Higher Power Prices After Coal Plants Close Likely Cost of Clean Air: McGuinty

By CHINTA PUXLEY

TORONTO (CP) – Ontario residents may have to pay higher electricity rates when the province closes its coal plants, but that’s the cost of cleaner air, Premier Dalton McGuinty said Wednesday.

A CIBC report is predicting electricity costs could rise up to 70 per cent when Ontario mothballs its four coal-fired plants but McGuinty said that pales in comparison to the cost of doing nothing about global warming.

“The single greatest contributor to greenhouse gases in the province of Ontario is coal-fired generation so we’re going to do something about that,” McGuinty said.

“It’s almost impossible to predict where electricity prices will end up but we know that if we do nothing, the cost of global warming will be very high. We will continue to assume our responsibility and . . . shut down our coal plants.”

The Liberals promised to close the province’s coal-fired plants by 2007 when they were elected four years ago but have since pushed that date back until 2014.

They have now drafted a regulation to close all its coal-fired plants by New Year’s Eve 2014 which means any subsequent government will have to change the law if it wants to keep the plants open.

In the meantime, McGuinty said the province is making it easier for people to cut their electricity bills by becoming more energy-efficient. The province has introduced a temporary tax rebate on energy-efficient appliances and a $5,000 contribution towards home retrofits, he added.

“When it comes to electricity costs it’s not purely a function of the rates of electricity but how much electricity are you actually using,” McGuinty said.

“We’re creating all kinds of new opportunities for Ontarians to use less electricity in their homes.”

The CIBC report, by senior economist Benjamin Tal, warns higher prices will likely be what drives Ontarians to conserve energy. Ontario residents will see higher electricity bills because the province will have to switch from cheap coal to volatile natural gas, Tal predicted.

“We estimate that by the time the last coal-fired plant is closed, electricity prices in Ontario will be 60 per cent to 70 per cent higher than they are now,” Tal stated in his report, adding prices will likely rise from 4.8 cents a kilowatt hour to 8 cents.

“Phasing out coal in Ontario by 2015 will be challenging, but it’s feasible.”

But Jack Gibbons, chair of the Ontario Clean Air Alliance, said soaring electricity costs are by no means a given when the province closes its coal-fired plants.

The province will be relying on a mix of energy to replace coal including renewable sources, water and nuclear, he said. Although natural gas is part of that mix, Gibbons said it will likely only make up 18 per cent of Ontario’s energy.

But he said the province will have to make a serious effort to promote conservation if it wants to keep prices reasonable.

“Energy conservation is the lowest cost option to meet our electricity needs,” Gibbons said. “If we aggressively promote energy conservation, we can actually reduce our electricity bills.”

New Democrat Paul Ferreira said phasing out coal won’t mean higher electricity bills if the province focuses on increasing the supply of greener energy, adding that very little renewable energy is being used right now, he said.

“If we can invest and increase the supply, I think prices will come down.” Ferreira said.

Conservative critic John Yakabuski said the province should be putting scrubbers on the coal plants which would help clean up the air and keep electricity flowing while it figures out a more responsible way to phase out the plants.

“We’re going to at least clean up those coal plants while they operate,” Yakabuski said. “Dalton McGuinty never had a plan in 2002. He doesn’t seem to have a plan now.”