By Brandy Harrison
STRATFORD — John McCallum has tried nearly everything to keep soaring electricity bills in check, from high-efficiency lighting and heat reclaiming units to fixed-rate contracts. With monthly bills as high as $5,000 at one point, the Stratford dairy farmer finally broke down and shelled out roughly $50,000 to install a wood-fired central boiler that kicked on in February.
“We’ve been suffering high electricity prices since I was a kid. Before it was just a part of doing business, but it’s getting to the point now where it’s become a huge problem,” says McCallum, who hopes to save at least $1,000 per month.
While he added a calf operation a year ago, McCallum’s electricity bills have gone from an average of $2,500 to $3,500 per month in two years. Last summer, they didn’t hear from Hydro One for months, only to receive a $15,000 bill all at once. “It was kind of a pain,” he says.
More than 10,000 complaints about Hydro One have been made to provincial ombudsman André Marin in the last two years about poor customer service and missing, incorrect, or large estimated bills. Marin will report late this spring.
In the last five years, per kilowatt hour electricity rates have increased an average of 8.9 per cent each year, averaged across all three price tiers on time-of-use pricing. The Ontario Energy Board reviews — and often increases — rates twice annually on May 1 and Nov. 1.
Energy Minister Bob Chiarelli recently indicated the province would review the difference between off-peak and peak rates. Environment commissioner Gord Miller favours jacking up peak rates as an incentive to shift power usage.
But electricity is only half — sometimes less — of the total bill, which also includes tax and delivery, regulatory, and debt retirement fees.
Last month, the energy board said it would start phasing in a change to fixed-rate distribution charges that would push up rates for 20 per cent of customers, with little change for the bulk of users. The board also approved Hydro One’s request for a three-year increase to delivery charges for its 1.4 million mostly rural customers, starting this spring.
But that’s not all. While the debt retirement charge is set to disappear from residential bills next January — businesses will keep paying until 2018 — the Clean Energy Benefit’s 10 per cent rebate is also on the chopping block. At the same time, most ratepayers will pick up the tab for the newly-announced Ontario Electricity Support Program to reduce bills for low-income households. The province pegs the annual increase at $120 per year for the average user.
Electricity prices have the attention of the Ontario Federation of Agriculture (OFA), which is lobbying the province for a return to farm and industrial electricity rates. The separate farm rate ended in 2011. The OFA suggested a 20 per cent rollback phased in over three years.
To cope, some farmers have cut down on labour and custom work or tried drying corn in the middle of the night, while others consider installing natural gas or propane generators.
Even with propane heat, John Koobs has watched his costs inch upwards, as much as 30 to 40 per cent in the last few years. “We’re looking at a 10 per cent or more increase every year for the foreseeable future, and I don’t think that’s sustainable,” says the Palmerston dairy farmer.
He’s installed higher-efficiency lighting and ventilation but it isn’t cheap. While most of his usage is at the lower price tier, Koobs admits it’s hard to avoid peak rates for all farm chores.
“There isn’t a whole lot we can do. We don’t mess with schedules. Cows don’t like it and most dairy farmers don’t either. We’re a very routine bunch.”