TORONTO, ON --Ontario electricity consumers surprised by the size of their latest bills have worse in store: Prices in September outstripped the highs rung up during the heat waves of July and August.
September's huge power bills are already creating a billion-dollar strain on local utilities — which must pay cash for most of the power used in the province before collecting from their customers.
September figures released by the Independent Electricity Market Operator, or IMO, show the average weighted price of electricity climbed to 8.31 cents a kilowatt hour in September. That's up from 6.97 cents in August and 6.2 cents in July. In May, by contrast, it was only 3.01 cents.
Prices were pushed up in September by hot weather early in the month that boosted demand for air conditioning.
Meanwhile, an increasing number of hydro generators were shut down for scheduled maintenance during the month.
Customers without fixed price contracts pay the market price for the energy portion of their bill; those with a contract pay the fixed, contract price.
Both sets of customers pay additional charges for basic service, for use of the wires that deliver electricity to their homes and businesses, plus a charge to repay the old Ontario Hydro debt.
The high September prices will land on consumers' bills over the coming 60 days.
But those bills have already hit the province's local utilities, which must pay cash to the IMO today for power that flowed through their wires in September.
Local utilities in the province were collectively billed $1.1 billion for power in September, says Charlie Macaluso, chief executive of the Electricity Distributors Association, which represents local utilities.
Under the old system of regulated prices, the utilities would have been billed no more than $450 million for a high-usage month, Macaluso said in an interview.
September's whopping bill follows bills of about $860 million in August and $800 million in July.
Since it takes up to 60 days to issue bills and collect payment, Macaluso said local utilities are seeing increasing amounts of working capital tied up in financing receivables.
Source: Toronto Star
