1. In a recent interview with our friends at CHML, and on the Bill Kelly show in particular, you stated that Hydro One has hired a new VP of customer service to deal with the fall out of high hydro bills. Part of what is planned is a redesign of the hydro bill, presumably to better explain it. However, you also stated that a significant part of the high hydro costs that we are seeing, and that will again increase in November, is due to the high labour costs associated with distribution and the associated output. The sense being, that we are not necessarily getting good value for our dollar in terms of its relationship to the money spent on labour. If that is true, does it not follow that Hydro One might be better served hiring someone who can performance manage the labour effort, consistent with comparative benchmarks as to what the value for the labour dollar ought to be? If so, why do you think this does not seem to be the emphasis.
The increase coming in November will be on the commodity portion of all household bills across the province, whether you are served by Hydro One or another distribution utility (like Horizon). Hydro One's first priority should be cost control. Bill presentation ought to be a minor concern.
2. What play, if any, does a labour relations environment have on the ability, will, capacity, to address value for money where the cost of labour is concerned?
Hydro One faces a very tough labour relations environment. It has inherited labour agreements that date back to the old Ontario Hydro with massive compensation levels, benefits and post-employment costs. Added to that, the government bought off the unions with H1 shares, which in my view creates a more conflicted situation for labour relations and further locks in existing excessive payroll costs.
3. People continue to make best efforts to conserve and yet we seem to be no further ahead. If we understood you correctly, you stated that there is a sum of money that hydro consumption must necessarily produce- likely in large part attributed to the labour costs discussed in the previous question. If that is true, does it not follow that conserving energy does not have an impact on the costs? We are not suggesting conservation is a bad thing, but can you explain why our conservation efforts are not yielding the reduction in hydro costs that we were led to believe?
The government has been selling a lot of snake oil labelled "conservation". Conservation is saving money, but the savings are almost all being captured by utilities in Michigan and New York. They are the ones taking Ontario's surplus power at a huge discount. The basic arithmetic driving rates is that the total amount of money that must be collected from consumers every year -- called the revenue requirement -- is rising while the amount of power sold is going down. The effect of conservation is to reallocate among different consumers responsibility for an increasing portion of the revenue requirement. The government has a costly program -- the Industrial Electricity Incentive -- whose purpose is to increase usage. Meanwhile, the government also has costly programs to decrease usage. The real purpose of conservation programs is that they are the government's marketing program to sell you higher power rates.
4. Despite the fact that everyone will be impacted by the rising costs of hydro, the less fortunate and the poor will likely be unable to sustain these increases. The cost to businesses may also cause businesses to pass on costs to customers, thus driving up products and services. Why does there seem to be such a disconnect between the reality of these impacts. How can anyone resort to redesigning a bill, when it is the amount of the bill that is the issue?
The government bought into the notion that their green initiatives would pay off with jobs and exports of equipment made by folks who once manufactured stuff like cars. Queen's Park lived in that bubble so long that the government was genuinely surprised to discover that rising rates were causing pain. The recent Throne Speech showed that the only solution the government could come up with was to shift costs between ratepayers and taxpayers. When the government realized that nobody was falling for this ploy, only then did they start addressing the real issues, canceling the ongoing procurement program that would have imposed even more useless wind and solar contracts on us. I think the bill redesign initiative arose from the same thinking behind the Throne Speech commitment to transfer costs to the tax base as a solution to the problem.
5. What advice might you have for the Ontario Government and municipalities in terms of dealing with the high cost of hydro?
- Cancel all the generation wind and solar contracts that we can escape from at low cost.
- Cancel the wasteful conservation programs. Rising rates are forcing consumers to conserve.
- Disclose the amount spent paying generators in Ontario to not generate.
6. What other information do you think the average person needs to know about why this is happening and what can be done about it?
If you feel confused by your power bill and what's behind it, some folks at Queen's Park are happy with that.
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