Friday, February 11, 2011

Electricity power play just a cheap trick

Written for my Root Issues column in the Barrie Examiner, based partly on discussions Peter Bursztyn and I had on Tony Geurgis Live on Rogers TV.

Bad news came in my mailbox: electricity costs are going up. But the good news is electricity costs are going down. Confused? So am I! Apparently this is what passes for energy policy in an election year.

The truth is electricity will get more expensive. But the unspoken truth is that it’s been too cheap in the past. For decades, Liberal, NDP, and PC governments alike underpriced electricity to hold voter support. “Too cheap to meter” nuclear cost far more than was promised. Coal, the other “cheap” power source, creates huge health burdens, while smog reduces crop yields and farm income. Although these costs have not appeared on our electric bills, we still pay.

Our grid is aging and in need of expensive upgrades; old, dirty energy must be phased out and replaced with cleaner methods. That won’t be cheap.

Since electricity was underpriced before, it now seems even more expensive. And because the government sets the rate, we come to believe they decide the cost. But they don’t – the price of electricity is what it costs to build and maintain the grid, and to generate power. Government can influence these costs through long-term energy plans. Poor planning increases costs, and there is no fast way to reduce them.

But under pressure, most of our politicos avoid real solutions and instead offer cheap tricks. The PCs promise we can “opt out” of time-of-day pricing, even though electricity has real time price differences which must be paid. The NDP promise to take HST off energy bills. And now the Liberals are dropping your bill by 10% for the next 5 years. None of these “solutions” actually makes electricity cheaper, they are just shell games, moving the costs around. Ultimately, they make the system inefficient and unfair, as your other taxes pay for your neighbour’s wasteful practices.

Another political deception is pegging renewable energy as the culprit, based on high feed-in-tariff (FIT) rates. That’s a red herring; wind is only 2% of today’s electric supply, and solar almost none. FIT rates have negligible effect on your bills. The 2030 projection has wind at 10% of supply and solar a mere 1.5%, so even over 20 years FIT won’t be driving higher rates.

The worst choice, of course, is to build up more debt and make our children pay. The more we demand lower hydro bills today, the more costs we leave to future generations.

We, as a society, must make serious decisions about how to supply our energy needs, now and in future. And we must begin by acknowledging the real cost of electricity, and paying for it on our bill. Shell games or scapegoats will only make things worse. Demand better.

Erich Jacoby-Hawkins is an educator, father, volunteer, and politician.


  1. One of the problems is that both hydro and politicians, and for that matter most others on both sides of this debate, keep referring to the cost of electricity as 6.4c or in the case of TOD metering anywhere from 4.4c to 9.3c per Kwh. In actual fact the cost is well over double that with delivery, taxes and other costs included. Its not like we can go the the generating station and get a bucket of hydro at 6.4c, to keep saying that this is the cost of hydro is disingenuous to say the least. We do not give the cost of our food as the price the farmer gets why do we give the cost of hydro as the price at the power station 'gate'?

  2. I agree. Electric spikes on rates are not fully justified by the plant nor the private energy groups. It is always a matter of oxymoron reasonings.
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