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Keeping Electricity Affordable and Improving Transparency


Keeping Electricity Affordable and Improving Transparency

Ontario's Government for the People is working to build a more transparent and accountable electricity system and to provide relief on electricity bills in a fiscally responsible manner. The government also plans to consult with industrial electricity users to help Ontario businesses compete and grow.

Improving transparency

The legislation would, if passed, replace the Fair Hydro Plan with a rate relief structure that would take advantage of significantly lower government borrowing costs, while increasing transparency. The proposal aims to improve accountability and align with the recommendations of the Auditor General and the Independent Financial Commission of Inquiry. The Financial Accountability Office of Ontario estimated that the Fair Hydro Plan added approximately $4 billion in borrowing costs for the people of Ontario.

The government is proposing to introduce a new on-bill rebate, effective November 1, 2019, which would replace the Fair Hydro Plan that hid the true costs of electricity from consumers. Starting November 2019, residential electricity customers will know the true cost of power and the new rebate will be clearly displayed as a single line item.

Stabilizing residential electricity bills

The government is also introducing regulatory amendments to keep electricity customers' bills stable. Increases to the average residential electricity bill would be held to the rate of inflation starting May 1, 2019.

These actions are part of the government's plan to increase transparency and accountability in the electricity system while working to make life more affordable for Ontarians.

Consulting with industry on electricity pricing

The government is committed to consulting with Ontario's industrial sector on electricity pricing to inform new policies to manage electricity costs and help Ontario businesses grow and compete.

The consultations will provide an opportunity for industrial stakeholders to provide input on the design and effectiveness of industrial electricity pricing programs and will begin in spring 2019. Details are expected to be released in the coming weeks.

Helping businesses with their electricity costs stimulates the economy, encourages job creation, and sends the clear message that Ontario is open for business.

Global Adjustment Refinancing

The government has introduced proposed legislative amendments to replace the existing Global Adjustment Refinancing structure part of the Fair Hydro Plan, effective November 1, 2019. To do this, the government proposes to amend the Ontario Fair Hydro Plan Act, 2017 in order to:

  • Require Ontario Power Generation (OPG) to continue to act as the Financial Services Manager on behalf of the Fair Hydro Trust
  • Prohibit the Financial Services Manager and the Fair Hydro Trust from incurring further debt
  • Provide that past transfers under the act continue to be valid
  • Provide protection to various parties from liability, including specified consumers and electricity vendors.

The intended result of these amendments would be that OPG would continue to manage the Fair Hydro Trust's existing debt as the Financial Services Manager until such funding obligations are repaid in full, and the government would provide the necessary funding to repay these funding obligations and associated interest as it comes due.

A separate but related regulatory amendment is proposed to Ontario Regulation 195/17 under the Ontario Fair Hydro Plan Act, 2017 to provide interim rate mitigation until the new structure is in place in November 2019. The regulation that currently governs invoicing requirements, O. Reg. 196/17, would also be revoked.

Expanding the Ontario Rebate for Electricity Consumers

The government has introduced proposed legislation to establish a new structure for electricity bill relief that would come into effect on November 1, 2019.

Under the proposed new structure, the full electricity cost including Global Adjustment would be shown on the electricity line of the bill. A new replacement for the reductions provided through the refinancing of the Global Adjustment and the current 8 per cent Ontario Rebate for Electricity Consumers would appear on bills as a single line-item rebate. The legislative changes required to enable this include:

  • Providing the Lieutenant Governor in Council with the authority to prescribe the amount of the new on-bill rebate
  • Providing the Minister of Energy, Northern Development and Mines with the authority to prescribe the eligibility criteria for the on-bill rebate.

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