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Better Farming
December 2016
AteToday?
Thank a Farmer.
13
RISING
ELECTRICAL
COSTS
H
eeman’s Garden Centre and
Strawberry Farm east of
London paid on average 18.9
cents per-kilowatt-hour all-in (the
per-kilowatt-hour rates, delivery,
regulatory and debt-retirement
charges and HST) for the electricity it
received in April 2014.
Two years later, the farm was
paying 24 cents all-in for that same
kilowatt hour.
“If this was the cost of hydro, I
think we could, we would accept” the
price escalation, says Rudy Heeman.
He operates the popular agri-tourism
business his parents started in the
1960s with other family members.
“But when we see windmills going up
and shut down this plant and shut
down that plant and just waste
money, that’s when we really (ask),
‘Why are we paying this?’”
No matter where they are in
Ontario, farmers are seeing their
electrical bills soar. Anger mounts on
the province’s back roads. In Septem-
ber, despite recent announcements of
provincial measures to reduce hydro
bills, people attending the Interna-
tional Plowing Match and Rural Expo
in Wellington County expressed their
displeasure by booing Premier
Kathleen Wynne when she appeared
in the match’s parade. And signs
calling for the departure of Wynne
and her federal Liberal colleague
Prime Minister Justin Trudeau have
appeared along at least one main road
in Middlesex County.
Some businesses, including farm
businesses, are choosing to take their
expansions elsewhere. They implicate
high utility costs in their relocation
decisions. In January 2015, Leaming-
ton-based NatureFresh Farms, for
example, announced plans to develop
a 175-acre greenhouse in Delta, Ohio.
“Contingent upon acceptable levels of
incentives from the State of Ohio
(and) other government authorities as
well as utility rates agreeable to
NatureFresh, the company would be
poised to ship its first case of vegeta-
bles in December 2015,” the company
said in a news release at the time.
Patrick Jilesen, the Ontario Federa-
tion of Agriculture’s (OFA) direc-
tor-at-large and a Bruce County
sheep farmer who has close family
ties to the pork industry, says hog
producers tell him they will consider
other jurisdictions when they are
ready to expand. “The United States
has a better opportunity right now
than Ontario when it comes to
electricity and those kinds of energy
costs. That’s a huge factor for a lot of
operations.”
At issue are the peak rates charged
for power and the added costs of line
delivery to rural areas. Rates charged
in off-peak periods are similar to
rates found in jurisdictions such as
Michigan and Illinois, Jilesen says.
Peak demand rates, particularly in
time-of-use accounts, are there to
change behaviour when power is
consumed. Yet, in containment
livestock operations, “there’s no
opportunity to make that change, to
shift that demand,” he says. “In the
summertime, when it gets warm
during the day – and that begins right
away in the morning – those fans
come on. And there is no opportunity
for those animals to change their
behaviour. Quite frankly, it’s almost
inhumane to do that.”
The launch of Ontario’s carbon
cap-and-trade system will also drive
up energy prices even more, he
predicts. Under the trading system
that will launch in 2017, gas utilities
and other large-scale carbon emitters
must meet certain carbon caps or buy
emission allowances in auctions.
Already, gas companies are preparing
customers for higher bills. Union Gas
warns on its website of its intention to
pass the increased costs along to
customers.
Few see the recent round of
provincial measures intended to
address the problem as comprehen-
sive solutions. “There’s a strong
faction out there that is still telling me
the response that it’s too little, too
late, adding insult to injury, that sort
of thing,” says Ian Nokes, the OFA’s
energy and environmental economic
policy analyst.
Certainly at Heeman’s, the mea-
sures will produce negligible results.
A residential rebate of the province’s
portion of the HST doesn’t apply to
Hydro One’s general service energy
account, the catch-all business
classification that applies to Hee-
man’s. And because it’s classified as a
general service account, the business
also doesn’t qualify for the rural and
remote rate protection program that
offsets the far higher costs of deliver-
ing electricity to areas of low popula-
tion density. That subsidy, previously
$31.50 per month, increases to
roughly $55 a month, Nokes says.
Rural and remote rate protection
will apply to the 68,260 farming
accounts that fall under Hydro One’s
low-density residential classification.
(Hydro One defines these customers
as everyone who does not meet the
terms of urban and medium-density
zones: those who reside in areas with
fewer than 100 customers and “less
by MARY BAXTER
FARM NUMBERS IN HYDRO ONE CLASSES
Class
Number of farm accounts
Residential – urban
248
Residential – medium density
7,155
Residential – low density
68,260
General service – energy
9,557
General service – demand
720
Sub-transmission
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Numbers obtained from Hydro One