Power Surge: The Causes of (and Solutions to) Ontario’s Electricity Price Rise Since 2006

Summary:
Page Title:Power Surge: The Causes of (and Solutions to) Ontario’s Electricity Price Rise Since 2006 – C.D. Howe Institute
Article Title:Power Surge: The Causes of (and Solutions to) Ontario’s Electricity Price Rise Since 2006
URL:https://cdhowe.org/publication/power-surge-causes-and-solutions-ontarios-electricity-price-rise-2006/
Published Date:June 15, 2021
Accessed Date:February 8, 2025

Taxpayer Electricity Subsidies Out of Control

  • Ontario’s electricity sector has struggled with rising system costs for more than a decade. Why? The crux of the problem are increases in the cost of supply from high-cost contracts spread over less electricity consumption than forecast when the contracts were struck. The result has been upward pressure on prices that has only been mitigated by government rebates that have shifted costs to taxpayers.
  • The Ontario government should provide sound policy direction that focuses on empowering and resourcing the regulator, the Ontario Energy Board (OEB), to oversee decisions on procuring electricity, moving electricity procurement decisions to local buying groups.
  • For residential customers and small businesses who pay regulated energy rates, we propose giving consumers the option of a lower price than otherwise most of the time, but with an incentive to reduce use at extreme peak demand hours.
  • Lastly, the province should reduce rate subsidies, which have climbed to $6.5 billion in the 2021/22 fiscal year. For comparison, this is $700 million more than what the province plans to spend on long-term care. They are not sustainable.

Membership Application

Interested in becoming a Member of the C.D. Howe Institute? Please fill out the application form below and our team will be in touch with next steps. Note that Membership is subject to approval.

"*" indicates required fields

Please include a brief description, including why you’d like to become a Member.

Member Login

Not a Member yet? Visit our Membership page to learn more and apply.