This article can be found at: http://www.emccanada.org/documents/ontarioupdate2010editions/volume15issue18pdf

We had some very interesting discussion as to the awareness level of this benefit charge.  There is also a discussion forum going on at: http://www.emccanada.org/forums/ontariomonthlyhydrobenefitcharges/ontariomonthlyhydrobenefitcharges/monthlyhydroprovincialbenefitcharge

I invite you to join in on the discussion!  Below is an excerpt from Johns article.

A Discussion on Your/Our Provincial Benefit Charge

Take Part in the New Ontario Monthly Hydro Benefit Charges Member Forum

Submitted by John Spencer, V P Operations, PGI Fabrene Group North Bay

Ontario has perhaps the most lucrative FIT (Feed In Tariff) program on the globe. This is not an exaggeration. It is aimed to indentify the potential generators/suppliers of green energy (chiefly solar and wind) so that they are willing to invest and get a return that makes economic sense. I believe that solar power is purchased at 12X and wind at 6X the market rate respectively.

 

The Gov't must approve the installation/paperwork etc and the term of the agreement is 20 years. There is not yet a single installation for solar approved and 'working' in the Province. The surcharge will grow rapidly as they get approved.

 

It is important to note that there is excess power today in Ontario. Coal fired is expected to be around 5-6% now and 2-3% soon (it is really not needed). The main reason is the loss of operating manufacturing capacity due to the 2008/2009 crash. Our membership knows that automotive, mining and pulp/paper/forestry are all in trouble and they are the pillars of our manufacturing infrastructure.

To fund the extra cost of the purchased power the Gov't has used the Provincial Benefit Charge to gather the funds. It needs to be understood that whatever funds are promised must be collected. This means that the charge per kwhr is based on the provincial energy sales. So... if we use less energy they will increase the surcharge and vice versa. In 2010 the surcharge has ranged from 2.12 c/kwhr to 4.47c/kwhr for the first 7 months of this year. The high end of this is more costly that the energy itself and the PB charge exceeded the cost of energy for manufacturers in April. As the hot months increase energy consumption (air conditioner) the surcharge will fall. The unfortunate thing here is that for a consumer to spend money to conserve is a temporary fix - the surcharge just goes up to be able to collect the funds required. The funds required will grow as the province approves and signs off on ever more green energy projects.

 

To mitigate this there are several options/themes.

1. Conservation incentives can be tapped. But as everyone does this the surcharge will grow. The organization that conserves last mitigates last.
2. For manufacturers to 'join in' the FIT reward program in some way there are some options. This means to apply for, get approval, purchase, install and operate a green energy generation system or partner in some way with someone that does. Variations on this include leasing the roof space and avoiding the maintenance cost of a solar grid and the roof footprint underneath. etc.
3. Move operations out of Ontario. This will leave the rest of the people staying and operating in Ontario with an ever-growing surcharge.
4. Try to get some changes made, perhaps a cap, a freeze etc by working with our MPP.

 

As a concerned manufacturer I am trying to feel out the membership on this issue. I have spoken to a few and they have generally not been aware of this going on. Various invoice structures do not clarify this part of the charge etc. I would like to know 3 things.

1. Did you know about this charge and understand what was behind it?
2. What have you done about it?
3. Would you be willing to work on applying pressure to the Provincial Gov't to rectify this system?
4. 4.       To take part in the new Ontario Monthly Hydro Benefit Charges Forum to discuss, understand and mitigate the Provincial Benefit Charges you are paying for every month in Ontario. CLICK HERE!