Ottawa power rate leaps 9.7% with worse to come

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Ottawa power rate leaps 9.7% with worse to come

City utility gets nothing from increase imposed to cut Ontario Hydro debt

Ken Gray The Ottawa Citizen

Hydro customers in the nation's capital face a whopping 9.7-per-cent increase on their electricity bills to help service the $31-billion debt accrued by Ontario Hydro.

Ratepayers may soon face an increase on their bill of almost 13 per cent.

Ottawa Hydro intends to apply for rate increases of between 2.5 per cent and three per cent in each of the next three years. That's in addition to the 9.7 per cent hike that took effect June 1.

Hydro Ottawa President Ron Stewart is "frustrated" to have to pass on such an increase, especially since the utility he leads won't get a cent of it.

"It's frustrating because the hike is being attributed to us," Mr. Stewart said.

Some of Hydro Ottawa's 250,000 customers have called Mr. Stewart personally to complain about the rate increase.

Mr. Stewart can appreciate "it escalates people's costs" but is quick to point out that electricity prices had been frozen since 1993. He maintains an increase of 2.5 to three per cent is "modest" compared to other types of energy.

"Natural gas has more than doubled in the last year," Mr. Stewart said.

The three increases over three years are an effort by Hydro Ottawa to generate profit for its sole owner the City of Ottawa.

By next May, the Ontario market will open up to private competition and the city-owned utility will be forced to become self-sufficient, Mr. Stewart said.

He believes competition in the new open market may reduce the Hydro Ottawa increases over the next three years.

Retiree Irene Bascombe of Ottawa South pays $140 a month for electricity and doesn't like forking out another 10 per cent on her bill.

"This is forever," Ms. Bascombe said of that surcharge being used to pay down the enormous Ontario Hydro debt.

"The oil prices are going way up and now this," Ms. Bascombe said. "We're getting little taxes everywhere."

The 10-per-cent boost is collected by Ontario Power Generation, said OPG spokesman Ted Guetzner.

It, in turn, gives the money to the Ontario Electricity Financial Corporation, which handles the debt.

Mr. Guetzner said the Ontario government-mandated increase comes to about 0.7 cents per kilowatt hour.

Mr. Stewart predicts the electricity hikes will not have a big impact on businesses. "Heating costs don't compare to labour costs," he said, adding that the city doesn't have a lot of heavy industry requiring vast amounts of electricity.

Businesses, such as commercial real estate and individual consumers are likely to be hurt, Mr. Stewart said.

Ottawa Mayor Bob Chiarelli said Premier Mike Harris inherited the Ontario Hydro debt from former premiers Bill Davis, David Peterson and Bob Rae.

While Mr. Chiarelli said the Hydro debt could have been paid through savings from downloading responsibilities on the municipalities, he said the debt needed to be covered for the financial well-being of the province.

http://www.ottawacitizen.com/city/010822/660479.html

-- Martin Thompson (mthom1927@aol.com), August 23, 2001

Answers

I would think the natural gas crisis is over with for the time being. It used to be $10.00 per mmbtu and now its at $3.00. I can't believe they're still passing on rate increases.

-- Guy Daley (guydaley1@netzero.net), August 23, 2001.

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