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Province delivers on adjusting electricity distribution costs (2017)

By Keith Currie, President, Ontario Federation of Agriculture

Ontario farmers can finally expect some relief with lower electricity bills on the way. Beginning summer 2017, Ontario farmers and rural residents can expect lower costs and balanced customer delivery charges on electricity bills. The new relief plan was announced by the Ontario government early this month. The promise of lower energy costs comes as a result of constant pressure and advocacy efforts to make electricity more affordable and cut disproportionately high delivery costs in rural Ontario.

The newly reduced delivery cost will be in line with the average Ontario residential cost, thanks to the hard work of the Ontario Federation of Agriculture (OFA). The reduction will apply to medium and low density residential, farm, and small rural businesses – referred to as R1, R2, and GS customers.

Electricity is an important issue at OFA, with energy being one of the largest input costs on Ontario farms. OFA has pressed for lower distribution costs for several years, reminding the government that farmers and rural residents have been unfairly paying higher distribution costs than urban Ontarians. It creates energy poverty across our rural communities and disadvantages our farming businesses in a highly competitive domestic and global market. The recent electricity announcement illustrates Premier Wynne’s attempt to play fair, by evening out the distribution costs of an essential service for all to share equally.

According to the announcement, when combined with the 8% HST rebate, rural customers will all see the electricity cost reduced by 29%, and farmers could see delivery charges cut in half, depending on use and service type. This is good news for Ontario farmers and rural residents. The electricity bill relief will keep electricity rates at or below the rate of inflation over the next four years. By then, the Premier will have refinanced global adjustment costs over the longer life of generator assets and future contracts will be written at market price to keep electricity costs from ballooning again.

The cost of electricity has dampened our provincial agriculture and agri-food sector’s growth. Energy is one of the largest inputs on farms – with few fuel options – and it represents a significant cost to rural residents and local business owners. The Ontario government’s announcement to reduce electricity costs and provide short-term relief is promising. OFA is pleased the distribution costs have been evened out, directly reducing the delivery charges for our members and our neighbours.

We will continue to work with government to secure a sound and sustainable energy system for the future. OFA is working to deliver a distributed energy system that uses natural gas and enables our potential to develop the bio-gas industry. Our long-term energy policy must engage rural Ontario in the design of local energy systems, focused on Smart Grid efficiency, Distributed Energy Resources and microgrids to manage local distribution and load.   

OFA will capitalize on the near-term relief from high electricity bills and work towards a secure energy future for our farming and rural businesses.

For more information, contact:

Keith Currie
President
Ontario Federation of Agriculture
705-441-3362

Neil Currie
General Manager
Ontario Federation of Agriculture
519-821-8883



Comments

Bev Hill says on March 10, 2017 at 5:18 PM

The cost of generating and delivering electricity has not been reduced.Reduced hydro bills will be a result of extending the amortization period of the debt. This billing reduction had nothing to do with OFA lobbying and everything to with the Liberal's desperate attempt for reelection. Tell it like is.The only way to reduce electricity costs is stop new and cancel existing wind and solar contracts that produce electricity that is surplus to Ontario's needs


Greg Foster says on March 10, 2017 at 11:16 PM

If our present provincial gov't was serious about treating rural residents and businesses fairly they would put in place a back payment program for all the years that they allowed HYDRO ONE to literally steal our hard earned $. I have to agree with Mr. HILL'S comments and in addition say to our OFA leadership step up in your discussions with this corrupt/lying government. I realize when you look at the provincial ridings across the province that they don't need the rural vote to win a majority in the legislature but we in the rural are important to this provinces health and well being!


Kim Hines says on March 11, 2017 at 12:31 PM

If this is a reduction WHY do we have to wait til the summer 2017? This government is just a scam it's unbelievable. I agree with Bev Hill this is just a re-election ploy and nothing more....


Dave Simser says on March 11, 2017 at 1:07 PM

I agree with the comment that solar farms and wind turbine contracts should be discontinued.However OFA along with opposition parties kept yelping at the heels of the Liberals to make them understand the devastating effect the high electricity costs were having on many companies and home owners .So do give credit to the voices of protest . They should be applauded !


Pete Bunnik says on March 11, 2017 at 10:42 PM

I agree with Bev, OFA had very little to do if anything in reducing hydro bills. It has all to do with the Liberals reelection campaign. Tell it like it is, not like a politician.


Marty White says on March 15, 2017 at 11:58 AM

Cathleen Winn & her band of liberal thieves are doing nothing to fix the real problems with Ontario hydro & OPG. There simply passing the problem on to future generations. I'm proud to be a member of OFA but I find it disturbing that they would applaud the liberals for such an obvious ploy to get votes.


Ontario Federation of Agriculture says on March 15, 2017 at 4:32 PM

OFA has been working on the problem of accelerating electricity and distribution costs for a number of years. We have provided significant input into the Long Term Energy Policy, which we continue to do and provided specific recommendations on electricity and distribution rates. This short term relief is a welcomed but small part of the bigger issue of securing a new energy system for Ontario as part of the Long Term Energy Plan. OFA is advocating for natural gas access for rural Ontario, enabling bio-gas industry development on farms and at landfills, effective use of combined heat and power opportunities, Distributed Energy Resources and effective use of a smart grid. We are working with our commodity partners to get relief on the carbon price impact on farm fuels. Our success on electricity and distribution costs cannot be denied, but we must now look ahead to a significant change in our energy system in the future to further ease the burden of (amortized) costs and ensure competitive farm businesses across Ontario.


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