What's Left 2017-03-05 Volume 89

2017-03-06

Electrical Energy in Ontario; Let's talk: Québec's non-partisan effort to find solutions for a better province; Uber is a terrible company; What we shared this week.

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“FEATURES”

Electrical Energy in Ontario

A couple of weeks ago, the Ontario NDP announced their plan to reduce electricity rates in the province. The plan is based on the understanding that privatization has driven the rise in electricity rates. The NDP is not wrong, privatization has been the major driver for increased costs over the previous decades – ever since the Tories under Mike Harris broke-up Ontario Hydro.

The NDP has promised to cut hydro rate by 30% as part of plan they are calling “Own More, Pay Less”. It is rather complex, but includes the following measure:

Return Hydro One to public hands. - Spend the current dividend buying-up shares. - Set-up expert panel to examine ways to bring the company under public ownership.
Negotiate removing the federal HST portion off hydro bills.
Flatten delivery costs between rural and urban.
End mandatory time-of-use billing.
Make the elimination of the provincial portion of HST off hydro bills permanent.
Cap net revenue for private hydro firms at 3%.
Renegotiate or cancel contracts with private electricity providers.
Reduce Ontario Power Generation’s (OPG) water rental rates (these are fees currently paid by OPG to the province for water flowing through dams).
Reduce over-supply.
Import cheaper energy from Quebec and Manitoba.

Most of these would result in a reduction in the rates that consumers would pay over the next 30 years, but there are some important considerations that need to be taken into account.

First, the expert panel for bringing hydro back under public ownership and control should have a broad enough mandate to consider and recommend changes for the ownership structures of generation across the province and not just target Hydro One, which is a transmission and distribution company.

Second, bringing rates down will require a significant re-examination of the relationship between the provinces local distribution companies (LDCs) and the provincial companies Ontario Power Generation (OPG) and Hydro One. This would have to include how to finance future generation capacity throughout the province.

Liberal Plan

In response, the Ontario Liberals scrambled to announce their own plan to cut 25% off monthly hydro bills. The Liberal plan is not complex and is a collection of tax-funded subsidies.

The Liberals are calling their plan “Ontario’s Fair Hydro Plan”. However, 8% of the rate reduction is through the elimination of Ontario’s portion of the GST which is a measure that was already announced. The rest of that 17% comes from amortization of 20 year to 30 year power procurement contracts for private power producers. This would reduce the yearly costs of these contracts, but because of the way the Liberals have chosen to pay for this refinancing, it will cost $800M extra a year in interest.

In addition to the debt-financed reduction in monthly rates, the Liberals have also offered income-related subsidies on top:

Low-income households will receive a 50% increase in supports for those who heat with electricity from $35 to $60 a month.
An Affordability Fund will be established which will: - enhance the existing Ontario Electricity Support Program (OESP) for LDC customers ($180 to $276 per year); - include a Rural or Remote Rate Protection (RRRP) program affecting 800,000 electricity users; and - provide on-reserve First Nations households with a 100% credit for the delivery portion of their bill.

The Liberals have also said they would examine a Time-of-Use pricing opt-out.

Analysis

Both the Liberals and ONDP promises for rate reductions come from increased public broader tax-financed subsidy to rate payers. However, there are major differences.

While not perfect, the ONDP would spend public money over the longer term to (re)build public ownership and thus end up saving rate-payers and the province money over the longer term. That means that any rate subsidy would pay for itself. The ONDP plan would also fix some of the fundamental problems with the Ontario electrical system and leave more room for progressive electricity policy in the future.

In contrast, the Ontario Liberals are simply subsidizing rates from general revenue and borrowing from the future to subsidize the present. The method of borrowing will extend the contractual obligation for buying privately owned and generated electricity and could either reduce or increase the actual cost to rate-payers over the 30 year contracts – depending on the unreleased details.

The Ontario Liberal plan increases the province’s dependence on privately owned electricity generation and enforced monopoly pricing schemes. It is, in fact, a doubling down on the status quo.

The real issue is the focus on rates. This leads to a distortion of the actual issues driving electricity costs in Ontario. Rates have become a distraction. Contrary to news reports, Ontario does not have the most expensive electricity in North America. In fact, it has some of the lowest rates in the world. Ontario’s average electricity rate is about 14 cents per kWh. This translates to about 10 cents per kWh in US dollars.

This does not mean that rates are not too high or that the electricity system is working as efficiently as it could for the people of the province. Ontario – and most of Canada – have the advantage of being able to produce very cheap electricity.

Unfortunately, Liberal and Conservative governments have both increased the fragmentation, privatization, corporatization, and marketization of the electricity system. Decisions including breaking up of the publicly owned Ontario Hydro, deregulating the electricity market, allowing private companies to profit from electricity sales, and using rate-subsidization to pay for the expansion of solar and wind generation have eliminated many of the advantages Ontario should have around electricity.

As with many things of a monopoly and utility nature, the socialist answer of publicly owned utilities has been shown to be the best. No surprise to anyone here.

Let’s talk: Québec’s non-partisan effort to find solutions for a better province

February marked the culmination of an interesting project developed over the last few months in the province of Québec. Launched in September, the initiative called Faut qu’on se parle (Let’s talk), organized regional consultations and kitchen-table style conversations in different regions of Québec. The initiative was aimed at examining the direction Québec seems to be headed, and to allow the province’s citizens to be involved in identifying the issues and solutions.

The group who spear-headed the initiative includes some high-profile names, but was careful to brand itself as non-partisan. It included: former student movement spokesperson Gabriel Nadeau-Dubois, playwright Véronique Côté, Indigenous rights activist Maïté Labrecque-Saganash, civil rights activist Will Prosper, and several other activists and public personalities.

While the tour scheduled 10 regional public consultations, the panel also encouraged the population to invite them over for kitchen-table conversations with smaller groups. The panel thought they would schedule roughly 50 of these events, but they ended up holding more than 170 across the province.

There were 10 primary questions that panel wanted to get answers to as a way of starting conversation with the people of Québec:

Democracy: how can we take back power? 2. Economy: how can we develop a Québec based on our priorities? 3. Regions: how can we make our communities more vibrant? 4. Independence: how can we move forward? 5. Education: how can we make sure everyone can reach their full potential? 6. First Nations: how can we build solidarity? 7. Diversity: how can we live together without racism or discrimination? 8. Culture: how can we ensure a vibrant artistic creation and make sure everyone has access to it? 9. Health: how can we take care of everyone? 10. Climate: how can we kick-start the transition?

They have compiled the highlights of what they heard during the process in a new book called Ne renonçons à rien (Let’s not concede anything). It’s an essay that showcases the testimonies from the tour, and casts an optimistic look at what Quebec can and should be. The title is meant to remind people that even in hard times, people must remember where we came from, not concede anything we have gained, and not concede our hopes for the future in the battle for what we can become as a nation.

The process was innovative, led by citizens instead of political parties, and lays the foundations for a grassroots political program for the coming years in Québec.

• Faut qu’on se parle

• Ne renonçons à rien | Lux Éditeur

Uber is a terrible company

Uber’s disdain for offering fair wages or benefits to its drivers has been well documented, but recent developments have shown a spotlight on just how toxic it is within Uber itself. Workers are treated poorly, encouraged to undermine each other, and female workers in particular have to put up with constant harassment – which, when reported is dismissed and silenced by Uber’s management and human relations department. Susan Fowler dealt with these abuses first-hand and recounts here experiences on her blog. There is simply no justification for using the service.

• Reflecting On One Very, Very Strange Year At Uber

• Billionaire Uber CEO Yells at Bankrupt Driver: ‘Some People Don’t Like to Take Responsibility’