Communication, Politics, Money: Wynne's electricity/electoral strategy

The Premier of Ontario launched a campaign advertising her concern about the impact of high electricity rates in proroguing the legislature, which allowed for a New Speech from the Throne setting government priorities. The speech announced a new policy for residential electricity consumers, re-implementing an old policy but providing an excuse to discuss the communication strategies impacting the electricity narrative in Ontario - among the political parties, and allegedly public servants.

A brief reverse timeline on tax policies and electricity in Ontario:

• September 12, 2016 the Wynne government announces the provincial portion of the Harmonized Sales Tax (HST) will be rebated on residential and small business consumer bills as of January 1, 2017;
• January 1, 2015 the Wynne government removes the Ontario Clean Energy Benefit (OCEB) that deducted 10% of residential electricity bills
• January 1, 2011 the McGuinty government (same party) introduced the OCEB
• July 1, 2010 the McGuinty government adds 8% to residential electricity bills when the Provincial and Federal sales taxes are harmonized as the HST

Let's not pretend that today's announcement is creative or terribly meaningful, but uncover the limitations that prevent the Premier from doing something meaningful to control costs - or allow her to let rates rise higher.

David Herle is an influential political strategist notable for co-chairing the Premier's successful 2014 election campaign. In February (2016) Mr. Hearle delivered a presentation to the Canadian Nuclear Association (CNA). The first point Mr. Hearle had on his slides was:

Rates are an increasingly major concern in Ontario. The cost of electricity is not just seen to be unreasonably high, it is widely seen as damaging to the provincial economy. 

• Slowing rate increases is critical. 
• Electricity is a necessity not a luxury.

A conservative strategist, Nick Kouvalis delivered a similar presentation to the Ontario Energy Association in the fall of 2015. That presentation also showed survey results indicating economy and jobs topped concerns, with energy prices not far behind.

Mr. Hearle noted some characteristics of public opinion that now drive Ontario Liberal Party public speaking on electricity. People like:

• the elimination of coal
• improved reliability
• conservation
• renewable energy (many remain positive on industrial wind - and most on solar)

Hearle, it seems to me, indicates a communication strategy that recognizes people don't want to blame cost hikes on things they like, and therefore Liberal policy is to challenge people to associate increased rates to the achievement of outcomes they desired - specifically coal's elimination in the generation of electricity, and alleged improvement to system reliability.1

Ontario's new electricity pricing program essentially taxes businesses to fund social program

The news of an electricity program leaked out Tuesday night: by Friday even the press most favourable to the government was aware that the government was gaming somebody. The news during the week noted program including the OCEB, OESP and DRC (I'll get to each), but didn't pay much attention to an equal number of customer classes, each of which is impacted differently by changes the government is making. Confusion continues to be built as new and changed programs continue to be introduced to counter the impact of other new and changed programs. In the end the sleight of hand this week disguised charges to businesses via their electricity bill to fund a government's social program.

The press release on the new program included:

Government graphic for new program - and old

Ontario is helping make electricity more affordable for families by removing the Debt Retirement Charge for all residential consumers and introducing the Ontario Electricity Support Program for low-income families.
The proposed program, administered through the Ontario Energy Board, would come into effect on January 1, 2016...
Qualifying individuals could be eligible for a $20 to $50 monthly credit based on the size of the household and income.
...
The proposed Ontario Energy Support Program would be ratepayer funded with an estimated charge of less than one dollar a month for a typical residential customer in 2016.

New program, new acronym: OESP.

New spin, old problem: honesty. While the OESP may be partially funded by "an estimated charge of less than one dollar a month for a typical residential customer," those types of ratepayers will be paying only a fraction of the full program cost

GA'd Awful: Duncan Must Go

"Aren't you impressed to see so many people gather to hear you speak?" ... "No – because ten times as many would come to see me hanged."

Dwight Duncan at The empire Club, April 15, 2004

"Nobody wants to create reliability problems, last of all us. I know who hangs on the lamp pole first."

Wall Street Journal Article/Interview with John Rowe, CEO of Exelon, October 22, 2011

If affordability problems are seen as reliability problems, Ontarians should be annoyed by the manner in which NDP Leader Andrea Horwath gives the Liberal government rope.

Parkinson's Law and the Innumerate Mr. Miller

Elements of Parkinson's Law:

• Work Expands so as to fill the time available for its completion
• An official wants to multiply subordinates, not rivals
• Officials make work for each other.

Gord Miller was in the press yesterday, a lot, following the release of Managing a Complex Energy System: Annual Energy conservation Progress Report -2010 (Volume One), with most of the attention going to his description of the Ontario Clean Energy Benefit (OCEB) as “a perverse incentive that undermines conservation efforts.” Mr. Miller's report continued “One estimate of its effect is to increase overall electricity consumption by more than one per cent. This would negate about one-third of the savings that conservation programs are expected to provide between 2011 and 2014.” I'll return to Mr. Miller's interesting use of statistics shortly, but first ...

The Current and Future State of Electricity, as the OCEB comes to Ontario

Big news yesterday as the Finance Minister Duncan announced the Ontario Clean Energy Benefit (OCEB), which will bestow a credit of 10% of our bill upon us. The release by the government indicated the move to cleaner energy has been expensive, and would be so for another 5 years, so this should alleviate some of the pain being felt due to this noble endeavor; "Over the next five years, residential electricity prices are expected to rise by 46 per cent, after which price increases are expected to moderate as Ontario will have largely completed the transition to a cleaner, more reliable system."

I'm skeptical. Somebody said if you want to know where you are going, you need to know where you are, and where you've been. Seems like a good time for a big picture overview, a review of the current price drivers on the consumer side, on the industrial side, and to take stock in whether the government has any credibility in implying there is a planned destination, and a plan for arriving at it, in 5 years time.