Brace for nasty shock

A soaring hydro bill raises grave doubts about privatization

Toronto Sun - April 7, 2002
By Linda Leatherdale

Feeling raped and left to suffer a slow burn in the dark? I do, after paying my last Oakville Hydro bill.

And I now know there is no common sense left at Queen's Park, where politicians have come up with new ways to fleece our pockets after the departing Mike Harris freed Ontarians from the burden of record high taxes.

I also now know why Harris was dragging his heels on electricity deregulation, because he may be the only politician who gets it: "There is only one level of taxpayer -- you," he wrote in his Common Sense Revolution, in which he declared a five-year freeze on Hydro rates, "to give consumers, employers and industries guaranteed stability in planning their budgets."

He also promised that even though Ontario Hydro (now Hydro One) would be reformed -- "including some moves towards privatization of non-nuclear assets" -- his Tories vowed to "bring Hydro back to its proper role of providing reliable and affordable electrical power to Ontario."

Well, Mike, tell me what's affordable about this.

RARELY AT HOME

This week, I wrote out a cheque for $616.34 to Oakville Hydro to cover my home's electrical and water usage from Dec. 21, 2001, to Feb. 27, 2002. I gasped. My last bill was $439.27, so I called to ask what gives.

"It's your usage, it's up," I was told. I agreed Christmas lighting can do that. But how could usage have skyrocketed that much, when my family has been spending weeks at Sick Kid's Hospital, where my daughter is a cancer patient?

So I looked up an old bill that covered the peak Christmas season in 1998. Back then, I only paid $437.25 for usage from Dec. 18, 1997, to Feb. 20, 1998. That's a whopping 40.31% increase. Believe me, my paycheque has not jumped 40.31%.

Let's get real. Electricity and water are basic necessities, not a luxury. So is heating my home in this winter wonderland.

And if I can't pay my bills, believe me, the lights will go out, and my family will freeze in the dark.

This not only hurts consumers, who account for two-thirds of this province's wealth and health, but it devastates the budgets of hospitals, small businesses, manufacturers, schools, etc.

Now here's what burns me. Effective March 1, I got hit with another 6.26% increase, which shows up on my next bill, thanks to the Ontario Energy Board (OEB).

And isn't this comforting? Collecting a $122,627.84 paycheque as OEB chairman is none other but "Pink Floyd" Laughren, the former NDP treasurer who hit us with 32 new and hiked taxes, to send Ontario's top income rate to a record 53.19%, while our net debt doubled to $96.5 billion.

So is it any wonder we've been hit with a number of energy rate increases over the past few years, which stinks of a setup for May 1, when the floodgates of deregulation open wide.

Sure, busting up a government-run monopoly and opening electricity to competition should reduce rates. And yes, consumers should feel some comfort that new independent energy retailers are allowing us to lock in electricity rates, much like we lock in a mortgage rate to sleep at nights.

But why then are we in such chaos?

And why is there such a blackout on information from Queen's Park, where leaders have failed protect consumers?

SPOT PRICE HORROR

Read on and weep.

Dofasco president John Mayberry warns electricity rates will jump 30% to 40% after May 1, which will cost the steelmaker between $20 million and $40 million.

Oshawa-based En-Pro International warns some consumers, those who use more than 1,000 kilowatts, will face an added cost of up $2,000 for new interval meters.

En-Pro also warns that, effective May 1, we will start paying Ontario Power Pool hourly spot clearing prices.

"A pure spot arrangement as what Ontario consumers will be facing can be costly, especially during times of peak demand," warns En-Pro. Last year, the peak hit during a heat wave in August, which sent spot prices through the roof.

NDP Leader Howard Hampton warns rates will jump 20% now, and maybe as much as 100%, after Hydro One builds more lines to the U.S., where Ontario's private generators will export our electricity to make sweet profits on consumers in many states who already pay twice as much as we do.

Free trade, Hampton says, forbids any protection, even though Ontario taxpayers own this resource.

Energy consultant Michael Morrison, director of Canadian Energy Solutions at Fujitsu Consulting, claims with prices now fluctuating on an open market, sooner or later competition will mean lower rates. But he couldn't say when.

As for selling us down the river to the U.S., Morrison claims the new Independent Electricity Market Operator, which oversees the wholesale market, will protect us.

Yeah, right! Just like the OEB, which employs only eight operators and four inspectors to police more than one million electricity contracts signed by unsuspecting consumers, protects us from scuzzy door-to-door sales reps.

Here at the Sun, a colleague complained her elderly dad, whose hand was in a cast, was coerced into signing a Toronto Hydro Energy Services contract he didn't understand.

"And look, the signed date is in March, yet the fine print says the contract expired on Jan. 31, 2002," she said.

The NDP and Liberals are demanding that Energy Minister Jim Wilson declare a "state of amnesty" on signed contracts, which they claim are misleading and lock in rates 30% higher than today's rates. They also want standardized contracts that break out all costs, plus stiff fines for firms guilty of unfair practices.

BURNED WITH DEBT

"The provincial government is ripping off its own citizens," said Mike Colle, Liberal consumer protection critic.

But here's the biggest ripoff of all.

After taxpayers paid handsomely to build our Hydro infrastructure, not only is Queen's Park selling off many of the assets, but we're getting hit with a new tax to help get rid of Ontario's Hydro debt, which hit $38 billion. The debt-plagued utility was split into Hydro One and Ontario Power Generation in 1999.

Did you know Ontario Hydro, while studying privatization, paid seven U.S. consultants a whopping $3 million US, including lifetime pensions worth $2,000 to $14,000 a year?

One, Carl Andognini, became the highest paid civil servant in Ontario history, earning $702,000 US a year, plus a $200,000 recruitment bonus, a car and driver, moving expenses, a guarantee that Ontario Hydro would pay $15,000 more than his house is worth when he left, a $1-million life insurance plan, a 8% pay hike and a $12,500-a-month lifetime annuity after four years with Hydro.

No wonder the Tories have now blocked Hydro salaries from the Public Sector Salary Disclosure Act.

Opposition critics also argue Hydro One is now being auctioned off at bargain basement prices. The Tories hope to net $10 billion to $12 billion, and promise us proceeds from the sale will go toward Hydro debt.

Hey, we were also told the $3.1 billion from the sale of the 407 would go towards Ontario's net debt, now at a record $111 billion.

Meanwhile, new Premier Ernie Eves' former employer -- Credit Suisse First Boston Canada Inc. -- stands to make $3 million from the Hydro One IPO (initial public offering).

I'd like to know if Ontario taxpayers will get share options.

Visit the Toronto Sun newspaper today
social justice Toronto apartments for rent