TORONTO -- Electricity bills for most Ontario households will increase an average of $137 next year because of changes to Liberal government programs, but there will be a new rebate plan for low-income families.

Starting Jan. 1, the 10 per cent rebate on all hydro bills -- the so-called clean energy benefit which averages about $17 a month -- will end. The increase will be partially offset because the debt retirement charge of roughly $5.60 a month, which was used to pay off stranded debt from old nuclear programs, will also come off bills.

Energy Minister Bob Chiarelli announced an electricity rebate program Thursday that would offer $20 to $50 a month for some families, which will add about 70 cents a month to hydro bills for all other customers.

"For many low-income Ontarians, paying their monthly electricity bill is a real challenge," said Chiarelli. "Families should not have to choose between turning on the lights and putting food on the table."

The sliding scale of hydro rebates will depend on the size of a family as well as its income level. A seven-member family must have an income of less than $28,000 to qualify for the maximum $50 monthly rebate.

The NDP said electricity rates in Ontario have soared by 325 per cent since 2002, and are expected to climb another 40 per cent in the next few years.

NDP Leader Andrea Horwath said bills will go up for everyone, including low-income residents, because the 10 per cent discounts are being discontinued and because the Liberals plan to privatize part of Hydro One, including its local distribution business.

"These things are going to cause rates to go up, not down," insisted Horwath. "The government is playing a game here, and I don't think the people of Ontario are going to buy it."

The Tories said the Liberals' subsidies to wind and solar power producers, budget overruns on the smart-meter program and the $1 billion "wasted" on cancelled gas plants are sending hydro bills up for everyone.

"The government has to make some real changes in their energy policy," said Progressive Conservative energy critic John Yakabuski. "These little baubles that they put out from time to time to change the channel are not fundamentally fixing the problem, and that is the energy policy of this government that has driven prices beyond the reach of most people."

Chiarelli said electricity rates are rising in every jurisdiction across North America, and Ontario's prices were driven up in large part by the Liberals' move to stop burning coal to generate electricity. Rate increases should drop to a little over two per cent a year once the cost of getting out of coal and upgrading the system have been covered, he added.

"It's like a snake swallowing a rabbit: the costs of that are going through the system," Chiarelli told reporters. "They will be significantly mitigated over the next two to three years and it'll be back to normal increases."