Ontario electricity customers have paid more than $6 billion to dump surplus, high-priced power: study

Ontario electricity customers have paid more than $6 billion to cover the cost of exporting the province’s energy surplus, according to a new study from the Consumer Policy Institute.

Over the last decade, Ontario customers have paid $6.3 billion to cover the cost of selling high-priced electricity to customers outside of the province, according to a new study by the Consumer Policy Institute. A majority of those costs – $5.8 billion – have come since 2009, as demand for electricity in Ontario has fallen, while more generation capacity continues to be added, creating a growing surplus that gets dumped at below-cost prices in places like New York and Michigan.

Ontario’s electricity consumers end up paying the premium between what Queen’s Park has promised to pay generators through long-term contracts and what that power is worth on the electricity market. That premium is paid each month through a consumer-funded charge known as the Global Adjustment, which has increased, on average, 20% annually over the last 5 years.

Customers outside Ontario don’t pay the Global Adjustment, so those excess costs are paid only by Ontario ratepayers and act as a subsidy from Ontarians to customers in other states and provinces.

The study also showed that, as a result of provincial policy enacted in 2011, residential and small businesses customers in Ontario pay a greater percentage of the export subsidy than large energy consumers.

“Ontarians are facing soaring hydro bills made worse by being forced to subsidize cheap electricity for customers in other states and provinces,” says Brady Yauch, economist and Executive Director of the Consumer Policy Institute. “The province has turned the business of selling power into a money loser for Ontario electricity customers.”

Download the study here.

For any media inquiries, please contact:

Brady Yauch
Economist and Executive Director
Consumer Policy Institute
(416) 964-9223 ext 236
bradyyauch@consumerpolicyinstitute.org
http://cpi.probeinternational.org

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7 thoughts on “Ontario electricity customers have paid more than $6 billion to dump surplus, high-priced power: study

  1. So they did not actually pay anything did they. They actually got the going rate for what was sold. They lost money over what it cost to produce but they did recoup 2.5 cents per kwh.
    The main problem here is that Ontario is actually using less power than in previous years.

    1. The main problem here is either negligence, or fraud.
      Negligence if supply was contracted with no regard for what it would be worth.
      Fraud if it was contracted knowing how unnecessary it was, and consequently how little it was worth.

  2. This number seems light to me . The auditor general in 2013 identified 3 billion which was just for 2013 ? Over a billion a year for 14 and 15 . We lost 500 and million in January alone this year and I believe 300 and some million in June. There is still 7 other months .
    Once you are talking billions it is all unexceptable but just for clarity.

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