Hydro prices have been going up and a new report warns they will only get higher. The Fraser Institute, an economic think tank, says that wind and solar power are too expensive for consumers.
“The global adjustment is a fund that is created every month to pay all these extra contracts that the province has signed with generators, especially renewables, who get guaranteed rates well above the market rate,” explained Ross McKitrick, author of the report.
“The province has said they want to expand renewables, basically triple the capacity over the next few years, and we’re saying if you do that you’re going to put us on a path to even higher electricity prices,” McKitrick said.
The report says the province needs to change direction away from renewable power. They suggest importing more electricity from Hydro Quebec, and to fire up idled coal plants, a controversial suggestion.
“They should re-start those, we get very low emission, high quality electricity at low cost from those plants," said McKitrick
High electricity costs could have a large economic impact in Ontario. Some business owners, like Bill Mechar of Integrated Packaging Films in Ayr, are thinking of moving south. Electricity costs in the US are less than a third of what they are in Ontario.
“There’s a huge cost savings. To us that could represent four to five hundred thousand dollars a year in savings alone on electricity," Mechar said.
The Fraser Institute report says what happens next depends on the provincial government.
“Here in Ontario electricity prices are going up, and that’s entirely driven by public policy decisions. So how high they go, really is going to be up to the cabinet,” McKitrick said.
