News & Issues: Hydro
JULY
2010
LONDON HYDRO
In Dec. 2009, after concerns were raised about the rising cost of hydro, the Board of London Hydro requested Vinay Sharma, CEO make presentations to local Members of Provincial Parliament over concerns with electricity rates, smart meters and time of use rates. The Electricity Distributors Association has also been raising concerns with increasing costs of hydro. By legislation and regulation, London Hydro's role is restricted from any action on the matter of energy policy development. Of course compounding the cost of electricity rate increase is the introduction of the HST. While this will be a hit to all hydro users, it will also impact operating costs at city hall and our Boards and Commissions.
So what can council do about it? We can raise a stink over the increasing costs of hydro to Londoners with our M.P.P.'s We have done this on a number of occasions. Since London hydro users own the corporation we could tell the Board to not increase rates. I asked Vinay Sharma this question and he advised that prior to the increases, London Hydro bought power for about $300 million annually. A 17% increase amounts to $51 million. If London Hydro was asked to pay this increase, instead of consumers, Hydro's would be forced to go into bankruptcy. Customers and shareholders being the same people, you would benefit on the electricity costs, but at the same time bankrupt your corporation.
There is a bigger issue at stake that will have far reaching implications and reverberations. Local municipalities and institutions have no legislative power to make any policy decisions on nuclear, coal, or renewable generation of electricity. These cost increases are the reflection of our provincial energy policies. Recently the province removed municipalities ability to have any say in renewable electricity. By the way, given the subsidies to renewable power, the cost of electricity will unquestionably continue to rise year after year. It is anticipated this increase will stay around 5 % each year for the next 5 years.
This issue is important for all Londoners. While we own London Hydro the power to make changes in rates, and policies around electricity generation lies at the feet of our provincial government.