Fraser Forum

Electricity bills in Toronto remain high compared to U.S. cities

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A recent Fraser Institute study found average residential electricity prices in Ontario have skyrocketed since 2008. In particular, growth in electricity prices increased by 71 per cent from 2008 to 2016, far outpacing electricity price growth in other provinces. As a result, Torontonians pay the highest electricity bills nationwide.

But how do bills in Toronto compare to those south of the border?

Hydro Quebec data shows residents in Toronto pay US$142.46 per month for electricity (excluding taxes). In comparison, a study of 100 U.S. cities reveals Americans, on average, pay $134.58 (all dollar amounts in U.S. dollars) for monthly electricity bills. This means that average monthly electricity bills in Toronto are $7.87 higher than the average American price. More specifically, Toronto ranks 29th out of 100 U.S. cities in having the highest electricity prices.

The study’s worst performer is San Diego, California where residents pay $324.18 per month for electricity, whereas residents in Tacoma, Washington have the cheapest bills at $84.65 per month.

The data shows Torontonians pay higher electricity bills than Americans in Minneapolis, Baltimore, Columbus, Chicago, Tennessee, Indianapolis, Richmond, Louisville and more. And pay $21.93 more than their neighbours in Buffalo, New York.

Which raises the question—what caused such high electricity prices in Ontario?

The answer is that misguided policy decisions by the Ontario government. In particular, policies on renewable energy (wind, solar and biomass) have resulted in high additional costs for consumers. Other policy decisions such as poorly structured long-term contracts, the phase-out of coal energy and the contributions of green energy sources to the growing supply and demand imbalance in the province also contributed to electricity price increases.

It’s time the Ontario government pursue meaningful policy reforms aimed at lowering electricity bills for current and future ratepayers.

 

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