Hydro prices down but electricity bills going up

TORONTO - There will be another small drop in the price of electricity in Ontario next month, but the net result for homeowners will be an increase in their hydro bills.

The Ontario Energy Board announced a 3.3 per cent decrease in electricity prices Thursday for the six month period starting May 1, which follows a 5.8 per cent drop last November.

Prices for homeowners will be 5.3 cents per kilowatt hour for the first 600 kilowatt hours a month, and 6.2 cents for each kilowatt hour above that threshold.

But homeowners start paying the higher rate much earlier in the summer months compared with winter, when the lower price applies to the first 1,000 kilowatt hours used.

That means the "electricity'' line on the average consumer's hydro bill will jump by an average of $1.60, the board said.

The higher threshold is used in the summer months to encourage people to set their air conditioners at a higher temperature to reduce electricity demand.

Energy Minister Dwight Duncan said that even though electricity bills will be up from last winter, they will actually be down compared with last summer.

"When I get my bill at home, I look at January versus January and July versus July, and what you'll see if you do that comparison is that overall the rates are down five per cent,'' he told reporters.

Duncan said the regulated plan was designed to "smooth out'' electricity price fluctuations over six month periods to help protect consumers.

Small businesses and other non-residential electricity customers on the regulated price plan pay the higher electricity rate after 750 kilowatt hours.

The board said electricity prices in Ontario have decreased 8.8 per cent since May, 2006 primarily because of milder than expected weather throughout the fall and winter.

"There's a lot more supply on line now. There are decreases in demand and there were better weather conditions last year than in 2005,'' said Duncan.

"The good news is on the generation side, prices are lower now than they were in 2002.''

The board also announced Thursday that it had approved increases of two per cent or less in the distribution rate charges for electricity provided by 70 local utilities across Ontario, which shows up as the "delivery'' line on hydro bills.

Some people could actually see a minor decrease in their delivery charge, depending on which local utility distributes the electricity to their home or business, board spokeswoman Denise Harrington told reporters during a conference call.

For example, electricity consumers in Ottawa will see an increase of $1.46 a month in their delivery charge, while Toronto residents will see only a 35-cent hike in distribution rates.

NDP Leader Howard Hampton claimed the jump in distribution rates broke the Liberals' promise to freeze electricity prices, and said the government was trying to put the best possible face on it by claiming rates were down.

"What it is is another exercise in McGuinty government double-speak,'' Hampton charged in the legislature.

"The figure that matters is the one at the bottom of the hydro bill, and as a result of today's announcement, that number is going up.''

Duncan dismissed Hampton's claims as baseless.

The Ontario Energy Board is an independent body responsible for setting electricity rates, which Duncan said was created to "take the politics out of electricity pricing'' in Ontario.