Ontario Chamber of Commerce report takes a hard, sober look at electricity prices
Multiple choice. Please choose only one:
A) Ontario’s advertised electricity rate is one of the highest in North America.
B) Ontario industrial companies’ electricity bills are expected to rise 13 per cent in the next five years.
C) Rates for households and small businesses are predicted to climb by 25 per cent in the next five years.
D) All of the above.
If you chose D, then, sadly, you are correct.
Those were just a few of the facts that Ontario Chamber of Commerce (OCC) referenced in a report released this week that takes a hard, sobering look at Ontario’s rising electricity rates, and the effect those rising costs have on businesses and investment in Ontario.
Titled “Empowering Ontario: Constraining Costs and Staying Competitive in the Electricity Market,” the report’s conclusions come out of a year’s worth of consultations, surveys, and one-on-ones with the OCC’s 60,000 membership, sector experts, as well as government ministries and agencies.
According to survey results, the high price of electricity is undermining businesses’ capacity to grow and hire new workers. Moreover, “one in 20 businesses expect to close their doors in the next five years due to rising electricity prices,” and “38 per cent will see their bottom line shrink, with the cost of electricity delaying or cancelling investment in the years to come.”
No silver bullets
With multiple factors driving energy costs, there is no silver bullet, the report acknowledges, adding that there is only so much government can do.
There are, however, viable options that, when combined, will ensure Ontario’s electricity costs are competitive and “that the price of electricity enhances, not detracts from, our ability to compete globally and attract investment.”
The report examined 10 commonly cited solutions to rising electricity rates, and highlighted the five strongest:
- Increase transparency of electricity pricing and system cost drivers. (This is something that we at Bruce Power Direct have been working towards with documents like this and this. As the report’s authors state, the lack of transparency and subsequent lack of understanding has made it more difficult to pinpoint the exact drivers of cost increases.)
- Keep the Debt Retirement Charge (DRC) on residential bills until it has been retired.
- Incentivize voluntary consolidation of local distribution companies through multiple channels.
- Move away from a central procurement model to a more competitive capacity market structure.
- Unlock the power of smart meter data by capitalizing on meter data analytics at a province-wide level. The report recommends a province-wide Meter Data Management and Repository system that offers accessible and standardized meter data to utilities, customers, policy makers and third party analytics providers. (Here, too, is something Bruce Power Direct champions when working with our customers: capturing and measuring as much data as possible allows for more accurate forecasting and budgeting
Only time will tell if the Government of Ontario will move towards the report’s recommendations—and even if they do, we won’t be seeing lower rates overnight.
There are, however, ways of managing your electricity costs today. If you’re looking for some insight and advice, feel free to contact us anytime.
In the meantime, the full OCC report is well-worth your time. You can read and download it here.