Energy minister explains why Sault not eligible for remote electricity discount

In town holding a round-table discussion with local municipal and business leaders, Ontario’s minister of energy says he hopes to get word out on initiatives the province has introduced to lower electricity costs for all Ontarians.

One measure in particular, a 20-percent discount on delivery charges for remote and rural customers, is not available to residents of Sault Ste. Marie.

Glenn Thibeault, provincial minister of Energy, said Sault Ste. Marie residents are not eligible because their rates are within the provincial average.

“What we are paying in Sudbury or in the Sault and in places like Thunder Bay in those urban centres — you have good utilities doing a good job of maintaining those rates,” said Thibeault.

The Rural or Remote Electricity Rate Protection program will be available to about 330,000 customers in rural Ontario and will result in about 20-percent in savings when combined with the 8-percent incentive all residential customers will be eligible for in 2017.

In 2013, a previous energy minister, Bob Chiarelli, suggested Ontarians control their own hydro costs by conserving energy, but last spring Ontario customers were met with a rise in hydro rates, which the Ontario Energy Board (OEB) attributed to lower energy usage over the mild winter.

Sault MPP David Orazietti said consumers should not be penalized for energy conservation efforts.

“(The OEB) certainly should not be justifying a rate increase based on the fact they believe there was too much conservation in the province, because that sends the wrong message. We certainly want to see consumers conserve, but we also want to see consumers rewarded for conserving,” said Orazietti.

Instead, the 72 local distribution companies across the province should look within for cost savings and efficiencies, said Orazietti, which may include further amalgamation.

Orazietti said it may be time to have a conversation about the effect the markups charged by those local for-profit distribution companies are used to offset municipal tax rates.

The effect of those markups, said Orazietti, is a higher cost of electricity.

He said about $2-million is being added to the local rate base from those markups.

“Your taxes are actually higher than what you are paying, and your energy costs are actually a fair bit lower than what you are paying. Your energy bill is helping to subsidize your property taxes and municipal services the city is providing,” said Orazietti.

During the round table discussion with local municipal and business leaders, Thibeault listened to concerns and used the meeting to communicate programs like the Industrial Conservative Initiative (ICI), which offers up to 34-percent reductions in energy bills to industrial customers using more than 1-megawatt of electricity per month.

Thibeault said the current 300 companies enrolled in the ICI program collectively conserved about 1,000 megawatts in 2015.

“That means we don’t need to build two more nuke units. That’s $15-billion in savings. When we conserve, that’s the best way we can save,” said Thibeault.

Today’s meeting offered Thibeault an opportunity to inform local leaders, including the Sault Ste. Marie Chamber of Commerce, about the discounted energy programs offered by the province.

“The chamber and Algoma Power are going to work together and create a package that they can get out to their members so they can find out about some of the programs we have on top of the 8-percent reduction,” said Thibeault.

Recently, the governor of Michigan asked electricity distributors in the state to draft up a feasibility study looking into tapping into the Ontario energy grid through Sault Ste. Marie.

Thibeault said he wrote a letter to the Governor Rick Snyder, offering to help look into the possibility of selling electricity to the Upper Peninsula through the Sault.

Orazietti said opening a new market by selling power to Michigan through the Sault could be a great opportunity.

Tom Vair, outgoing executive director of the Sault Ste. Marie Innovation Centre, recently told SooToday there has been issues adding additional renewable energy projects projects in the area because of the state of aging transmission lines to southern Ontario and that creating a corridor to sell electricity to Michigan could be a good opportunity.

Orazietti said there are similar cross-border transmission lines selling Ontario power to states like Minnesota and New York.

“We can’t be fixated on the fact that, regardless of where you are in Ontario, we can only work within our own province in terms of transmitting and distributing energy,” said Orazietti.

As for the sale of Ontario’s electric exports being sold at a loss, Thibeault said excess power needs to be sold and one must take a step back to put that into perspective.

“At the end of the year, when you look at the ledger it’s $230-million in net revenue that we take in and put back into the system to put lower pressure on rates for our customers right across the province,” said Thibeault.

He said today, between 7 and 9 a.m., the province required 15,000 megawatts of electricity but actually produced 17,000.

“We need to sell it. It needs to go somewhere. There is no place to inventory electricity, so we sell it to make sure it gets used,” said Thibealt.

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