Some relief for businesses on energy bills

The provincial government hit the reboot button with a speech from the throne earlier this week.  

The Ontario Government again identified jobs and growth as their top priority. They also confirmed that next year’s budget will be balanced, delivering on the Government’s promise to eliminate the deficit by 2017-18. Previously announced investments in childcare, tuition reduction, skills training, and healthcare, were echoed, as were investments in the Business Growth Initiative, Jobs and Prosperity Fund, and the Climate Change Action Plan.

However, the area that received the most attention was electricity pricing and lowering bills.  This is good news for businesses in two categories: 

  1. Those, mostly in Rate Class B, that were unable to take advantage of the Industrial Conservation Initiative (ICI) because they did not qualify; and
  2. Those businesses on time of use pricing such as retail and restaurants.

The announcement of the expanded ICI is the culmination of significant advocacy from the Ontario Chamber of Commerce (OCC), including a 2016 provincial policy resolution from the Peterborough Chamber of Commerce and the 2015 report Empowering Ontario.  It means the government is listening to what the Chamber Network has to say and this week’s announcement indicates that change is coming. 

The government explains that the Industrial Conservation Initiative will be expanded so that any company that consumes more than 1MW will be eligible. Presently, 300 companies are enrolled in the program which has saved the grid 800MWs through conservation – relatively the size of two gas plants.

With the announcement earlier this week, another 1000 companies will be eligible. By simply enrolling in the program, those 1000 companies could each save 14% on their bill. Depending on their ability to reduce peak electricity consumption, they could save up to 34% when the program is fully implemented, which could be 2018. 
This expanded program is in line with what we heard from a number of businesses at a roundtable event earlier this year with the Peterborough Chamber of Commerce, the OCC and Peterborough Distribution Inc, where they expressed concern over the lack of incentives in the electricity realm for Class B users.  

“Electricity pricing is the number one issue we hear about from our members, so we are thrilled to see the advocacy of the Peterborough Chamber of Commerce in partnership with the OCC make a difference,” says Jason Becker, Chair of the Board of the Directors, Peterborough Chamber of Commerce. “We hope to see our member businesses use the expanded program to save money on their electricity bills.” 

The small businesses on time-of-use pricing will see some relief as well.  Throughout summer consultations on the Small Business Too Big To Ignore campaign, the Peterborough and Kawartha Chambers of Commerce heard about the negative impact of rising electricity prices and security of the electricity network.   Under the provincial government’s plan announced in the throne speech those customers, from retailers to restaurants, will receive the eight per cent savings – an amount equal to the provincial portion of HST.  If passed, this legislation will take effect January 2017.  

Transparency is the reason the Peterborough Chamber and Ontario Chamber Network are still asking for a clearer picture around the makeup of electricity bills.  

The following recommendations were passed earlier this year as lobby points to government:

  1. Make public the full breakdown of the cost-drivers behind electricity distribution and generation and how investment decisions since 2003 have impacted electricity cost. 
  2. Complete and make public a jurisdictional comparison, along with Class A, Class B and Time of Use Pricing for small businesses, that can be used to better understand how Ontario stacks up to its neighbours and competitors for business investment.  

“While the measures announced in the throne speech are certainly welcome relief for business, there remains a fundamental problem with the structure of Ontario’s energy system,” says Stuart Harrison, President & CEO, Peterborough Chamber of Commerce. “Perhaps it’s time for a look at the future strategy.”

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