By Tom Collins
AVONMORE — Although Ontario residents are not as vocal about electricity prices as they once were, hydro is still a top-three issue (usually along with taxes and regulations) for many in farm country. And hydro rates could start getting worse in two years, one farmer warns.
The price of electricity spiked from 16 cents per kilowatt hour to 27 cents per kw/h in October 2016. Faced with a huge public outcry, the following summer the then-Liberal provincial government cut hydro bills by 17 per cent by refinancing $28 billion of loans. To keep costs down and voters happy, the government said electricity rates would rise at or below the rate of inflation for the next four years. Now halfway through those four years, that means consumers could start seeing larger increases in hydro bills in 2021, said Avonmore dairy farmer Jim Wert.
“That’s going to be a big factor, because basically we just deferred the debt,” he said. “And how that is addressed will have big, big implications. (Hydro isn’t) as contentious as it was before they put that (reduction) in place, but it certainly has the potential to become a much bigger problem.”
Wert estimated he spent roughly $30,000 to $40,000 a few years ago trying to bring his hydro bills under control, investing in variable speed drives for his feed mixers and installing LED lightbulbs. He estimated that he is saving about 30 per cent per bill on hydro costs from where it was at its peak three years ago.
While the Doug Ford government hasn’t announced any changes to hydro rates, Wert, also mayor for North Stormont Township, believed the provincial government is looking at how to handle increases in 2021 to ensure consumers aren’t in a worse place than they were before the reductions.
Most farmers are on general service rates, which are higher than residential rates. Farms and elevators that use more than 50 kilowatts during one hour at any point in a month get billed on delivery as though they were at their highest hourly power consumption the entire month.
Kevin Wilson of Wilson Elevators at Vankleek Hill has had his run-ins with Hydro One representatives. Last year, Hydro One called and told him that if he didn’t reduce his usage, his rates next year would go up 30 to 45 per cent.
Now, when meeting with growers about contract prices, he’s encouraging farmers to look at profit per acre instead of price per tonne. However, profit per acre entails figuring out costs line by line.
To figure the hydro costs, “the exact answer is you might as well increase it 5 to 15 per cent every year going forward, because you know that’s what you’re going to end up paying,” said Wilson. “It’s definitely a major issue to (farmers), no doubt about it.”
Wilson said Ontario hydro isn’t willing to negotiate for something that is a necessity for Ontario agriculture.
“You can yell and scream all you want, but Ontario hydro doesn’t care,” he said.
Rob MacDonald, president of the Glengarry Federation of Agriculture, said electricity costs are still a top three issue for farmers, even if the griping isn’t as pronounced as it once was.
“Hydro is still a major deal,” he said. “It hasn’t gone away.”