Ontario hydro bills to increase in 2016, experts say

Residential electricity usersinOntarioare set to pay more for powerin 2016 due tochanges that take effect with theflipping of the calendar, according to one energy consultant.

"You can take a look at your electricity bill today," said Tom Adams as 2015 drawsto a close, "and these are the good old days."

He estimated bills will go up from to six to seven per cent for power consumed startingJan. 1. That would beon the heels oftime-of-userate hikes that took place Nov. 1, and ahead ofmore rate hikesplanned for May 1, 2016.

The energy minister has said he'sfocusedon slowing the rate at which thecost of electricity is increasing.A statement from Bob Chiarelli's office insisted bills are increasing more slowlythan in neighbouring jurisdictions.

End of debt charge, clean energy rebate

After Dec. 31, 2015, the debt retirementcharge comes off residential electricitybills, although other users such as those in businessand industry will continue to pay down the debt incurred bythe former Ontario Hydro through at least 2018.

On the same day, the province's clean energy benefit expires. It was introduced in 2011and has meanta 10-per-cent rebate on electricity bills.

The two changes do not offset one another, so people will end up paying more for electricityconsumed in 2016, said Adams, who estimated the clean energy rebate has typically beendouble to triple the charge homes paid against the Ontario Hydro debt.

To help those with a low incomedeal with the loss of that 10-per-centrebate, the province will begintheOntario Electricity Support Program starting Jan. 1.

As of late December, people who could be eligible hadbeen slow to apply to that program.

Seven weeks in,the Ontario Energy Board said 19 per cent of the 500,000 users it targeted had applied, which Brian Hewson, itssenior manager of strategic policy,called "an excellent response to a program that has been open for such a short period of time."

All electricity ratepayersare being charged$0.0011 per kilowatt-hour to pay for the new credits for those onlow incomes.

Province phasing in fixed distribution rates

The hydro bill becomes further complicated, Adams said, as Ontario moves toward a system where every home pays the same,fixed distribution rate.

Starting Jan. 1, the amount ofelectricitya household consumes will count less and less toward what it's charged for usingthe grid.

"The network of poles and wires that are used in your community really don'tvary much in cost depending on how much you use them,"said Hewson of the Ontario Energy Board.

As more Ontarians installsolar panels and other technologies, for instance, Hewson said theiruse of the grid shouldn't be subsidized by others, who currently pay more for distribution because they use more.

Adams argued that change means a single-bedroom condo that uses very little energywill end up seeing an increase on their billsanda large, single home with many residents will see a decrease.

But large users of electricity will still paymore overall, saidHewson, who said it makes more sense for consumers to focus on thetime-of-use line on theirelectricity bill because that's where they can consider how they can conserve power.

The energy minister's office said that a fixed charge will help companies "recover distribution costs" and"remove the disincentive utilities have to encourage customers to conserve."

For the one in five electricity users that will see their bills go upbecause of a move to fixed rates, Chiarelli's office said it will be limited to a hike of 4 per cent per year.