An average 17% reduction in electricity bills this summer in Ontario is coming with a price tag of up to $1.4 billion a year in extra interest costs.
Those extra costs will ultimately come due for ratepayers in the future.
The Liberal government unveiled its plan Thursday to cut hydro bills, which are the biggest political issue it faces less than a year-and-a-half away from an election.
The across-the-board relief, which comes in addition to an 8% rebate that took effect January 1, is being achieved by refinancing already long-term power generation contracts over even longer terms.
Premier Kathleen Wynne said over time it will cost a bit more and will take longer to pay off. She likened power producer contracts that will be refinanced to a mortgage.
She added it is fairer because current ratepayers don’t have to shoulder the entire burden of huge system costs.
“They’re mortgaging our kids’ and grandkids’ futures with the mistakes they’ve made when it comes to these expensive electricity contracts they’ve signed,” said Hydro One Critic MPP Todd Smith. “It has resulted in billions and billions of dollars being added to the system.”
The Progressive Conservative Hastings and Prince Edward member explained ‘to make matters worse, the province plans to put more new Feed-in Tariff programs on the grid Friday.’
Several other measures were announced Thursday to give low-income, rural and northern residents additional savings, which will cost the government $2.5 billion over three years.
The delivery charge for on-reserve First Nations residential customers is being removed.
Rural ratepayers covered by some local utilities will see their distribution costs reduced.
(With files from The Canadian Press)