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Rising electricity costs hit Quinte

Parsons Cleaners and Launderers is just one local business affected by the rising cost of electricity. Photo by Mark Hodgins [1]

Parsons Cleaners and Launderers is just one local business affected by the rising cost of electricity. Photo by Mark Hodgins

By Mark Hodgins [2]

BELLEVILLE – Electricity prices continue to trend upward in Ontario, and local businesses and manufacturers are feeling the pressure.

The increases in electricity costs have happened incrementally over the past decade. In 2004, electricity costs were set at a flat rate of less than five cents per kilowatt hour. By Nov. 1 of last year, the price had skyrocketed to 17.5 cents per kilowatt hour during peak times – that is, from 7 to 11 a.m., and 5 to 7 p.m.

Then, on Jan. 1 of this year, the government of Ontario did away with its clean energy benefit, a 10-per-cent credit on hydro bills.

And that’s not all.

Hydro One is increasing its distribution fees by 1.9 per cent on Feb. 1, meaning its customers will see yet another increase.

Eric Hamilton, owner of Parsons Cleaners and Launderers in Belleville, says his business has had to make some changes to combat the rising expense.

“We’ve had to increase prices to cover it,” admitted Hamilton. “So the consumers are paying for it, I guess.”

Hamilton has owned the cleaners for seven years, and says he doesn’t anticipate the prices will stop rising anytime soon.

Prince Edward-Hastings MPP Todd Smith, who’s the provincial Conservative critic for the government’s planned sale of Hydro One [3], says the rise in prices has been significant.

“Ten years ago we were paying the lowest electricity prices per kilowatt hour in North America,” said Smith. “Now we’re paying the highest.”

In the last five years, Smith said, the cost of electricity has gone up by over 70 per cent.

“I’ve been to a number of meetings with the local chambers of commerce and the Quinte Manufacturers Association, and they’re all saying the same thing: their biggest concern right now is the soaring cost of electricity,” said Smith. “It’s making them extremely noncompetitive in this global market.”

Mike Hewitt of the Quinte Manufacturers Association echoed those sentiments: “As energy costs go up, it costs the plants more to run. So that’s not a favourable situation to have in place.”

The association is a group made up of the 110 manufacturers in the area. Its goal is to have the companies work together to improve their competitiveness and support one another.

Manufacturers in the area are doing what they can to combat the higher hydro expense, Hewitt said.

“A lot of our plants are doing energy-efficiency programs to try to reduce that. So as the costs go up it pushes them into even more action on looking at ways to keep the plants viable here.”

MPP Smith said it’s a serious problem.

“You’re talking about factories that, in some cases, five years ago had a monthly electricity bill of $180,000,” he said. “Suddenly you’re looking at $300,000 a month for electricity. So it’s certainly affecting the bottom line.”

Hewitt said that while the Quinte Manufacturers Association does meet with electricity companies to acknowledge the challenges presented by the higher costs, the group tries to make sure that any shift in costs doesn’t further affect the residential sector.

“Those are the people that work in your plants and buy your products and everything else,” Hewitt said. “It’s not fair to turn around and just shift that burden onto somebody else.”

As far as plants remaining viable in Quinte, Hewitt didn’t seem too worried.

“They’re pretty darn good at it,” he said with an optimistic chuckle. “So we’re pretty lucky on that standpoint.”