OCC and Rising Energy Costs
July 28, 2015
The Ontario Chamber of Commerce (OCC) has today called on the Government of Ontario to take immediate action and address the business community’s rising electricity costs. In a comprehensive report, the OCC makes five recommendations that government and energy agencies should take to curb costs and keep business in the province.
The report is accompanied by public opinion research from Leger, which cautions that soaring electricity prices have reached a crisis point for Ontario businesses and consumers. The research finds that 81% of Ontarians are concerned that rising electricity prices will impact the health of the Ontario economy and the same percentage fear that rising electricity prices will impact their disposable income.
“The price of electricity in Ontario is set to rise over the next two decades, adding to the cost of doing business in the province,” said Allan O’Dette, President & CEO of the OCC “If real and meaningful action is not taken to mitigate these increases, businesses will leave the province, jobs will be lost, and our economy will suffer.”
The price of electricity in Ontario is set to rise over the next two decades. In the time since the government released its 2013 Long Term Energy Plan (LTEP), industrial electricity rates have increased by 16% and will increase a further 13% over the next five years.
This report comes at a pivotal moment. The OCC’s membership of 60,000 businesses say the price of electricity is undermining their capacity to grow and hire new workers. At the same time, the cost of doing business in Ontario continues to rise.
The government is moving ahead with a number of initiatives that will directly affect business, including increases to the minimum wage and Workplace Safety and Insurance Board (WSIB) premiums, a review of the Labour Relations Act, an Ontario Retirement Pension Plan (ORPP), and a cap-and-trade system. Combined, they will have a profound net negative impact on the province’s business climate.
Through consultation with our membership, sector experts, businesses, government ministries and agencies, and consumer groups, we examined ten commonly cited solutions to rising electricity rates. The highest ranking options comprise our five final recommendations:
∙ Increase transparency of electricity pricing and system cost drivers.
∙ Keep the Debt Retirement Charge on residential bills until it has been retired.
∙ ‘Incentivize’ voluntary consolidation of local distribution companies through multiple channels.
∙ Move away from a central procurement model to a more competitive capacity market structure.
∙ Unlock the power of smart meter data by capitalizing on meter data analytics at a province-wide level.