Tuesday, October 18, 2011

OEB Hikes Electricity Rate ... 41% In The Past 2 years.

Today the Ontario Energy Board (OEB) announced new electricity regulated price plan (RPP) rates for the coming winter. In the winter of 2009-2010, the Off-Peak Time-Of-Use Rate was 4.4 cents/kWh. It will be 6.2 cents/kWh for the winter of 2011-12, which is an increase of 41% over the past 2 years; the single-year increase is 21.6%.  In only 4 years the off-peak price, in winter, has doubled through consecutive annual, increases of 33%, 10%, 15.9%, and 21.6% (figures are here).

Is the OEB regulating electricity pricing or selling gas furnaces?

That might not be a fair question, but they sure aren't doing much on the electricity regulation front.

TOU rates were first introduced for the summer (May thru October) of 2006. I've run the data to compare the RPP rates against the average Hourly Ontario Energy Price (HOEP) of the TOU periods (using today's TOU hours). Up until 2008, the off-peak rates were set, essentially, at the expected market rate, and excess costs due to contracts, or party hats for the Ontario Power Authority (OPA), were recovered through higher mid, and on-peak, rates. But since the acceleration in the smart meter program, and the lure of 'savings' through shifting usage patterns, the price has been disproportionately raised in the off-peak periods. There are twin reasons for this, both of which a strong and effective regulator would oppose.  The one reason was feigning a break for customers by extending off-peak hours (to a rather silly 7 pm start), and the other is getting money where it is easiest to get – which is from residential consumers during the hours they are most likely at home. 

The rates, HOEP and RPP TOU, diverge in 2008 as enormous exports appear due to a supply glut coinciding with a demand downturn. That's notable today, because the OEB's release on their latest price hike states that the, “...main factors are increased nuclear and renewable generation coming online during the forecast period.”

No kiddin' ... the nuclear is at half the price of the wind, but forgetting that ... 
All new supply is contracted, so the regulator would be a good place to shut down further procurement of further oversupply.

The last time the OEB announced a rate hike, I wrote on the supply glut and noted the Ontario Clean Energy Benefit (OCEB) is not a break for families, but an additional tax burden that can only serve to break families.
Today the OEB said the rate hikes weren't rate hikes at all, because the OCEB was lowering your electricity bill (the release didn't note the OCEB portion goes on the tax bill instead).

The OEB release includes:

The Ontario Energy Board regulates the province’s electricity and natural gas sectors in the public interest. It envisions a viable and efficient energy sector with informed consumers served by responsive regulatory processes that are effective, fair and transparent.

Efficient energy sector?
Informed Consumers?
Responsive Regulatory Processes?
Effective, Fair ....?



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