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Hydro cost may boost tax bills

Kitchener Waterloo Record - November 9, 2002
by Jeff Outhit

There's more bad news for shocked residents digging deep into wallets to pay rising electricity bills.

Schools, hospitals and local governments say their hydro bills are also rising fast and that could lead to budget deficits. Ultimately, those deficits would be passed to taxpayers. Among the concerns:

  • Waterloo Region may have to find $350,000 to $700,000 more for electricity to treat drinking water, light streets and traffic signals, and power buildings.
  • The public school board worries it may face a $500,000 hydro deficit after paying hydro bills for its schools and buildings through next August.
  • St. Mary's Hospital is predicting a $73,500 hydro shortfall by April.
  • The City of Kitchener may end up $100,000 in the red after paying hydro costs for its buildings, arenas and facilities through December.

Hydro rates have jumped dramatically since Ontario opened its electricity market to competition in May.

Officials at public institutions hope the volatile rates will ease this winter. Some are counting on the province to extend rebates to ease the pain.

But the pain can't be ignored.

"(The hydro shortfall of) $73,500 could get us a couple of nurses," said Peter Sweeney, spokesman for St. Mary's Hospital in Kitchener.

"It is certainly a challenge. There is no doubt about it," said Ken Noonan, director of facilities management for Waterloo Region.

The Waterloo Region District School Board hopes to protect classrooms if it has to scour for extra cash to pay rising hydro costs.

"The last place you're going to try to take from is the classroom," said George Barnard, superintendent of business services. "So you're going to have to look administratively at other areas of your operation."

Some institutions are reviewing new ways to cut power use. They're also pondering whether to sign a long-term contract for a fixed rate.

That's what the City of Cambridge did. And it has paid off -- at least for the month of September.

Cambridge saved $42,000 in September by locking into a two-year contract at 4.6 cents per kilowatt hour. That's under the average price of 5.2 cents since May, but exceeds the price of 4.3 cents predicted before May.

There is a risk that Cambridge will end up paying more for hydro than others if rates fall, said city treasurer Frank Gowman. Then again, the city faces no budget surprises.

"It's like an insurance policy," he said.

"It's the security of having a fixed price for two years. That way, you know what you're going to be paying."

Grand River Hospital expects its hydro bill to rise by $200,000 this year and has budgeted for this increase.

Mike Voisin, director of public affairs, said it's too early to tell if more money will be needed.

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