Bright Ideas from Toronto Hydro discloses they Failed Math

Parker Gallant has a new post at Energy Probe – examining Toronto Hydro’s cost claims.
Coincidentally, I had a blog post this week congratulating Ontario’s powers on making my Hydro One billing more honest; previously the metered usage was marked up 8.5% (which the stated was to account for line loss), but finally the billing is actually for what customers’ meters indicate.
The charge was unchanged, because the delivery charge just now contains the charge, instead of pretending usage was higher. There is a difference though.
Apparently the change was required to comply with measurement Canada rules – which are probably similar to rules in the U.S. If Ontario local distribution companies have been the only ones exaggerating the consumed wattage, then all the cost/kWh figures in Ontario have been understated in comparisons to other jurisdictions.

Bright Ideas from Toronto Hydro discloses they Failed Math

For the approximately 700,000 customers of Toronto Hydro who have either received or are about to receive their latest hydro bill they should pay attention to the brochure enclosed with the bill, titled, “bright ideas” and the subheading; “Electricity rates are rising. We want you to know why.”

The brochure is full of information bites and compares Toronto’s estimated monthly electricity bills with selected US cities, for 1,000 kWh, based on rates in effect April 1, 2013. The date picked was before both the last “electricity” rate increase of May 1, 2013 and the June 1, 2013 “delivery” rate increase imposed by Toronto Hydro, which another insert announced. Those two increases represent about $15 per month if added to the comparator bill but aren’t included. The comparison’s are to Chicago, Boston, San Francisco and New York city. The latter has the most expensive electricity rates in the contiguous US, San Francisco’s prices are 66% higher than the US average and Boston’s electricity prices 13% higher. Why not pick Atlanta, Miami or Minneapolis where the prices are below the US average. The comparison also wasn’t made to Montreal or Winnipeg where the rates are about half of what a Toronto ratepayer is charged. The estimate for Toronto is shown as $135.72 (excluding taxes) for one month.

Just to the left of the comparison chart is yet another Toronto Hydro factoid which is headlined; “The 1% you can’t live without”. This one states, “For most Canadian households, electricity makes up about 1% of the household budget.”.

So if one simply takes the information from the Toronto Hydro comparison chart that 1,000 kWh costs $135.72 for a month (as of April 1, 2013) that 1% would translate into a monthly household budget of $13,500 or $162,000 annually. A check of Statscan indicates median family income in Toronto in 2010 was $68,110 before income tax of $13,603. That would translate to 3% of the household budget of that median family’s total income on an after-tax basis and for single parent families (annual income of $39,340 in Toronto) would represent 5% of total income. At the $20,000 level you are in “energy poverty” territory which a report on the McMaster website indicates is 18% of Ontario’s population;

In Ontario, 18 percent of households are living below Statistics Canada’s Low income Cut-offs. “The average burden for the lowest income quintile households is 13.7 percent. This suggests that most of the lowest income quintile is currently living in energy poverty…”

One must assume a portion of Torontonians are at that lower level!

So who exactly is Toronto Hydro speaking about when they make that fictitious claim about the 1% of our household budget going to pay our hydro bill? The average income of the top 5 executives at Toronto Hydro  according to their annual report was over $500,000 so maybe they are using statistics of Toronto Hydro staff to make that claim.

By putting out this tailored information it seems they are trying to either colour the truth or incite an “Occupy Carlton Street” (Toronto Hydro’s Head Office) by those of us who don’t have the $162,000 annual “household budget” that they claim “most Canadian households” earn? The first time this writer “Occupied Carlton Street” at the Toronto Hydro head office was when Tom Adams and I, during a very cold day on January 16, 2012 protested their management.

 

Perhaps it’s time to repeat the exercise now that it is warmer!

Parker Gallant,

September 13, 2013

 

Parker Gallant is a retired bank executive and a former director of Energy Probe Research Foundation.  As with all independent bloggers on this site, his views do not necessarily reflect those of the Foundation.

 

 

 

Energy Probe

(September 13, 2013) For the approximately 700,000 customers of Toronto Hydro who have either received or are about to receive their latest hydro bill they should pay attention to the brochure enclosed with the bill, titled, “bright ideas” and the subheading: “Electricity rates are rising. We want you to know why.”

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