Ontario announced today that, starting this summer; it will lower electricity bills by an average of 25 per cent for all residential customers as part of Ontario’s Fair Hydro Plan. These measures include the eight per cent rebate introduced in January this year.

Many small businesses and farms will also benefit from the initiative and people with low incomes and those living in eligible rural communities will receive even greater reductions to their electricity bills. In addition, on-reserve First Nations customers will receive a 100 per cent credit of the delivery line on their monthly electricity bills.

As part of this plan, rate increases over the next four years will be held to the rate of inflation for everyone.

Infrastructure Changes

The government cites two key reasons for recent rises in electricity rates

• Decades of under-investment in the electricity system by governments of all stripes resulted in the need to invest more than $50 billion in generation, transmission and distribution assets to ensure the system is clean and reliable
• The decision to eliminate Ontario’s use of coal and produce clean, renewable power, as well as policies put in place to provide targeted support to rural and low-income customers, have created additional costs.

The burden of financing these system improvements and funding key programs has fallen almost entirely on the shoulders of today’s ratepayers. To relieve that burden and share costs more fairly, the government is introducing two system fixes.

• The province will refinance those capital investments to ensure that system costs are more equitably distributed over time. In addition, a number of programs, such as the Ontario Electricity Support Program (OESP), will now be funded by the government instead of by ratepayers.
• The province will also launch a new Affordability Fund, enhance the existing OESP and Rural or Remote Rate Protection (RRRP) program and provide on-reserve First Nations households with a delivery credit. These new measures will cost the government up to $2.5 billion over the next three years.

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Manning Environmental Law is a Canadian law firm based in Toronto, Ontario. Our practice is focussed on environmental law, energy law and aboriginal law. 

Paul Manning is a certified specialist in environmental law. He has been named as one of the World’s Leading Environmental Lawyers by Who’s Who Legal: 2016.

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