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How the BC Liberals Played Politics with BC Hydro

Article By By Richard McCandless, The Tyee

The Liberal government in Ontario is facing a major political crisis due to opposition to the rapid increase in electricity prices, which have jumped by about 70 per cent for peak consumption in the last five years.

The rising price of electricity in Ontario has been attributed to growth in fixed costs, longer-term lucrative contracts for private power suppliers, the cost of major capital expenditures, the move to green power generation and falling demand for electricity. Public concern about growing electricity rates forced the government to announce this month it would cut bills by an average of 17 per cent. Borrowing the money to cover the lost revenue will saddle taxpayers with $1.4 billion in interest payments annually.

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Electricity Costs Shock Vancouver Island Homeowners

Article By Katherine Dedyna, Victoria Times Colonist

The commission decided on Jan. 20 to phase out the E-Plus program because there is no longer surplus power in the system, and the rest of Hydro’s customers are subsidizing the lower rates.

The E-Plus discount was “supposed to last till we all died,” said Oak Bay resident Angus Matthews, 64, one of an estimated 5,000 E-Plus Hydro customers on the Island. There are about 7,500 E-Plus customers in B.C.

The program was started in 1987 by Jack Davis, the B.C. energy minister, to equalize heating costs on the Island and parts of B.C. that did not have access to natural gas, which was available in the Lower Mainland.

Natural gas did not arrive on the Island until 1992, so the E-Plus discount was based on what Lower Mainland customers paid for natural gas. Hydro required households to install backup heating systems, such as oil or propane, to qualify for E-Plus because the surplus electricity might be cut off if required by the system. The commission said E-Plus power has never been cut off.

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Energy Costs & Canadian Households

Energy is the basis of our modern lives. It fuels our economy, generating the economic production that underpins the high living standards Canadian households have achieved (McKitrick and Aliakbari, 2014; Epstein, 2014). Energy consumption also allows us to be connected across Canada’s vast land mass and heat our homes during the cold Canadian winters. These extensive energy needs require a level of affordability if we are to experience the full benefits of our modern lifestyles.

Energy costs have been rising steadily since the end of the twentieth century. Canadian energy prices included in the consumer price index (CPI) more than doubled over the two decades between 1994 and 2013 (Statistics Canada, 2015b). This increase exceeds growth in disposable income and the rate at which residential energy intensity is declining (Natural Resources Canada, 2015a; Statistics Canada, 2015d). Certain governments within Canada have also been pursuing policies—Ontario’s Green Energy Act is an example—that have been contributing to increases in prices for consumers (McKitrick and Adams, 2014). [1] Price increases force households to spend more on the energy they require, perhaps making them energy poor—a situation where a household spends more than 10% of its income on energy (Boardman, 2010; Lesser, 2015; Phimister, Vera-Toscano, and Roberts, 2015).

This publication (by Fraser Institute) seeks to determine how the energy expenditures of Canadian households have changed in recent years, and how they compare with total spending. We also calculate how many Canadian households are experiencing relatively high energy costs—how many are “energy poor”—and how energy poverty differs across income groups. The estimates in this paper are intended to be a starting point for broader research focusing on the impact of energy costs upon Canadians and policies that might increase those costs. It is first necessary, however, to examine how important energy is as a proportion of spending by Canadian households.