Fort Frances residents left out in the cold

The Town of Fort Frances announced yesterday that the government of Ontario has decided not to give town residents the benefit of the province-wide freeze on the price of electricity purchased on the spot market.
“The Government felt that because our residents get some benefit from the mill contract, that somehow should disentitle them to the protection everyone else gets from soaring market prices,” said Mayor Glenn Witherspoon.
“We have never been provided with an explanation of why this was done. It is discriminatory and penalizes the people of Fort Frances for no good reason.”
Fort Frances Power Corporation CEO Mark McCaig remarked that the residents of the Town are doubly hurt by this decision. “People have made investment decisions and selected electric heating because the benefit of the mill contract made electricity more affordable here,” he said.
“The effect of this decision is to deprive these consumers of the benefit of the mill contract, and saddle these high use consumers with the highest electricity rates in the province. It’s unfair,” added McCaig.
The government refused to change its mind even though Mayor Witherspoon and Mr. McCaig met with ministry officials to point out the dramatic rate increases experienced by the residents of the Town of Fort Frances.
The fact that Fort Frances residents will now be the only consumers paying higher prices than they were paying before market opening will hurt the town’s ability to attract business and investment.
According to Mayor Witherspoon, “it has always been a challenge to explain to people the benefits of locating in this area. It will be considerably more difficult if we can no longer offer the benefit of the lower electricity prices resulting from the mill contract. Premier Eves, has with his decision, severely hampered our economic development efforts. This is a decision which hurts the people of Northern Ontario in many, many ways.”
The residents of the Town of Fort Frances have been the beneficiaries of a contract with the local pulp and paper mill in Fort Frances for almost a century. The contract provides the Town of Fort Frances with a significant amount of electric power at a very beneficial price.
The town’s remaining power needs are purchased from the Independent Electricity Market Operator (IMO) and have been purchased, since the electricity market opening on May 1, 2002, at the spot market price. Like everyone else in Ontario, the residents of Fort Frances saw their electricity bills rise as the spot market price soared after the market opened in May, 2002.
In November, 2002, Premier Eves announced that the price paid by consumers for power purchased from the IMO would be capped at 4.3 cents per kilowatt hour, and consumers would receive rebates to make the price cap retroactive to May, 2002.
When the regulations implementing the price cap were tabled, they simply exempted FFPC, denying the 4000 FFPC customers the rebate and forcing them to pay the spot market price even if that price is higher than 4.3 cents per kilowatt hour.
As a result, the residents of Fort Frances continue to pay the true spot market price for electricity coming from the IMO, which has at times exceeded 10 cents per kilowatt hour, while other Ontario residents pay no more than 4.3 cents per kilowatt hour for energy purchased from the IMO.