On Hydro Rates

I wrote this column for the Kitchener Post back on March 7, 2017. It remains pretty relevant today…

A lot of blame to go around on hydro file

OPINION Mar 07, 2017 by James Bow Kitchener Post

Sometimes, politicians just can’t win. We elect them to make tough decisions, but when tough decisions get made, we reward them with unpopularity and electoral defeat.

Too often, politicians are enticed to make decisions that are popular, but are bad for the public over the long term, leaving future politicians to deal with the unpopular fallout.

Nowhere is this clearer than in the debate over Ontario’s rising electricity rates. Currently, Ontarians are mad as hell over the high cost of electricity in this province. The target of their anger has been premier Kathleen Wynne, as Conservative and New Democrat critics harangue her as the culprit for different reasons.

The Conservatives claim that the Liberals paid too much for green energy initiatives and locked in deals for years that pushed our rates up. The New Democrats blame privatization and power companies putting profit above public interest.

There is a lot of blame that should be laid at the Liberals’ door, but the fact is all three parties have made good and bad decisions, as well as popular and unpopular decisions, regarding our electrical network. They all share the blame for our current situation.

In the eighties, the Ontario Conservatives of Bill Davies and the Liberals of David Petersen spent billions investing in nuclear power plants but refused to pay up front for the construction. Plants like Darlington were built entirely on credit during a period of high interest rates. This move significantly increased the debt Ontarians are still paying off.

The New Democrats under Bob Rae tried freezing rising power rates, only to have power companies refuse to invest in new and better power production. The Conservatives under Mike Harris tried privatizing parts of the electrical grid and found that exposing Ontarians to market forces meant rapidly raising rates.

The Liberals under Dalton McGuinty inherited a power grid that was struggling to keep the lights on, as seen by the power blackout that darkened Ontario and several American states in August 2003.

The current Liberals have made our power grid cleaner and more robust, but did so by securing public-private partnerships by guaranteeing profitable rates over the next several years.

The Liberals also made bad decisions for their own political benefit, such as shutting down unpopular power plants as they were under construction at the cost of billions in penalties.

And now, to deal with the mounting backlash against high electricity rates, Premier Kathleen Wynne announced plans to refinance Ontario’s debts associated with our electrical grid. By lowering payments on the debt, our rates may drop as much as 25 per cent, but we’ll be paying those interest payments for years longer, meaning we will be paying billions more than we should.

As our governments scramble, our opposition spins the issue in the most partisan way possible. They exaggerate the impact Ontario’s green energy initiatives have had on Ontario’s debt problem. Some even suggest we spend more on nuclear — the power source that put us in this debt in the first place.

In this haze of blame and liability, is it any wonder that Ontarians are confused, frustrated and looking to blame the one in charge?

But this doesn’t solve the long-term issues we are dealing with. If we want to have an honest debate about high electricity rates, all parties should admit their share of their culpability and offer criticism and suggestions for the benefit of Ontarians, rather than their own partisan interest.

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