Ontario government obscuring true cost of cuts to hydro bills, auditor general says
The Canadian Press
Published Tuesday, October 17, 2017 11:32AM EDT
Last Updated Tuesday, October 17, 2017 9:45PM EDT
TORONTO -- Ontario's auditor general says the way the Liberal government is cutting hydro bills by 25 per cent purposely obscures the true financial impact of the measure to avoid showing a deficit on the province's books.
Bonnie Lysyk estimates the plan's total cost will be $39.4 billion over 30 years, but the accounting the government is using in the plan means Ontario's net debt and future deficits won't reflect that.
The hydro plan lowers time-of-use rates by removing from bills a portion of the global adjustment, a charge consumers pay for above-market rates to power producers, for the next 10 years.
In the meantime, producers will continue being paid the same, so Ontario Power Generation has been tapped to oversee the debt used to pay that difference.
The cost of paying back that debt with interest will then go back onto ratepayers' bills for the following 20 years, and Lysyk estimates the total cost will be $18.4 billion borrowed to cover the shortfall, and $21 billion in accumulated interest.
Lysyk says the financing structure is needlessly complex and also leads to about $4 billion in extra interest charges because the province isn't directly borrowing the money.
The government says it doesn't agree with Lysyk's conclusions, saying their financing structure is indeed in compliance with accounting standards.
Premiere Kathleen Wynne has said the extra interest costs related to the plan would amount to $25 billion over 30 years.
Electricity bills in the province have roughly doubled in the last decade, due in part to green energy initiatives, and the government has said this plan better spreads out those costs, instead of putting the entire burden on current ratepayers.