Ontario to raise power rates by $2 monthly

The board says the impact will be $2.40 per month on a residence consuming 1,000 kWh monthly, compared with the summer price.

However, compared with last winter's rate, the increase would be $6 a month or 12 per cent. For power use above the 1,000-kilowatt per hour level, the increase is 10.2 per cent.

The rate, reset at the start of each May and November, was previously five cents per kilowatt-hour up to the lower summer threshold of 600 kWh, and 5.9 cents per kWh for consumption above that level. Those basic prices had been unchanged since last November, when they were trimmed slightly.

The board said today that the price increase – shown on the "electricity" line of consumers' utility bills – is caused by several factors, including new higher-cost renewable and natural gas generation projects coming into service, and an expected rise in the cost of electricity from nuclear and large hydro plants.

The provincial regulator also cites the expense of conservation initiatives, and the impact of the provincial government's directive to cut carbon dioxide emissions from coal-fired generation by a further one-third by 2011.

"These upward price pressures are partially offset by a forecast of lower electricity market prices primarily due to a decline in expected natural gas prices," the board said.

Natural gas generates about 10 per cent of Ontario's electricity. The rest comes from Canada's extensive network of nuclear plants, which produce more than half the province's electricity needs, as well as coal, hydroelectric, wind and alternative energy sources.

Ontario has three currently operating nuclear plants – Pickering and Darlington east of Toronto and Bruce on the shores of Lake Erie – and plans a major expansion of the system over the next two decades.

The provincial regulated price plan for electricity is designed to have consumers pay the costs of supplying electricity while smoothing out price variations. It does not apply to consumers buying their power under contracts with third-party retailers.

And for the small number of Ontario households connected through smart meters and paying time-of-use rates, the peak price per kilowatt-hour declines to 8.8 cents from 9.3 cents and the mid-peak price is trimmed to 7.2 cents from 7.3 cents, but the off-peak price rises to 4.0 cents from 2.7 cents.