Ontario cottagers should expect a slight bump in their future electricity bills.
On November 1, the Ontario Energy Board (OEB) increased electricity prices for residents across the province by 29 per cent. The OEB adjusts electricity prices each November based on a forecast of how much it will cost to supply customers with electricity over the next 12 months.
To soften the blow, the Ontario government announced that it would increase its Ontario Electricity Rebate from 13.1 per cent to 23.5 per cent, absorbing some of customers’ costs.
Under the new rates, customers subscribed to the OEB’s Time-of-Use price plan will see off-peak hours jump from 7.6 cents to 9.8 cents per kilowatt hour (kWh); mid-peak from 12.2 cents to 15.7 cents per kWh; and on-peak from 15.8 cents to 20.3 cents per kWh.
Customers subscribed to the Ultra-Low Overnight price plan will see the ultra-low overnight rate jump from 2.8 cents to 3.9 cents per kilowatt hour; mid-peak from 12.2 cents to 15.7 cents per kilowatt hour; and on-peak from 28.4 cents to 39.1 cents per kilowatt hour.
Finally, customers who use a tiered plan will see the rate for the first 1,000 kilowatt hours jump from 9.3 cents to 12 cents per kilowatt hour, with every additional kilowatt hour costing 14.2 cents (previously 11 cents).
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The increase in electricity rates is largely due to the Ontario government’s plan to build four small modular nuclear reactors at the Darlington Nuclear Generating Station. Construction costs of the reactors are estimated to range between $21 and $26 billion, with the first reactor not expected to be operational until the end of 2030.
“Given the lack of any other investors, it remains far from clear how, other than through electricity ratepayers, the province and Ontario Power Generation propose to cover its remaining costs,” said Mark Winfield, a professor of environmental and urban change at York University, in a blog post.
During a debate in the Legislative Assembly, Mike Schreiner, the Ontario Green Party leader, also questioned Premier Doug Ford’s decision to invest in nuclear power, pointing out that renewables, such as wind, solar, and energy storage, are both faster and cheaper.
“As global investment in clean energy hits $2.2 trillion, the Premier is dragging us backwards,” he said.
Both Winfield and Schreiner pointed to the Ontario government’s decision to increase its electricity rebate as a way of hiding the rising costs of electricity from customers, especially since the rebate is funded by taxpayers and could cost them more in the long run.
“These are tax revenues that otherwise could be spent on core public services, like education and health care,” said Winfield.
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The government currently spends more than $6 billion per year to subsidize electricity rates. The Financial Accountability Office of Ontario, which published a report on the government’s electricity subsidy programs in 2022, estimated that between 2020 and 2040, these programs would cost the province $118 billion. The cost of electricity is also expected to outpace the subsidies, leaving only a nine per cent reduction in customers’ bills by 2040, compared to the current 23 per cent.
And this isn’t the only rate increase cottagers are grappling with. On January 1, 2023, Hydro One phased out its seasonal rate, shifting an estimated 78,000 Ontario cottagers onto either its urban density, medium density, or low density rates. Cottagers shifted to the new rates are seeing their electricity bills increase by as much as 10 per cent per year over the next eight years.
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