With news Friday that the Ministry of Energy will not give Fort Frances residents the benefit of the province-wide freeze on the price of electricity purchased on the spot market, NDP leader and local MPP Howard Hampton said he wasn’t surprised by the decision.
“This is unfair for the people of Fort Frances,” he argued. “I’m going to write the Ministry of Energy. But I already know what the answer is—‘Too bad, so sad. Fort Frances used to receive lower rates, now they don’t.’”
Hampton said the reasoning behind the government’s decision was simple. “The Conservative party is still marching down the road to privatization and de-regulation,” he charged.
“They’re doing a glue and paste job to try and hide from people just how expensive having a privatized market is with the 4.3 cent/kWh cap,” added Hampton. “If they get re-elected, the 4.3 cent/kWh rate will disappear.
“I repeat what I’ve been saying for the past two years—privatization is going to hit people in the pocketbook. I would end it, full stop, if I could,” he concluded.
The ruling, which had been contested by the Fort Frances Power Corp. (FFPC) and the town since January, will see FFPC customers paying a blended rate of the fixed contract price and the spot market price for electricity that will not rise above 4.3 cents/kWh.
But this rate ignores the 1.23 cents/kWh condition of the power agreement the FFPC has with the mill.
While local consumers are protected from having total bills which are higher than elsewhere, it still deprives them the benefit of the mill contract that has been in place for almost 100 years.
It also makes them the only customers in the province with bills higher than they had before the market was opened to competition last May.
“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,” he added.
FFPC CEO Mark McCaig said town residents 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 remarked.
“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 McCaig met with ministry officials to point out the dramatic rate increases experienced by town residents since last May.
The fact local residents now will be the only consumers paying higher prices than they were paying before market opening also will hurt the town’s ability to attract business and investment.
“It has always been a challenge to explain to people the benefits of locating in this area,” said Mayor Witherspoon. “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,” the mayor stressed. “This is a decision which hurts the people of Northern Ontario in many, many ways.”
Town residents have been the beneficiaries of a contract with the local pulp and paper mill here 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, hydro customers in Fort Frances saw their electricity bills rise as the spot market price soared after the market opened.
In November, Premier Eves announced the price paid by consumers for power purchased from the IMO would be capped at 4.3 cents/kWh—and that consumers would receive rebates to make the price cap retroactive to May, 2002.
But when the regulations implementing the price cap were tabled, they simply exempted the FFPC, denying the 4,000 FFPC customers the $75 rebate and forcing them to pay the spot market price even if that price is higher than 4.3 cents/kWh.
No mechanism has been put into place yet to bring into effect the limited protection to FFPC customers offered by the ministry.
Fort Frances Times
Local News from Across the Rainy River District
