Ontario Liberals using debt retirement charge as slush fund
Ontario smart meter. (Dave Abel/Toronto Sun files)
Let me see if I can walk you through the smoke and mirrors without choking.
Energy Minister Bob Chiarelli announced Wednesday the Debt Retirement Charge (DRC) will be dropped from your hydro bill Dec. 31, 2015.
Introduced in 2002, the DRC was intended to collect $7.8 billion towards the stranded debt left behind by the old Ontario Hydro.
In 2011, the auditor general reported that as of March of that year, $8.7 billion had been collected. So you’d think we could have had a mortgage-burning party back then.
But no, the Liberals continued to collect 0.7 cents a kilowatt hour on your hydro bill — only they slipped another $4 billion onto that, which they claim is “interest.”
Hello? Successive governments of all stripes mismanage the electricity system. They gouge cash out of your pockets to fix their mistakes — and have the nerve to charge YOU interest?
The DRC has become a giant slush fund to pay for other government programs — like Ornge, eHealth, gas plants, etc.
Now the Liberals have announced they’re going to drop that charge — after collecting another $1.5 billion of your money from now.
There’s a “but” in this — and it’s a big one: They’re also going to scrap the so-called Ontario Clean Energy Benefit (OCEB). That’s the 10% rebate you get on the first 3,000 kilowatts of electricity you use.
Are you following the bouncing ball so far? Drop a 0.7-cent-a-kWh charge. Add 10% benefit you’re losing.
Think of the number you first thought of — and try to figure it all out.
The government is replacing the OCEB all ratepayers receive with a new credit for low income earners. Chiarelli was sketchy on the details, but said people with a household income “somewhere between $25,000 and $40,000” will be eligible.
So people on social assistance and CPP are the only ones with a low enough income to qualify for that credit.
But everyone else’s hydro bill will go up 10%. But then down 0.7 cents a kWh.
Is your head spinning yet?
If bafflegab were an Olympic sport, Chiarelli would take the gold medal.
“There will still be increases in electricity rates moving forward, but we have increased very significant mitigation measures by the actions we’ve taken and also by these announcements today,” he told reporters.
I think what he means is that the massive hikes we’ve seen in hydro rates will start to level off — so you won’t notice this is all a big sleight of hand.
Few low-income people own their own homes and actually get a hydro bill. Many rent or live in social housing. Their hydro costs are hidden in their rent. How will they get a rebate, I asked him?
“You can appreciate there are very significant technical issues,” he said. Hmmm. Details, details.
Chiarelli also muddled the two issues of the stranded debt and the DRC. The original stranded debt of Ontario Hydro was around $19 billion. But the amount allocated to be paid down by the DRC was $7.8 billion.
Tory Leader Tim Hudak dismissed Chiarelli’s plan as pre-election posturing — noting that none of the Liberals’ pre-budget promises kicks in until 2015.
“Do you think they actually have the intention of delivering on them or are they just trying to skate through the next budget and buy the NDP support?” he asked.
Hudak says the debt’s been paid off.
“There was about a $9-billion debt to be paid down and hydro customers have already paid $12 billion towards it. That doesn’t sound like a good deal for taxpayers,” he told the Toronto Sun in an interview.
“I think the Liberals’ plan is to turn it into a permanent $1-billion grab on our hydro bills.”
Oh, come on now. A Liberal break a promise? Surely not.