Hydro cap means little change here: McCaig

A provincially-directed cap on the cost of electricity announced last week will mean a big break in costs to hydro customers across Ontario come Dec. 1.
But Mark McCaig, CEO and president of the Fort Frances Power Corp., said it only means customers across the province will be getting the same break customers in town have been enjoying all along since the electricity market opened to competition in May.
“The government is encouraging all utilities to be not-for-profit. The FFPC is one of the only, if not the only, one to go not-for-profit from the start,” McCaig noted.
“We’ve always been concerned about how much our customers pay.
“Unlike many of the utilities elsewhere in the province, this is not going to be of any big importance to our utility right now,” he added.
The price cap—which won’t be reflected in bills until January or February—ensures customers won’t have to pay more than the 4.3 cent/kW hour rate until 2006.
McCaig said this idea of a price cap is similar to the FFPC’s agreement with Abitibi-Consolidated with a monthly credit to customers and a year-end true-up, where the FFPC divvies up money in the power agreement account with customers in the form of rebates on their bills.  Also part of the province’s announcement is the fact Ontario hydro customers will get a minimum $75 rebate for the high costs they’ve had to endure this fall, returning the difference paid whenever the rate shot above 4.3 cent/kWh.
“As soon as the legislature is passed, and we get the government’s direction, we will deliver the rebate to our customers,” said McCaig. “Everybody’s going to get a rebate, some more than others.”
The reason for the 4.3 cent/kWh cap is that’s the price that existed before May 1, when the Conservative government opened the electricity-generation market to competition.
“It is unacceptable that families are being hit with hydro bills they can’t afford and businesses are facing cost increases significantly larger than they can handle,” Premier Ernie Eves had said last week.
“From now on, the only time your electricity bill will go up is when you use more power,” he added.
Premier Eves also reassured consumers that no one would have their hydro cut off until at least March 31 for failing to pay their bills.
Hydro prices in Ontario soared with the unusually hot summer and tight supplies. In some cases, bills doubled, although the average wholesale price is up about 23 percent since the market opened.
Premier Eves said the money for the rebates, which will start going out before the end of the year, will come from a pool of $700 million known as the consumer protection fund.
The province’s publicly-owned utility, Ontario Power Generation, has been setting the funds aside from the money it collects from consumers in anticipation of paying rebates.
—With files from Canadian Press