OFA: Province delivers on adjusting electricity distribution costsMarch 13, 2017 6:06am
By Keith Currie, President, Ontario Federation of Agriculture
Ontario farmers can finally expect some relief with lower electricity bills on the way. Beginning summer 2017, Ontario farmers and rural residents can expect lower costs and balanced customer delivery charges on electricity bills. The new relief plan was announced by the Ontario government early this month. The promise of lower energy costs comes as a result of constant pressure and advocacy efforts to make electricity more affordable and cut disproportionately high delivery costs in rural Ontario.
The newly reduced delivery cost will be in line with the average Ontario residential cost, thanks to the hard work of the Ontario Federation of Agriculture (OFA). The reduction will apply to medium and low density residential, farm, and small rural businesses – referred to as R1, R2, and GS customers.
Electricity is an important issue at OFA, with energy being one of the largest input costs on Ontario farms. OFA has pressed for lower distribution costs for several years, reminding the government that farmers and rural residents have been unfairly paying higher distribution costs than urban Ontarians. It creates energy poverty across our rural communities and disadvantages our farming businesses in a highly competitive domestic and global market. The recent electricity announcement illustrates Premier Wynne’s attempt to play fair, by evening out the distribution costs of an essential service for all to share equally.
According to the announcement, when combined with the 8% HST rebate, rural customers will all see the electricity cost reduced by 29%, and farmers could see delivery charges cut in half, depending on use and service type. This is good news for Ontario farmers and rural residents. The electricity bill relief will keep electricity rates at or below the rate of inflation over the next four years. By then, the Premier will have refinanced global adjustment costs over the longer life of generator assets and future contracts will be written at market price to keep electricity costs from ballooning again.
The cost of electricity has dampened our provincial agriculture and agri-food sector’s growth. Energy is one of the largest inputs on farms – with few fuel options – and it represents a significant cost to rural residents and local business owners. The Ontario government’s announcement to reduce electricity costs and provide short-term relief is promising. OFA is pleased the distribution costs have been evened out, directly reducing the delivery charges for our members and our neighbours.
We will continue to work with government to secure a sound and sustainable energy system for the future. OFA is working to deliver a distributed energy system that uses natural gas and enables our potential to develop the bio-gas industry. Our long-term energy policy must engage rural Ontario in the design of local energy systems, focused on Smart Grid efficiency, Distributed Energy Resources and microgrids to manage local distribution and load.
OFA will capitalize on the near-term relief from high electricity bills and work towards a secure energy future for our farming and rural businesses.