FOR IMMEDIATE RELEASE:
(TORONTO) May 24, 2017 – The Financial Accountability Officer of Ontario, Stephen LeClair, has just released An Assessment of the Fiscal Impact of the Province’s Fair Hydro Plan, a report that reviews how Ontario’s Fair Hydro Plan (FHP) will impact electricity ratepayers and Provincial finances.
The FAO estimates that the FHP will cost the Province $45 billion over 29 years while providing overall savings to electricity ratepayers of $24 billion. This results in a net cost to Ontarians of $21 billion.
Under the FHP, average electricity bills are projected to decrease by 25% in 2017, followed by four years of growth at the rate of inflation. Starting in 2021, electricity bills are projected to increase by an average of 6.8% annually until the end of 2027. After 2027, electricity bills are projected to be an average of 4% higher under the FHP than the status quo.
The estimated $45 billion cost to the Province assumes that the Province is able to achieve and maintain a balanced budget over 29 years. If the Province is required to fund the FHP through debt, then the cost to the Province could increase to between $69 billion and $93 billion.
“Temporary savings are achieved for electricity ratepayers by moving costs to the Province and by deferring $18.4 billion in electricity costs for 10 years,” says Mr. LeClair. “After 10 years, ratepayers will be required to repay the deferred electricity costs plus approximately $21.0 billion in interest which will result in higher electricity bills than under the status quo.”
Read the FAO’s report here.
About the FAO
Under the Financial Accountability Officer Act, 2013, the Officer provides independent analysis on the state of the Province's finances, trends in the provincial economy and related matters important to the Legislative Assembly of Ontario. Visit our website at http://www.fao-on.org/en/ and follow us on Twitter at https://twitter.com/InfoFAO.