04/13/2006

The Province has announced the new Regulated Price Plan, a new Conservation Program, and two initiatives targeting energy costs for low-income families.
A) Regulated Price Plan:

The Ontario Energy Board (OEB) released new electricity commodity prices and distribution rates for utilities under the Board's Regulated Price Plan (RPP): these prices are reflected on the "Electricity" line of consumers' bills. The OEB envisions the RPP will “make sure that prices consumers pay for the electricity they use better reflect the prices paid to electricity generators, but without the volatility that exists in wholesale electricity market prices.”  

Starting May 1st, prices for RPP consumers who buy their electricity commodity from a utility will be 5.8 cents per kilowatt hour for electricity use up to a certain threshold per month (up from 5 cents) and 6.7 cents per kilowatt hour for consumption above that threshold (up from 5.5 cents). The threshold will remain at 750 kilowatt hours per month throughout the year.  

Municipalities qualify for the RPP as “designated consumers” under the “MUSH” sector, which also includes hospitals, schools, colleges and universities. This is expected to remain the case until April 1, 2008. The announced increase was due in part to increased electricity demand, lower than normal electricity output from hydroelectric plants, and higher than anticipated prices for natural gas.

For most consumers, the total impact of the RPP prices and distribution rates announced today will be in the range of 3% to 15% on their total bill.

Synopsis/Action:  

The Province decided in 2004 that consumers should pay the real costs of electricity.  There is broad consensus that paying artificially low prices that do not reflect the cost of supply gives no incentive for consumers, including municipalities, to conserve electricity. However, AMO has several concerns. We will be working with the Province to ensure it develops programs to assist municipalities with the capital costs of upgrading facilities, conducting retrofits, and installing software and meters to monitor energy consumption. In addition, we must collectively ensure such pricing programs do not adversely affect those on fixed and/or low-incomes in our communities.

B)  Every Kilowatt Counts:

Minister of Energy Donna Cansfield and Chief Energy Conservation Officer Peter Love recently announced a new conservation campaign entitled: "Every Kilowatt Counts". Thus far the campaign consists of incentives to replace inefficient central air conditioners with a new ENERGYSTAR® qualified system, a $75 rebate on the supply and installation of a programmable thermostat, and an educational program targeting consumers.

Synopsis/Action:  

AMO will push for an extension of incentive programs aimed at individual consumers to include the municipal sector where appropriate. 

C)  Low-Income Programs:

Finance Minister Dwight Duncan announced yesterday that the Province plans to introduce legislation that would, if passed, provide up to $120 per low-income family, to help them with rising electricity costs. Under the proposed Ontario Home Electricity Relief Program, single people would receive one-time payments of up to $60, while families would receive up to $120 to offset the projected average increase of $10 per month. Eligibility will be determined according to tax returns and funding will be allotted on a sliding scale — decreasing with income up until $35,000. The Ministry of Finance estimates that almost 1.5 million families would be eligible for this payment. If the legislation is proclaimed, relief payments will begin in the fall of 2006.

The Province has also announced that it intends to double the Emergency Energy Fund to help low-income Ontarians facing energy-related emergencies. This Fund, administered by the municipal sector, is aimed to help social assistance recipients and other low-income households pay for utility arrears, security deposits and reconnection costs for electricity, hydro, natural gas, oil and other forms of energy.

Synopsis/Action:

AMO is supportive of any initiative that includes provincial funding to support our most vulnerable citizens and believes that these announcements signify steps in the right direction. We will continue to push the Province to develop further supports for social housing providers, senior and long-term care facilities, as well as for the individual citizens who need financial assistance to both help deal with rising energy costs and to make the necessary improvements to help conserve energy. 

D)  Additional Actions:

AMO continues to advocate for provincial funding and other support for energy conservation measures. Furthermore, in addition to developing a bulk electricity-purchasing program to complement the existing GASAMO natural gas program, AMO also plans to develop additional educational and support materials for our member municipalities, including a one-day conference directed at municipal finance officers to be announced shortly.