With the Liberals and the NDP laying out their marquee pocket book policy of reining in hydro costs, all eyes are focusing on what the front-runner Tories might do to reduce the sizeable costs. However, despite repeated questions, the PC Leader Patrick Brown seems content to wait it out.
I have to admit, this hydro-palooza of policy talk has got me energized! So in the absence of an official PC policy on hydro, readers will be stuck with some version of the Rob Leone plan.
Here are my coal’s notes on what a conservative energy policy might look like in 2018.
First, we’re paying astronomically more because of the policy decisions of the Ontario Liberals. The Tories must aggressively make many of the points Bryne Purchase outlined in his recent QP Briefing article. The bulk of the $50 billion in new energy generation that the government has spent has been caused by Liberal policies. Rates in Ontario were stable until the Green Energy Act started escalating all kinds of costs from generation (feed-in-tariff program), to transmission (all this micro-generation was scattered all over the place), and time-of-use pricing didn’t shift nearly enough people to use electricity during off-peak hours thereby forcing people to pay more. There’s more, but you get the drift. Make sure the Liberals don’t shift the blame.
Second, we need to restore some economic principles back into the electricity sector. Hydro is in this odd place where we have an oversupply of energy, yet costs continue to rise, when the opposite should happen. Demand for electricity has dampened over the past 10 years, and we are still paying more, when the opposite should happen. Energy policies need to get back to market principles.
Third, if the green energy contracts are the problem, do something about the contracts. Here the Tories must channel a bit of Trump. The Wynne Liberals are just bad negotiators. This government can’t negotiate its way out of anything without costing taxpayers billions. Reason enough to get rid of them, and if the Tories are smart, this could emerge as a dominate narrative for them in 2018. Don’t sign any more contracts, and plan to do something with the existing ones.
Fourth, a PC government could explore the creation of new diversified generation companies. The idea here is to let contract holders convert their contracts into shares of a generation company and make payments to shareholders in the form of dividends. With diversification, the shareholders would have more steady revenue. Wind blows most when the sun doesn’t shine (please don’t read a pun into that) and when the sun is blazing, wind is often still. Peaking plants are needed when there are sudden weather shifts and such but otherwise stay dormant. The reality is that we still pay when these generators aren’t pumping out electricity. Creating companies that combine wind, solar, and peaking plants would be a way to end the costly policy of paying producers for no energy production and selling surplus energy to the US at a severe discount. And, if you need more generation in the future, a series of these new companies could bid for the right to generate allowing Ontario to choose the best price (and maybe even the greenest mix).
Fifth, since Trump is offering a window of trade renegotiation, perhaps it’s high time we pressure the federal government to create a free tariff zone with countries that have clean energy grids. The fact is that many Ontario businesses are suffering due to high energy costs, and this could be a way of taking their concerns to heart and fighting for them. Products imported from ‘dirty grid’ countries are obviously going to be cheaper, so imposing a carbon tariff (doesn’t that sound better than a carbon tax?) would give made-in-Ontario products a fairer shake.
By the time the next election rolls around, all the easy stuff will be done. It’s time to be innovative and forward thinking. Energy policy could use a hefty dose of common sense.
This article appeared in Queen’s Park Briefing. Visit QPBriefing.com to subscribe to this publication and stay on top of all things related to Ontario government and politics!