European Fuel Poverty Coming to Manitoba?

Blog, Climate, Frontier Centre

If the provincial government’s expansionary plans for Manitoba Hydro are realized, the cost to poorer Manitobans may be measured by more than massively increased electricity bills, but also in deteriorated health and shorter lifespans.

Taking into account Manitoba Hydro’s basic monthly charge on residential customers, wherever they live or have a cottage, the charge for consuming a kilowatt hour of electricity works out to be about 7 cents. And, as to the rate applied to your monthly consumption, It doesn’t matter if your monthly consumption is 1000 kilowatt hours a month or 2000; it doesn’t matter when you use the power; nor does it matter what you use electricity for (lighting, computers, big screen televisions or heat).

The Utility’s sole ‘shareholder’, the Selinger NDP government, cloths itself in the robes of an environmentalist, worrying about climate change and eschewing  so-called ‘dirty’ power (anything other than hydro or wind generated electricity). At the same time, the government and its subject utility show little interest in steps taken by other electric utilities, both privately and publicly owned, to ‘move’ electricity consumption from the peak daytime hours (when demand and wholesale export and import prices are highest) to the evening and over-night hours (when demand and wholesale prices are lowest).

As well, neither the government nor Manitoba Hydro show much concern about the volume of consumption by any and all users, industrial or residential. While electric utilities in other jurisdictions charge more for higher levels of consumption, Manitoba Hydro doesn’t.  As well, the Utility makes no effort to ‘steer’ new residential housing towards employing natural gas for heating rather than electricity, even though natural gas heating is not only cheaper for the homeowner, but can reduce and defer the need for new high-cost dams and transmission.

In this Province’s laissez faire demand-friendly ‘environment’, what are the implications for ratepayers if the government’s reckless pursuit of new dams and Bipole III is consummated, and the cost of power to residential customers reaches or exceeds 20 cents per kilowatt hour?

The average monthly residential electricity bill for a home heated by natural gas would increase from, say, $80 to $240, while an average house employing electricity for heating would note an increase in its average monthly electricity bill from, say, $160 to $480. And, as these forecasted bills represent the average, imagine the bill for a poorly insulated house heated by electricity in the winter.  And, these higher numbers neither include provincial sales tax nor the City of Winnipeg’s 2.5 percent levy.

Imagine the impact of such bill increases on the spending power of average households? How about the impact on the residents of poorly insulated houses? What about the impact on lower income households?  Will it be food or heat, food or proper winter clothing?

Presently, roughly 30 percent of Manitoba households are considered to be lower income, what will the percentage of lower income households be if and when the average monthly electricity bill (for homes heated by electricity) closes in on $500?

Other jurisdictions, such as the United Kingdom, with high household electricity and energy bills, have noted significant reports of illness, hospitalization and even death among the elderly and poor, as they ‘turn down their thermostats’ in an effort to hold down their electricity bills. The policy has produced 30,000 extra deaths per year according to Dr. Benny Peiser, Director of the U.K. based think tank – The Global Policy Warming Foundation, recently interviewed by the Frontier Centre. High electricity bills may well hurt more than the pocketbooks of households, what about health care costs if the elderly and poor get sick in a futile effort to deal with high energy bills?

Is this to be the future that awaits Manitoba if the government’s Hydro expansion plans are realized? It most certainly is a possible future!

Currently, segments of Manitoba’s large industrial ratepayers express concern over bills based on rates that have been in the range of 3.5 – 4 cents per kilowatt hour. What will the firms’ view be when the average rate for these consumers of large amounts of electricity moves beyond 10 cents? Will they stay, will they expand, will new industry come? Could a slow growth economy that hasn’t seen a new industry in twenty years slow further?

(Looking into the future, while householders and business would moan over the cost of electricity, back on Broadway the money will roll in for the provincial government. The government’s coffers would swell through levies made on Manitoba Hydro – annual capital taxes, debt guarantee fees, water rental levies and provincial sales taxes could well bring in $1 billion, an amount to exceed the annual take from gambling and liquor combined. Where will the largesse be spent?

All ratepayers should stand back and think about the risk of their bills soaring, and how they will deal with it, before silently absorbing and accepting the government’s pro-expansion rhetoric.

Publius closes by reminding Hydro ratepayers, and the Manitoba electorate, that Hydro’s approach to recording expenses will delay the full cost of the gamble the government has Hydro taking being fully reflected in rates until at least two provincial elections have occurred.   By then, the die will have long been cast.