Hydro costs are hurting Ontario’s economy: Ontario Chamber of Commerce
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Soaring electricity prices threaten to cripple businesses in the province, a new OCC report argues.
Soaring electricity prices in Ontario are causing more and more harm to businesses in the province, a new report by the Ontario Chamber of Commerce (OCC) warns, and the provincial government should take steps to curb these rising costs.
In a new 23-page report, the 60,000-member business lobby argues that the Ontario government should do whatever is necessary – including forcing homeowners to pay higher hydro bills to help relieve the burden.
“Rising electricity costs will continue to have an impact on employment and economic growth in the province,” said the study, entitled Empowering Ontario: Constraining Costs and Staying Competitive in the Electricity Market. “OCC survey results show that one in 20 businesses in the province expect to close their doors in the next five years due to rising electricity prices. In addition, 38 per cent will see their bottom line shrink, with the cost of electricity delaying or cancelling investment in the years to come.”
Current high prices are in marked contrast to how affordable hydro powered the province’s economy over the last century or so, the report noted. “In the past, the strength and reliability of the system and the low price of electricity contributed to the province’s competitive advantage,” the report said. “However, these days Ontario is no longer a low-cost electricity jurisdiction.”
According to the report, industrial electricity prices have risen 16 per cent since 2013 and are slated to climb 13 per cent higher over the next five years. The report argues that reduced hydro prices are necessary to keep businesses competitive, saying several pending government initiatives will join forces to create a tough economic climate in the province.
In addition to asking residential electricity consumers to pay more for their hydro costs as a means of keeping industrial electricity rates in check, the report also called for:
• Greater transparency in electricity pricing to allow consumers to better see what is driving costs.
• Local utilities allowed to more easily merge, creating efficiencies that could benefit all consumers.
• A competitive U.S.-style “capacity market” structure for financing new electricity generation rather than the current centralized model,
which would ensure supply increases with demand.
• Using the enormous amount of data collected from smart meters to shape energy and economic policy.