Ontario government takes responsible action on electricity pricing

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Ontario government takes responsible action on electricity pricing

Ministry of Energy

Energy Minister introduces new legislation and sends a strong message on conservation QUEEN'S PARK, ON, Nov. 25 - Energy Minister Dwight Duncan today introduced new legislation that takes a responsible approach to electricity pricing by better reflecting the true cost of electricity. The proposed legislation, entitled the Ontario Energy Board Amendment Act, 2003, would ensure a fair and predictable approach to electricity pricing and send a clear and powerful conservation message to Ontarians. "Our plan will provide stable and predictable electricity prices for consumers, encourage conservation, create environmental benefits, and attract new sources of supply," Minister Duncan said. "We are moving forward with a responsible, sustainable approach that will put an end to unaffordable taxpayer subsidies of electricity prices." The government's plan would remove the current 4.3 cent price freeze in favour of a pricing structure that better reflects the true cost of electricity in Ontario, and includes a strong incentive to conserve energy. Starting April 1, 2004, an interim pricing plan would be implemented. The first 750 kilowatt hours consumed in any month would be priced at 4.7 cents per kilowatt hour. Consumption above that level would be priced at a higher rate of 5.5 cents per kilowatt hour. Homes that use 750 kilowatt hours or less per month would see an increase in their monthly bills of about $5. "Approximately 60% of Ontario households use less than 1,000 kilowatt hours per month," the Minister said. "Since the proposed plan would not take effect until April, consumers would have a chance to take conservation measures, reduce their consumption levels, and, therefore, limit the impact of the price change on their electricity bill." This pricing plan would stay in place until the independent regulator, the Ontario Energy Board (OEB), develops new mechanisms for setting prices in the future. The OEB's new pricing mechanism would be in place as soon as possible, and no later than May 1, 2005. Transferring the authority to set prices is a crucial step in ensuring that politics are taken out of electricity prices. The proposed legislation would protect residential and low-volume consumers from the volatile price spikes seen under the previous government's original plan, so families, small businesses and other low-volume consumers could better manage their energy costs. "The days of using energy as a political football are over. We are sending a clear signal that this government intends to deal with electricity issues in a practical, transparent and sensible way," said Minister Duncan. "This plan is a significant step toward attracting new electricity supply to Ontario to sustain our future energy needs." Disponible en fran├žais. www.energy.gov.on.caFor further information: Contacts: Angie Robson, Minister's Office, (416) 327-6747; Ted Gruetzner, Communications Branch, (416) 327-4334