Fact Check – Energy Prices and Norm Miller Petition
20 Thursday Oct 2016
Written by parry034 in Reflections
‘There are three kinds of lies: lies, damn lies and statistics.’ A saying Popularized by Mark Twain and attributed to Benjamin Disraeli, misses the more obvious issue, sometimes people simply fail at middle school arithmetic, or choose to compare apples with oranges, or apples with orangutans.
I am referring to the Norm Miller petition on the subject of Ontario hydro rate increases. The petition asks people to express their support by signing and forwarding to the Ontario Legislature a petition critical of hydro prices under the current Liberal Government. I received the petition as part of an email from the Parry Sound and Area Chamber of Commerce. Reviewing the petition the numbers seemed strange and I decided to contact Norm Miller’s office for the details. They were helpful and sent me the URLs for the hydro rates then and now. Unfortunately, the numbers don’t work out as presented in the petition. It seems to be a case of both an incorrect point of reference (apples and oranges) as well as an inappropriate and self-serving analysis.
I sent a note to Mr. Miller’s office with my concerns last week. I received a call from Adam a couple of days later. He did not dispute my analysis, and suggested that they were responding to Kathleen Wynn’s remarks about the large increase in hydro rates. There was no sense that the numbers or the language in the petition would be changed. That would of course be embarrassing and possibly compromise their point.
I realize that politics is a non-contact sport where interference is required, expected, and not penalized. My issue is that the numbers as presented in the petition are wrong. The point the petition makes is reasonable, and there is enough of an increase in hydro prices for people to be concerned and complain. But the numbers have to be properly analyzed and presented. Is a 150% increase in prices any more acceptable than a 300% increase? A little, but still too much for most people to easily swallow.
The political campaigns south of the border have made it hard to trust anything that is being said. Truth is seemingly no longer part of the standard toolbox of politicians. It’s all about leverage and spin. Truth and accuracy be damned.
I’m not sure what the people in Mr. Miller’s office were thinking when they put together the numbers. Perhaps they felt a little massaging would help their point. Do we need to suspect the veracity of everything coming out of Mr. Miller’s office? Using the Washington Post’s Pinocchio Scale the claims in the petition rate Two Pinocchios.
Mr. Miller has a very reasonable point to make but undermines his position with sloppy and self-serving analysis.
Here is the relevant portion of my email to Mr. Miller’s office, including my analysis. It is followed by Mr. Miller’s petition.
Email – October 9, 2016 to Mr. Miller’s Office“
“I received an email on October 7th from the Parry Sound and Areas Chamber of Commerce that included a petition from Mr. Miller. It opens with: “WHEREAS Electricity rates have risen by more than 300% since the current Government took office;” and continues on.
My interested was piqued by the statement “risen more than 300%”. While rates have risen, to the distress of many, especially those who chose the cheaper alternative of installing electric baseboard heating, the 300% figure seemed a bit high. That was the reason for my call. I expected that Mr. Miller’s office would have the supporting information. Thank you for forwarding me the relevant URLs.
The petition refers to “the current Government”. I believe the current government assumed office in February of 2013. I suspect that this is not the baseline referred to in the petition. I expect that the petition is making reference to the Liberal Party forming a government in October of 2003. But the wording in the petition would suggest the former not the latter and infers an even more dire situation.
Reviewing the references you provided, especially http://www.ontario-hydro.com/historical-rpp-rates, I created the following table of hydro prices then and now.
February 2013 – Blended Rate $0.07938 per kWhr. October 2016 – Blended Rate: $0.11 per kWhr. By my calculation this amounts to a 38.6% increase, large by any measure but certainly not 300%
October 2003 – Blended Rate: $0.043 per kWhr. October 2016 – Blended Rate: $0.11 per kWhr. By my calculation this amounts to a 155.8% increase, even larger, but once again not 300%.
It is possible to get to a 300% increase if one goes back to the start of the McGuinty led Liberal government, and only uses the blended rate from that time ($0.043 per kWhr) and the On Peak value of today ($0.18 per kWhr). That figure would be an increase of 318.6% over the 2003 rate, but not the 2013 rate. Using the 2013 On Peak rate, to properly capture the ‘performance’ of the “current Government”, the increase would be 52.5%. Again not the 300% mentioned in the petition.
Comparing On Peak with a Blended rate from 2003, which was the only rate structure at the time, seems to be a bit disingenuous. One could make the case that for consumers the introduction of On Peak, Mid Peak and Off Peak was a benefit for householders who consume the majority of their electricity Mid Peak and Off Peak on weekdays, and Off Peak on weekends.
If one uses the same On Peak to Blended Rate ratio for electricity in 2003 as was first introduced in 2006, the 2003 On Peak base rate would be $0.0824 per kWhr. The increase then over the last thirteen years would be 118%, not 300%.”
TO: THE LEGISLATIVE ASSEMBLY OF ONTARIO
WHEREAS Electricity rates have risen by more than 300% since the current Government took office; and WHEREAS over half of Ontarians’ power bills are regulatory and delivery charges and the Global Adjustment; and
WHEREAS the Global Adjustment is a tangible measure of how much Ontario must over-pay for unneeded wind and solar power, and the cost of off-loading excess power to our neighbours at a loss; and
WHEREAS the market rate for electricity, according to IESO data, has been less than 3 cents per kWh to date in 2016, yet the Government’s lack of responsible science-based planning has not allowed these reductions to be passed on to Ontarians, resulting in electrical bills several times more than that amount; and
WHEREAS the implementation of Cap-and-Trade will drive the cost of electricity even higher and deny Ontarians the option to choose affordable natural gas heating; and
WHEREAS more and more Ontarians are being forced to cut down on essential expenses such as food and medicines in order to pay their increasingly unaffordable electricity bills; and
WHEREAS the ill-conceived energy policies of this Government that ignored the advice of independent experts and government agencies, such as the Ontario Energy Board (OEB) and the Independent Electrical System Operator (IESO) and are not based on science have resulted in Ontarians’ electricity costs rising, despite lower natural gas costs and increased energy conservation in the Province;
WE, THE UNDERSIGNED, PETITION THE LEGISLATIVE ASSEMBLY OF ONTARIO AS FOLLOWS:
To take immediate steps to reduce the total cost of electricity paid for by Ontarians, including costs associated with power consumed, the Global Adjustment, delivery charges, administrative charges, tax and any other charges added to Ontarians’ energy bills.
Even Prettier When Fallen?
No comments
October 20, 2016 at 2:59 pm
I appreciate your ‘watch dog’ activity on the PTB, as you appear to be the only person willing to stand up and be counted in our community these days.
I have monitored my Electric usage, and associated costs, for decades, and have my own way of figuring my charges out. I take my total charges (including HST) and divide by my actual KW usage to figure out my cost per kwh. My last bill for August usage was 1101 kwh, and I was charged $223.27, or 20.1 cents per kwh. The HST portion of the total was $25.69.
If we go back to the year 2000, the rate was $29.13 for the first 250 kwh plus $7.21 per kwh for the remainder. There were no extra charges in 2000, nor was there any GST at that point, to the best of my recollection. In August 2009, the rate was $12.29 using my method of calculation. Please keep up your (unpaid) work which is much appreciated………..Cliff Beagan
October 26, 2016 at 9:08 am
Comparing the 2003 blended rate with the 2016 peak rate is, i’ll agree, an over-reach, and was likely done for the sake of spin. They should correct that.
So I think you got them there.
I don’t think you got them, however, on the distinction between the 2003 mcguinty government and the current one. Yes, the leader changed, yes many of the key workers have changed, but just as changing many planks does not make theseus’ ship into a different boat, so also this is still the same liberal government. And historically, that’s how we’ve considered them. When Notley unseated Prentice in Alberta, the headlines did not say that she had ended merely a 1 year conservative dynasty, did they?
I appreciate your point about trust and honesty though. Miller should correct his numbers.