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June 5, 2014

There's a week left until Ontario's provincial election day. In general, what has struck me is the almost complete lack of content in the platforms other than the ground the Liberals staked out in their budget. Apparently the PCs can't to math, and the NDP can't figure out a budget. As for the gas plant 'scandal', well, looks to me like lots of mistakes were made - including by private sector contractors - and the real damage done is more in the order of $253,000,000 than a billion dollars. It took some digging to find that number. Frankly, in this campaign, be afraid of big round numbers (like 1,000,000 jobs to be created or 100,000 jobs to be eliminated - they look like made-up-for-PR-impact numbers).

However, other than the general noise level that seems to come with elections, one thing has struck me in this campaign - the apparent inability of any of the parties, or many citizens, to understand the reality around electricity prices. Hit-and-run sound-bytes abound, and when I try to find the substance behind them, all I can grab onto is smoke. A few examples.

PC Leader Hudak claimed that high electricity rates in Ontario are driving jobs to Michigan. So, I looked up retail electricity prices in Michigan - they are around US$0.18 per kWh (before taxes, connection fees, delivery fees, etc.) Allowing for the wounded Canadian dollar exchange rate, that's Cdn$0.20 per kWh. Well, the most expensive retail kWh in Ontario today is Cdn$0.135 - about 35% less than the price in Michigan. Of course, Michigan might be subsidizing corporate pricing to entice business, but apparently the PC platform is against such corporate welfare as well.

Time of use pricing in Ontario does not reflect demand periods. Year-round, 7 p.m. daily is the start of the lowest price period. However, most weekdays, 7 p.m. is in the band of the highest use. If we want to help lower electricity prices, let's get the pricing signal right. Start off-peak pricing when the demand is lower. While we're at it, let's create a new 'super-off-peak' rate from 1 to 5 a.m. daily, which is when, on some days, Ontario has to pay other jurisdictions to take electricity off our grid because we already have too much nuclear generating capacity for baseload demand. If we can get some Ontarians to move their electricity demand to this daily trough, we can save money for all Ontario taxpayers. I'd set my dishwasher to start at 2 a.m. instead of 7 p.m. to save a buck or so every day. The delay timer is built right into the machine, and I can figure out how to push it to save money. How about you?

The NDP want to take the HST off our electricity bills. Wow! How much will it cost Ontarians to renegotiate the federal/provincial HST deal (remember, we sacked all the old provincial sales tax folks to reduce public service headcount, and get a simpler no-exceptions system, which is why we now pay HST on books and services, where we did not pay PST before). Then, each electrical utility will have to change their billing system to not charge the HST, hire temporary staff to deal with all the issues that will arise during the phase-in period, and presumably Ontario taxpayers will have to absorb the lost provincial tax revenue and cough up money to the feds for the GST (5%) portion they will feel they are still entitled to receive. Beyond all that nonsense, this sends the wrong signal to ratepayers. If we want people to use less electricity, don't reduce the price because that reduces the incentive to make a change.

On a CBC radio phone in show, a woman said her annual electrical bill for a modest bungalow in southern Ontario is over $15,000 per year. This one leaves me flabbergasted! Seriously?!! Fifteen grand a year? I just paid my electricity bill for our 3-bedroom house with 5 full-time occupants. $118 for a month. That's typical of late. That's the entire bill, electricity, debt retirement charge, delivery, regulatory charges, HST, the whole smash. Multiply by 12 months, and I get $1,416 - or less than one-tenth of what the caller reported. But here's where it gets crazy; my electricity bill includes charging an electric car, an electric tractor, a cordless electric mower and runs multiple computers for my business. (We don't heat with electrity, house or water. For that we use a combination of solar and natural gas. Our natural gas charges for the past year were just over $600. Yes, that's for the year, not per month.)

If you are one of those people who are paying over $15,000 a year for electricity for a regular house in Ontario, please get in touch with me. For my regular consulting rate plus expenses, I will figure out how to save you a lot of money.

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The Hyperbole (er..Hydrogen) Economy
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