Ontario hydro bills to rise despite end of Debt Retirement Charge
Energy Minister Bob Chiarelli. (Craig Robertson/Toronto Sun)
The typical Ontario residential hydro consumer can expect to see their bills leap by roughly $120 a year in 2016.
Energy Minister Bob Chiarelli announced Wednesday that his government will retire the Debt Retirement Charge (DRC) on hydro bills starting on Jan. 1, 2016, an annual savings of just under $70.
But at the same time, the government intends to bring an end to the Ontario Clean Energy Benefit (OCEB) which takes 10% off bills, adding about $180 to the average family’s hydro bill.
Chiarelli also announced a new program funded by ratepayers to help low income earners in the province with the cost of electricity — another $11 more a year on the average hydro bill.
The bottom line for a typical residential ratepayer is their hydro bill will rise by roughly $10 a month, exclusive of any increases in electricity prices.
“There are a number of things happening at the same time,” Chiarelli said.
While all the details of the new Ontario Electricity Support Program have yet to be worked out, Chiarelli said the intent of the program is to help families with an income of less than $40,000 pay for their electricity.
A low-income family can spend 8% of their income on electricity, compared to a family earning $100,000 or more who need dedicate only 2% of their take-home pay to their hydro bill.
“The program will provide ongoing support to eligible consumers directly on their electricity bills,” he said. “For a low-income family, the program could offer relief of 10% per month.
“This means that in addition to the DRC savings, an eligible family will save on average $180 per year and combined with removal of the DRC the savings would be $250 a year. This is real rate relief for those who need it most.”
Chiarelli said he expects that the dramatic increases in hydro prices will taper off by 2016, meaning less pressure on bills for average families.
The DRC, brought in to pay off leftover debt from the old Ontario Hydro, will continue on business hydro bills until the end of 2018.
NDP MPP Peter Tabuns said the provincial government has not changed the policies that have led to high hydro prices.
“The debt retirement charge ‚ in my opinion a day late, a dollar short,” he said.