The Debt Retirement Charge (DRC) on business and industrial hydro bills in Ontario will be ending after 16 long years.
March 21, 2018
The Debt Retirement Charge (DRC) on business and industrial hydro bills in Ontario will be ending after 16 long years. This charge came into effect in 2002 to combat stranded debt from the 1999 breakup of Ontario Hydro and is a flat rate of 0.70 cents/kWh. While there are several ways that the stranded debt is being paid down, electricity consumers have paid over 13 billion dollars as of 2016 through the DRC. The Ontario Government has committed to reduce electricity costs, and as part of that promise has decided to remove the DRC from hydro bills effective April 1st, 2018. While this is good news for consumers in the short-term, as their hydro bills will decrease, the future of electricity rates is still unclear. With the Government's intervention to cut and fix hydro rates, we will see debt continue to increase. While this new debt is not ‘stranded’, it will still need to be paid back at some point in the future.
Since the start of November, the natural gas futures index on the NYMEX has shown incredible volatility. Now up 60% YTD, the natural gas futures are having a rocky relationship with weather forecasts across North America.
The federal government has released its official plan for the carbon tax that is to be implemented beginning January 2019. This tax plan will be released to provinces that opt to use it over a provincial carbon tax, as well as those provinces that don’t have a carbon pricing plan.
Ontario’s Government has introduced legislation to repeal the Green Energy Act. This initiative is in line with other actions it has taken to try and reign in electricity prices in Ontario.
