Break coming on peak hydro pricing – next spring

It’s cold comfort now, but running the air conditioner and other appliances will cost less starting next May when the Ontario government cuts evening power prices two hours earlier, at 7 p.m.

The change in rates for about one million Ontarians on smart meters and time-of-use pricing will be announced Tuesday by Energy Minister Brad Duguid as he sets out a new long-term energy plan, a senior government source told the Star.

It follows last week’s announcement from Premier Dalton McGuinty’s Liberals—under constant fire for rising hydro rates—that consumers will get a 10 per cent price break on their bills starting in January, about $153 for the average homeowner.

But the government source said it’s hard to say how much consumers will benefit from with the evening rate drop to off-peak prices, now at 5.1 cents per kilowatt hour—almost half the peak rate of 9.9 cents and well below the mid-peak rate of 8.1 cents.

“How much people could save depends on their energy patterns,” the source told the Star on Sunday.

“It’s a small adjustment but a meaningful one to families. Every little bit helps.”

While the move is intended to blunt opposition criticisms that families can’t always delay laundry, dishwashers and other electricity use to off-peak periods, which now run from 9 p.m. to 7 a.m. weekdays and on weekends and holidays, critics said the government is “scrambling” to appease recession-ravaged Ontarians before the provincial election next October 6.

“It seems to me every week goes by the government is shaking up the Etch-A-Sketch to come up with a new policy,” said New Democrat Leader Andrea Horwath.

“It’s more about adjusting the next election than adjusting electricity rates.”

The break on peak prices means nothing now to families paying top rates from 5 p.m. to 9 p.m. until the end of April, said Progressive Conservative energy critic John Yakabuski.

“It’ll be cold comfort for everyone coming home to cook supper and bathe the kids,” he told the Star.

“They are trying to pull any kind of a rabbit out of the hat,” he said of the government, which trailed the first-place Tories in a recent poll. “It is so obvious they are in full panic election mode.”

The government source said it “makes sense” to wait to change the off-peak times year-round until the next set of electricity prices come out for the six months starting May 1.

Under the winter rate structure in force until the end of April, consumers will pay peak rates from 7 a.m. to 11 a.m., mid-peak rates of 8.1 cents per kWh from 11 a.m. to 5 p.m. and peak again until 9 p.m.

Under the new system, for the summer period starting in May, mid-peak rates will apply from 7 a.m. to 11 a.m., peak rates until 5 p.m., and mid-peak until 7 p.m. when the much lower off-peak rate kicks in.

The 7 p.m. to 7 a.m. off-peak rate period will then remain year-round.

The time-of-use pricing is intended to encourage consumers to use more power in off-peak periods when it is cheaper and to ease demand at times of peak use.

Consumers not on time-of-use plans through smart meters pay 6.4 cents for their first 1,000 kilowatt hours monthly and 7.4 cents above that level.

Electricity prices have been rising as the government phases out heavily polluting coal-fired power plants and replaces them with natural gas, solar and wind power, with rates expected to jump another 3.6 per cent annually over the next five years after the 10 per cent price break is taken into account.