Why is hydro up when oil’s down?

February 17, 2016   ·   0 Comments

Congratulations to my friend Pat Hamilton for being recognized as one of the top 40 principals in Canada.  It doesn’t matter who you talk to, teachers he has worked with, former or current students, they all say the same thing.  He is a great educator because of his commitment and care for his students. 

Way to go Pat, for setting such a great example for all educators!

Now, like many I’ve been enjoying the “bargain” that we’ve been receiving at the gas pumps.

  If it wasn’t for the great Disney trip of 16 and the crazy exchange we might have even come out ahead on the deal.

Before we get too carried away on how cheap gas is though shouldn’t it be even cheaper?  I filled up our van in Buffalo last week (don’t tell Canada Customs we aren’t home yet) for $25.50. 

That’s about half what we’d pay here and even with the exchange factored in a great bargain.  At other places along we’ve seen prices that equate to roughly 60 cents per litre when considering the exchange.

Now I know a big part of the issue are the exorbitant taxes and taxes upon taxes that we pay on fuel.  Even with those factored in though shouldn’t we be paying somewhere in the neighbourhood of 75 cents per litre?  I know gas is always cheaper in Alberta and it should considering the transportation costs but the prices in the mid to high 60 cent range are a far cry from what we’re paying.

I’ve also noticed a decline in the price that I’m paying for the natural gas we use to heat our home.  I’m sure it will decline further as there is always a lag between a change in the world price of oil and what we pay at home.

What we save there, though, is still small change compared to what we’re saving at the pumps, I mean should be saving at the pumps.

Now there’s still an area of the energy realm that we haven’t covered, and that’s hydro rates.  I’m sure like me you’ve noticed a higher total on your most recent bill. 

That’s quite a trick on its own with the removal of the debt reduction charge.  I know we’ve lost a discount also but I think I’m going to have to pursue a PhD to understand it properly.

What I do know is that we are paying way too much for hydro, and not by a little bit. 

Now before you think I’ve gone off on some wild tangent this does relate back to the price of oil if you follow along just a little further.

Do you remember all of the ruckus about cancelling the gas fired power plants in Oakville and Missisauga?  Do you remember all of the stories about getting rid of our dirty coal plants?  All of the stories about feed in tariffs and the like? 

Now I don’t want your blood pressure to rise by bringing back those fond memories but stay with me here.

The result of all that is that the vast majority of our electricity is now generated by natural gas.  So then I ask myself, if the price of natural gas is going down why are hydro rates going up?

Now I’m sure there are long term contracts for natural gas that factor in  so it will take a while for it to filter down to us lowly consumers. 

Pardon me if I’m a skeptic but maybe I should be saying “if” that filters down to us lowly consumers.  This government has done such a swell job managing the energy file I’m sure we can trust them. 

I have no doubt whatsoever that those savings will be for our benefit and not say line the pockets of those new wpurchase shares in our utility.

To me it just doesn’t follow logically.  The price of oil goes down but the cost of hydro goes up?

By Doug Harkness

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