MORE HYDRO SHOCKERS
Posted by John Malloy on 02/16/2009
Electrocuted by higher bills, while Hydro One rakes in the dough:
By LINDA LEATHERDALE
Let me be clear: Profit is not a dirty word.
But what is – is “profiteering” from an essential service paid for by the taxpayers, while struggling families lose jobs and can’t afford to pay the bills. Worse, for almost a decade these families have been paying a gouging debt retirement tax on their bills, to retire Ontario Hydro’s old stranded $20 billion debt. Then the taxman hits them again with a 5% GST on top of it.
Can you imagine a small business who mismanaged and lost money turning around and telling its customers – “you didn’t pay enough” for their products or services bought years ago, so cough up now? Insanity.
Welcome to Ontario’s hydro follies – where Queen’s Park has totally mismanaged an electricity sector once the envy of the world and now an explosive political minefield, with some getting rich as a strong lobby took us from public power to a free market under deregulation, to half-baked privatization – with the taxpayer footing the bill for all the mistakes along the way.
“Linda, if Hydro One is making such a sweet profit, why am I not getting a break in the debt retirement tax?” asked an angry reader.
What this reader’s referring to is an explosive 25% jump in Hydro One’s revenues in 2008 to $4.6 billion, up $99 million from 2007, to rake in a decent profit of $498 million a year ago. The utility gives credit to a break in corporate taxes.
But despite the profit, Hydro One applied to the Ontario Energy Board and was approved for distribution rate hikes, effective Feb. 1. Its website estimates its customers will be paying anywhere from 1.3% to 8.3% more for hydro this year, with small businesses paying 2.5%.
Hydro One, formed on May 1, 2000, after the old Ontario Hydro monopoly was busted up, is seeking to bring its rate structure into 12 from 280, after it gobbled up many smaller, local utilities across the province. And that is pushing up prices, particularly in rural Ontario.
Meanwhile, new layers of hydro brass enjoyed fat-cat paycheques and bonuses since the bust-up that ushered in a new electricity empire of new players, including Hydro One and Ontario Power Generation. A revolving door of CEOs, paid millions of dollars in salaries and caught in one scandal after another, ended up costing taxpayers millions in very expensive golden parachutes.
Then new Sunshine laws revealed that gluttony was growing at Queen’s Park, where more and more civil servants were joining the lofty $100,000 a year club, with the bulk of them hydro workers.
Most in the private sector were lucky to get a raise at all, if they were even able to hold on a job as Ontario’s unemployment rate is on rise. Many struggle to keep up with household bills, especially skyrocketing hydro bills.
And rubbing salt in their wounds was news that Toronto Hydro sought a 6.3% rate hike to cover the cost of lost revenue, due to so many households frantically cutting back and conserving energy – which is what green advocates chatised us to do.
Bottom line is cheap, affordable and dependable electricity is what our strong manufacturing heartland was built on back in the heyday when we were proud to belt out, “Got a place to stand, got a place to grow, we call this land Ontario.” …
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Listen to Linda Leatherdale with popular Toronto morning man Bill Carroll on NewsTalk 1010 CFRB on Monday, Wednesday and Fridays at 7:30 a.m.
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