Coming cleaner on hydro

The Globe And Mail: David Oxtoby - January 11, 2010

Toronto -- There's no question the price of electricity in Ontario will rise, since clean energy costs more than burning coal in fully depreciated plants (The High Cost Of Green Power - Jan. 8). The appropriate comparison, however, is against prices that will rise over the long term.

Taking solar power as an example, many U.S. states are increasing production incentives, paid for by utility customers. System buyers also benefit from a U. S. federal investment tax credit equal to 30 per cent of installed cost - an incentive shouldered by taxpayers and excluded from price comparisons.

In the challenging realm of electricity price-setting, the Ontario government has made some good decisions. Electricity prices are market-based, with the costs of transitioning to cleaner sources clearly known and paid for by electricity users.

Decades ago, with our nuclear program, Ontario persistently held grid rates below the true cost of generation. Elected officials wooed voters with inexpensive hydro rates, a practice that collapsed in 1999, leaving taxpayers with $20.9-billion of "unfunded" utility debt.

Ontario has learned that electricity costs should be borne by users, not hidden away to be foisted on future taxpayers. The shift to cleaner energy will increase electricity prices somewhat, but in a way that keeps Ontario competitive and creates anything but "a time bomb."

CEO, CarbonFree Technology Inc.