals try to spin it.

Simply put, when you take on $25 billion in new debt to give hydro consumers an average 25% reduction on their electricity bills today, it means you’re going to hit them with even higher bills tomorrow.

Especially since the Liberals also say they will limit annual hydro rate increases to no more than inflation for the next four years, meaning rates will explode once this artificial lid comes off.

That’s assuming the entire plan isn’t another one of Wynne’s “stretch goals” (see auto insurance) that she will abandon if she wins next year’s election.

To be fair, hydro rates were going up no matter who won the 2003 election which brought the Liberals to power, because previous governments of all stripes had neglected the system.

But they didn’t have to skyrocket as they did under the Liberals.

That was due in large part to their reckless blunder into expensive and unreliable green energy, chiefly wind and solar power, which wasn’t needed to replace coal-fired electricity, the main justification the Liberals gave for skyrocketing hydro rates.

(The Liberals actually replaced coal with nuclear power and natural gas.)

In 2011, then auditor general Jim McCarter predicted that according to the Liberals’ own numbers, electricity rates would rise an average of 7.9% annually from 2010-2015 with 56% of that due to renewable energy.

Electricity, McCarter warned, would cost consumers $4.4 billion more than necessary over 20 years, because the Liberals failed to follow the advice of their own experts by offering overly generous, 20-year contracts to wind and solar developers.

By 2015, McCarter’s successor, Bonnie Lysyk, estimated the bill had soared to $9.2 billion, with the Liberals paying twice the average cost for wind power and 3.5 times the cost for solar power, compared to the U.S.

The Liberals paid almost $2 billion for smart meters, double the original price tag.

They cancelled two unpopular gas plants before the 2011 election (needed, in part, to back up wind power) at a cost of up to $1.1 billion over 20 years, according to the auditor general, 378% higher than the Liberals’ estimated cost of $230 million.

Because their policies created an energy surplus — as many manufacturing companies closed due in part to high electricity prices — the Liberals had to pay renewable energy developers not to produce electricity, since they were contractually obligated to buy their power first, or sell it at a loss to the U.S.

While the Liberals made blunder after blunder, the costs went up and up.

In 2013, they predicted residential electricity prices would rise 42% by 2018.

In the decade between 2006 and 2016 prices doubled, making Ontario’s electricity the most expensive in Canada, according to Hydro Quebec’s annual survey of major North American cities.

With their so-called Fair Hydro Plan, the Liberals aren’t solving the mess they’ve made of electricity rates.

They’re kicking it down the road and making it worse.

http://www.torontosun.com/2017.....dro-fiasco
RCO





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PostPosted: Fri May 12, 2017 6:20 am    Post subject: Reply with quote

Ontario hydro rates to soar: Liberal document

By Shawn Jeffords, Political Bureau Chief
First posted: Thursday, May 11, 2017 01:31 PM EDT | Updated: Thursday, May 11, 2017 01:37 PM EDT


TORONTO - Ontarians are in for a hydro shock.

An internal cabinet document leaked to the Progressive Conservatives shows that electricity rates in the province will remain stable in the lead up to the 2018 election, and then spike in 2022.

The document, which breaks down the Liberal government’s recently announced plan to slash hydro rates by 25%, shows that prices will begin to rise for the average homeowner following this year. The government plans to limit rate increases to 2% a year, but then prices will jump in 2022 when the cap expires.

The Tories say the document was presented to cabinet in March and that they obtained it from a “whistleblower.”

It says that between 2022 and 2027, Ontario residents will be zapped by a 6.5% jump annually, each year. That will be followed by a whopping 10.5% increase in 2028.

When all those hikes are applied, the average monthly hydro bill in Toronto will leap from $142 to $215.

In March, Premier Kathleen Wynne announced a plan to cut hydro rates by 17% after months of outrage over increasing electricity costs. The cut amounts to 25% if a previous 8% HST rebate is included.

But the cost of the rate cut is an estimated $25 billion in interest payments over the next 30 years as the government had to reorganize the system’s debt in order to make the reduction possible.

Liberal Energy Minister Glenn Thibeault unveiled the legislation that enables the hydro cut Thursday, giving the legislature eight days to debate and pass the bill before Queen’s Park begins its summer break.

Initially, Thibeault said he couldn’t confirm the document or verify its numbers.

“I’ve been in this position for 11 months,” Thibeault said. “I’ve seen literally thousands of graphs. So for any confidential document, I can’t verify it.”

Thibeault stressed government has received figures for months on their hydro plan which included “thousands of documents” and “hundreds of briefings.” But he did dispute the accuracy of the 10.5% in 2028.

Asked if documents presented to cabinet are often false, the minister said typically reports are presented as “topics for discussion.”

But later Thursday afternoon, Thibeault released a statement saying the documents obtained by the Tories were only a draft.

“Patrick Brown and the PCs have instead decided to share an outdated document with data that is months old, as they try to distract from the fact that they have offered no credible ideas for hydro rate relief,” Thibeault said in the statement. “We have been working on this plan for months, and as we worked on it, the documents and calculations evolved, meaning that numbers shared by the PCs today are completely inaccurate.”

'DESPERATE GOVERNMENT'

It’s no coincidence that secret Liberal documents show hydro rates will skyrocket after next summer’s provincial election, says the Progressive Conservative energy critic.

MPP Todd Smith slammed the government’s plan to slash hydro rates by borrowing billions, saying documents leaked to the Tories by a “whistleblower” show the true cost of the scheme.

He called the reduction plan a “desperate” ploy ahead of the key 2018 vote.

“They are simply borrowing to get them through the next election and (are) not dealing with the underlying reason why our electricity prices are as high as they are,” he said.

“This is a desperate government. This is a desperate issue for this government. They’ve created legislation that we’re only getting a few days to look at.”

Smith also said the documents suggest the government plans to resurrect the much-hated debt retirement charge. That fee, which was recently curtailed by the government, added about $4 to $5 on the average bill.

But the new Clean Energy Adjustment, which will be placed on bills in the late 2020s to help pay down the debt created by the Liberal’s rate cut, will be like the retirement charge “on steroids,” Smith insisted.

Energy Minister Glenn Thibeault denied people will once again have to pay a debt retirement charge.

NDP energy critic Peter Tabuns said he believes the cabinet document is legitimate and it points out what his party has been saying all along: The Liberal plan doesn’t address the hydro problem.

“It just means that the Liberals allow all of the things that are driving higher prices to continue to be there,” he said. “They’re able to suppress the price for awhile. They piled enough money on top of it that they can make it look good for a bit. But it’s all going to burst out again.”

http://www.torontosun.com/2017.....l-document
RCO





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PostPosted: Sat May 13, 2017 11:10 am    Post subject: Reply with quote

Watchdog urged to probe Liberals' hydro rate cut plan

By Shawn Jeffords, Political Bureau Chief
First posted: Friday, May 12, 2017 11:04 AM EDT | Updated: Friday, May 12, 2017 06:56 PM EDT



TORONTO - The New Democrats have asked the province’s financial watchdog to probe the Liberal government’s hydro rate cut plan.

NDP energy critic Peter Tabuns wrote to financial accountability officer Stephen LeClair on Friday asking for the investigation. Tabuns says secret cabinet documents leaked by a government whistleblower point to serious problems with the scheme, which will see electricity rates soar by more than 50% by 2028.

On Thursday, Energy Minister Glenn Thibeault disputed the accuracy of the figures in the leaked cabinet document.

Tabuns said he would like an “objective assessment” of the entire Liberal plan before MPPs are asked to pass the legislation.

“Frankly, we’re going to be asked to vote on this in the next eight days,” he said. “I don’t know about you, I don’t trust Liberal numbers.”

In March, Premier Kathleen Wynne announced a plan to cut hydro rates by 17% after months of outrage over increasing electricity costs. The cut amounts to 25% if a previous 8% HST rebate is included.

The leaked document Thursday says that between 2022 and 2027, Ontario residents will be zapped by a 6.5% jump annually each year. That will be followed by a whopping 10.5% increase in 2028.

sjeffords@postmedia.com

Year Average Monthly Residential Bill % increase/decrease from previous year
2015 $136 9.8%
2016 $158 16.7%
2017 $123 -22.1%
2018 $126 2%
2019 $128 2%
2020 $131 2%
2021 $133 2%
2022 $142 6.5%
2023 $151 6.5%
2024 $161 6.5%
2025 $172 6.5%
2026 $183 6.5%
2027 $195 6.5%
2028 $215 10.5%

http://www.torontosun.com/2017.....e-cut-plan
RCO





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PostPosted: Wed May 24, 2017 6:53 am    Post subject: Reply with quote

May 24, 2017 5:38 am

Ontario budget watchdog to release report on Liberal hydro plan Wednesday


By Staff The Canadian Press




TORONTO – Ontario’s financial accountability officer is presenting a report today on the fiscal impacts of the Liberal government’s plan for hydro relief.

Legislation expected to pass next week would cut bills by an average of 17 per cent, but would also cost consumers more in the long run.

Just how much more is a contentious issue at the legislature in light of leaked cabinet documents suggesting there will be large increases after an initial drop.


READ MORE: Ontario NDP to vote against Liberal government’s hydro bill plan

The Liberals have said after the 17-per-cent cut, rate increases will be held to inflation for the next four years, and in 10 years ratepayers will have to start paying back debt that will be accumulated in order to finance lower rates for the next decade.

The government says that cost to consumers will be up to $28 billion — the cost of paying back the debt with interest.

It also comes with an additional cost to taxpayers, with $1 billion a year coming from government coffers to finance an eight-per-cent rate cut that took effect in January, and another $2.5 million over three years to pay for cuts for low-income and rural ratepayers.

READ MORE: Ontario hydro bills set to drop, then ultimately leave consumers paying more

The leaked cabinet document shows that from about 2027 onward, when people would start paying off debt and interest associated with the hydro plan, consumers will be paying more than they would without the Liberal government’s plan to cut costs in the short term.

The government has dismissed the document as containing outdated projections, but won’t make public any of the various other projections it says went before cabinet.

http://globalnews.ca/news/3473.....wednesday/
RCO





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PostPosted: Wed May 24, 2017 11:48 am    Post subject: Reply with quote

Ontario hydro plan will have a net cost of $21B: watchdog



The Canadian Press

Wednesday, May 24th, 2017



TORONTO — Ontario’s budget watchdog says the Liberal government will spend $45 billion over the life of its hydro plan to save people $24 billion on their electricity bills.

A report from the financial accountability officer says this means there will be a net cost of $21 billion to Ontarians over the approximately 30 years of the plan.

The $45 billion is mostly the cost of funding an eight-per-cent rebate that took effect on bills in January, but that assumes balanced budgets for the next 30 years.

The FAO says if the government has to fund that rebate through debt, the cost to the province could balloon up to $93 billion.

Legislation to cut electricity bills by 17 per cent on average — on top of the eight-per-cent rebate — is before the House and has to pass in the remaining four sitting days before summer if relief is to be delivered under the timeline the Liberals promised.

The Liberals have said after the initial cut to bills this year, rate increases will be held to inflation for the next four years, and in 10 years ratepayers will have to start paying back debt that will be accumulated in order to finance lower rates for the next decade.

The FAO says that from 2017 to 2027 electricity costs will be lower than they would have otherwise been, saving ratepayers $33 billion, but after that, electricity costs will be higher than under the status quo, with ratepayers spending $9 billion more through to 2045.

The hydro plan will lower time-of-use rates by removing from bills a portion of the global adjustment, a charge consumers pay for above-market rates to power producers. For the next 10 years, a new entity overseen by Ontario Power Generation will take on debt to pay that difference.

Then, the cost of paying back that debt with interest — which the government has said will be up to $28 billion _ will go back onto ratepayers’ bills for the next 20 years as a “Clean Energy Adjustment.”

The FAO estimates the cost of that interest will be $21 billion, assuming a five-per-cent weighted average interest rate. If that rises to six per cent, ratepayers will end up paying $30 billion, the FAO projects.

Premier Kathleen Wynne promised to cut hydro bills after widespread anger over rising costs helped send her approval ratings to record lows.

Electricity bills in the province have roughly doubled in the last decade, due in part to green energy initiatives, and the government has said the goal of its hydro plan is to better spread out those costs.

http://ipolitics.ca/2017/05/24.....-watchdog/
Bugs





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PostPosted: Wed May 24, 2017 3:50 pm    Post subject: Reply with quote

This doesn't make much sense, except in the extreme short run, does it? We make our ultimate debt bigger, largely so the present government can 'save face'. I don't know why -- if this government, McGuinty included, isn't a failure, what does it take to get people to recognize failure?

The bet is that stupid policy decisions can be justified if they produce a short-term shelter from the consequences of previous stupid policy decisions.

From inside the bureaucracy, the cost is small. These debts are never paid off. They are merely serviced, and rolled over. The revenues of the state are now a mix of taxes and debt. To the extent that debt is eliminated it is done through inflation rather than repayment.

It's our job to prevent it getting this bad. So there's lots of failure to share.
RCO





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PostPosted: Thu May 25, 2017 8:00 am    Post subject: Reply with quote

Ontarians can expect higher hydro bills to repay short-term relief: FAO


Justin Giovannetti

The Globe and Mail


Published Wednesday, May 24, 2017 9:35AM EDT


Ontarians will pay higher electricity bills for almost two decades as part of the government’s plan to reduce power rates in the short term, according to a report from the province’s Financial Accountability Office.

Premier Kathleen Wynne’s proposal to cut hydro rates by 25 per cent this year while capping increases to the rate of inflation for the next four years will save consumers $24-billion. But it will cost the province $45-billion over the next 29 years, according to an assessment released Wednesday morning by the financial watchdog.

Ms. Wynne’s popularity has plummeted over the past year as hydro bills have soared and become a political liability for her long-governing Liberals ahead of next year’s general election.

The Premier’s Fair Hydro Plan would slash energy bills before the election and keep them low for much of the next government’s mandate. However, to lower bills in the short term, the government would need to increase them in later years to pay off the debt needed to finance the plan.

Opinion: Electricity policy: What went wrong in Ontario

Ontario taxpayers will repay $21-billion more by 2045 than they will save on their bills, according to the FAO. The watchdog warned that the financing costs for the plan could increase rapidly in future years if interest rates change or if the government can’t balance its budget over the next three decades. If Ontario were to fall into deficit and borrow additional funds to finance the plan, the eventual cost could increase to as much as $93-billion.

“We’ve always said that the proposed Fair Hydro Plan will cost more over the long term, but it will share the costs of our investments more fairly over a longer period of time and lower bills by 25 per cent on average starting this summer,” Energy Minister Glenn Thibeault’s office said in a written statement.

The Energy Minister added that the FAO report took into account a possible increase in interest rates and the need to borrow all the money for the plan, scenarios he called “extremely unlikely.” And he said government moves to lower costs in the electric power system, perhaps utilizing technological developments, were not included.

The opposition Progressive Conservatives dismissed the government’s hydro plan as a quick fix before the election that will do little to fix the long-term problems facing Ontario’s power system. “It’s fantasyland,” said PC energy critic Todd Smith. “It’s all about the next election.”

After the 25-per-cent rebate, which could come as soon as this summer, the average monthly bill is expected to drop from $164 to $123.

Bills should remain relatively low until 2021 under the plan. Rates are then expected to increase 6.8 per cent a year from 2021 to 2027. The FAO estimated that the average monthly bill will increase to $213 by 2028. To repay the cost of the rebate plan, the average consumer will pay thousands in additional costs – about $22 a month from 2028 to 2045.

“The impact is greater than we had feared,” New Democrat Peter Tabuns told reporters Wednesday. He said Ontarians will turn against the plan when they learn that their bills will be higher for decades after just a few years of relief.

“What the Liberals brought forward is not sustainable and will be hugely problematic for ratepayers for decades to come,” he said.

The billions of dollars in extra debt needed to lower rates will not appear on the government’s books but will instead be raised by Ontario Power Generation (OPG), the Crown corporation responsible for generating about half the province’s electricity.

The debt needed to finance the plan should peak at $26.2-billion in 2027, according to the FAO. The province will provide 45 per cent of the financing, with the rest raised from banks and other investors by OPG. If the province raised the full amount and did not involve OPG, $4-billion would be saved in lower interest costs, the FAO said.

Financial Accountability Officer Stephen LeClair planned to speak about the report Wednesday morning, but his news conference was cancelled without explanation 15 minutes after it was supposed to start.

https://www.theglobeandmail.com/news/national/hydro-plan-will-cost-45-billion-to-save-ontarians-24-billion-fao/article35096250/
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