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November 12, 2002
Premier Ernie Eves
Legislative Building
Queen's Park
Toronto, ON
M7A 1A4
Dear Premier Eves:
I listened, with great interest, to the courageous steps you
took on November 11, 2002 to limit the cost of power to Ontario consumers. Great stuff, just what the customer wanted to hear.
In last week's correspondence to Minister Baird, I expressed caution, as
the cure may be worse than the disease. It is as if you have been attempting to perform heart surgery and you have never had a scalpel in your hand. Indeed, you have an impossible problem on hand as this
situation was created by others and was permitted to go too far before any corrective action was taken. Unfortunately, your predecessors failed to listen to those who lived and worked for your utilities.
Alternatively, they selected to listen to everyone who deemed themselves as 'an expert'. It is unfortunate that your present advisors appear to be the same.
You deserve full marks for your attempt but; once
again, I believe you have been ill advised by amateurs. In 1998, I made a presentation at a local Kiwanis meeting, informing those in attendance that the price of power would go up, when anyone with a Grade 9
education who could read and do simple math could see it would.
The Minister of Energy at that time, Honorable Jim Wilson, wrote to the Pembroke Observer, under his signature, and stated that I did not know what I was talking about. I am enclosing copies of my letter and response.
My 'non-professional' expertise has now been confirmed as being correct.
I am currently in my 43rd year of working for private and public power and I do have serious concerns regarding the advice being offered by you and your government. Your nine-point plan, although well meaning, does possess a few wrinkles. My concerns are as follows:
Cap energy at 4.3 cents Although this is a great idea, was this the fixed price of power prior to May 1, 2002?
If a customer has signed on with a retailer at 5.9 cents, this rebate is going to the retailer because of signed contracts. Is this customer going to get the rebate? Who is responsible for paying the difference to the retailer? Will the Government of Ontario be responsible? Is the taxpayer responsible? Are the energy companies going to fail as a result of action by the Government and resultant policy?
In your advertisements, the word 'cap at 4.3 cents/kwh' is used.
This would be great since, in the off demand peak hours, the price of electricity would be billed at 2.5 cents, rather than 4.3 cents. It would also mean that in peak hours the price would never exceed 4.3 cents.
However, in your action plan item #1 states, and we quote, "The price consumers pay for power would be lowered to a constant 4.3 cents per kwh."
The word, 'constant' indicates that 4.3 cents would be paid for all power, regardless of the time of day; thus, negating interval or time of use metering or peak load shaving.
If it is the intent to have a
flat rate of 4.3 cents, there is a large difference as there is only .85 cents/kwh difference between the present average rate, since May 1, 2002, and the 4.3 cents rate. Customers would have to utilize 9000
Kwh in the period from May 1 to December 1 to merit the $75.00 rebate.
Refund before year end
This is great in principle. However, in reality, this promise requires computer programming, testing and re-billing of all energy consumed after May 1, 2002. As well, where is the rebate money coming from? Will it be provided by the LDC, Hydro One, OPG or the Government of Ontario? When will this money be given to the customer? The LDC will not be in a position to inform the Government of the amounts owing until all of the bills are recalculated. There will then be a wait on funds in order to provide refunds. Will this be an extra billing and, at what cost? Who is expected to pay the cost of refunds, bank charges, labour, cheques, etc., or would this be a credit on the next bill? It was stated that, after January 1, 2002, it may be a credit on the bills. Who is going to finance the various utilities in the interim until such time as the rebates are paid out? Will the debt, if transferred to the Ontario Electric Finance Corporation, only increase the total debt that has already been established?
No disconnects for failure to pay hydro bill
Does this infer that the shareholder, municipalities or, in the case of Hydro One, the Government of Ontario, is expected to pay for the power consumed by the customer in the interim as no one is expected to pay their bills? May I remind you that the directors of corporations are obliged to practice due diligence in the operation of their corporations. We have no choice if we are to pay our bills to take every means possible to collect on unpaid accounts.
The Government of Ontario, under the direction of the Ministry of Energy, wrote the rules and codes.
After abiding by the rules written by your Ministry, you are now insinuating that the Ontario Energy Board, Ontario Power Generation and the Local Distribution Companies are all under independent review for following the codes and guidelines, implemented by the Government. What a shame. There is one common problem, that being your Ministry and their advisors. You could save millions by 'freeing up their time.'
Frozen rates for the LDC
The LDC was never permitted to ever reach their 9.88% return, as set as a limit for the companies to return to their shareholders. You are essentially downloading if the utilities return to non-profit. More flip-flop is taking place. Would this include Hydro One? What happened to the Government theory that private was better?
LDC Service Charge
This charge was mandated by the Government of Ontario. The Government set the rules for this charge. It is stipulated in the codes. The service charge has been set up as your Government stipulated.
Standard province-wide bill This is also a great idea; however, once again, this is a cost to the LDC to reformat and reprogram billing, while the LDC rates are frozen.
Our rates, presently, are as directed by the OEB. Why should we pay to change the bills, when the Government alters their requirements?
GST I agree that we should not pay GST on the debt;
however, the customer has been paying for this for years. Why the excitement now?
Incentive to pay less With the current rates on a KWH basis, our Load Management program had to be
discontinued. No one listened. What about the homes that are heated electrically? What effect is a fixed 4.3 cent rate going to have on electrically heated homes in Ontario?
"From now on,
the only time your electricity will go up is when you use more power" This statement is somewhat ridiculous. Is the Government going to cancel all of their codes and eliminate new charges to utilities
(inspection fees by ESA) that are going to be applicable January 1, 2003? Who is expected to pay the additional associated costs to accommodate this new mandate?
In summary, there is a lot of meat in your
nine-point plan. Unfortunately, there are also flaws. I believe that the biggest political mistake the Government is currently making is that they will not admit that the plan was wrong.
The people of Ontario were gravely misled. The Government assured the public that they would be educated. They failed to do this. Presently, the finger is being pointed at everyone except the Ministry of Energy where the rules were conceived under Mr. Wilson.
It is absolutely imperative that great care must be made in statements until such time as responsible solutions may be worked out in an attempt to meet the goal of reasonable electricity prices in the
Province of Ontario. We, like yourself, live in Ontario, work in Ontario and have grandchildren living in Ontario. We want the best world for each of them to grow up in.
The local municipal utility is
responsible. We have proven it over the years with debt free utilities. It is time we were heard and not criticized for attempting to follow your Ministry's rules.
Yours sincerely,
Murray L. Moore
President
MLM/mtd
Encl.
Cc:Electricity Distributors Association (EDA)
John Baird, Minister of Energy
Sean Conway, MPP
Pembroke Daily Observer
Almonte Gazette
Cobden Sun
Eganville Leader
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