Energy price hikes coming

With the Ontario Energy Board announcing yesterday that higher power rates are on the way, the Fort Frances Power Corp. is telling its customers they soon will see changes to the “electricity” and “delivery” portions of their hydro bills.
But thanks to a successful application for an electricity distribution rate adjustment last fall, FFPC customers will be feeling less of a sting than those elsewhere.
FFPC president and CEO Jim Kibiuk explained this morning that after May 1, under the Regulated Price Plan (RPP), all Ontario residential customers who use an average of 1,000 kilowatts/month will see an electricity price increase on their bill of 18.5 percent, which will result in an average total bill impact of a 9.3 percent increase for FFPC residential customers.
These charges are not determined by—or controlled by—the FFPC and are separate from any rate adjustments the FFPC has applied for to the OEB.
Customers will notice the RPP changes to the “electricity” charge line on their bill.
When setting the new RPP rates, the OEB takes into account a forecast of the prices paid to electricity generators for the next 12 months and the outstanding balance in the variance account, which has been tracking the difference between what has been paid and what it costs to generate the electricity used since April 1, 2005.
This information then is converted into the prices paid on the “electricity” line of the customer’s bill.
The OEB will begin to reset RPP prices more frequently (every six months) to reflect the actual amount paid to generate the electricity used while continuing to “smooth” electricity prices for protection from day-to-day volatility.
As far as distribution rate changes, Kibiuk noted the FFPC applied to the OEB for a 2006 electricity distribution rate adjustment in October, 2005, and the application was reviewed through a public process.
As a result of that, the FFPC electricity distribution rate to residential electricity customers who use an average of 1,000 kilowatts/months will see a 3.9 percent decrease to their distribution rate.
As a result, the total bill impact of the combined 9.3 percent RPP increase and the 3.9 percent distribution rate decrease, a FFPC residential customer who uses an average of 1,000 kilowatts/month will see an average 5.4 percent hike on their bill.
“We’re extremely please that our distribution company has managed to keep our distribution rates low through a rate decrease, thereby minimizing the impact of the increased cost of electricity under the RPP,” said Kibiuk.
“At a time when the commodity price is increasing, our company is working hard to control our costs and distribution rates on behalf of all our customers,” he added.