12/07/04
Hydro plan proposes price break in winter

From Canadian Press

Ontario's new electricity price plan could offer consumers a price break in the winter when consumption rises with cold weather, says a draft plan released today by the Ontario Energy Board.

With instructions from the Ontario government to create a new regulated energy price plan by May 1, 2005, the energy board released its plan to seek public comment.

The plan suggests several options for how residential consumers could be charged for the electricity they use. But it doesn't include possible prices, which are expected to be laid out in the new year.

Under the current two-tiered rate system, consumers pay 4.7 cents per kilowatt-hour for the first 750 kilowatt-hours used. The price jumps to 5.5 cents per kilowatt-hour for any usage beyond that threshold.

One option is to have the threshold fluctuate with the winter and summer so consumers would be able to pay the lower rate for longer during the colder months when they use more energy.

In the summer, the threshold would decrease, meaning consumers would reach the lower-priced limit faster.

This kind of plan would help people who use electricity to heat their homes, said Bill Rupert, managing director of strategic planning and policy with the Ontario Energy Board.

While people in southern Ontario have easy access to natural gas heating, electric heat is used more often in northern Ontario, Rupert said.

Energy Minister Dwight Duncan said this is simply a draft plan, and wants to see how people respond to it.

But New Democrat Leader Howard Hampton called it a complicated, ``bureaucratic nightmare" that will mean higher electricity prices for consumers.

The new price plan will also bring in a smart meter plan to measure how much electricity is used at various times of the day.

The plan would have a peak, mid-peak and off-peak price to encourage people to use their major appliances during off-peak hours at night. Peak prices could be up to three times higher than off-peak prices.

The energy board is waiting for more information from the provincial government before it determines prices, Rupert said.

Under the new structure, consumers will pay a blended price made up of a fixed price for power from Ontario's nuclear and hydroelectric stations and a fluctuating price that factors in the competitive electricity market.

Consumers will pay a set price for the first year of the plan, and it will be evaluated and adjusted every six months.

The aim is to have a price that reflects the actual cost of electricity while also offering consumers price stability, Rupert said.