Since the Liberals took office, households in Ontario are now paying about $1,000 more on their electricity bills every year. This means the cost of running your fridge, doing the laundry, or washing dishes has gone up more than 200% in a dozen years.

Why is the cost of hydro so high?

How is it possible to use little or no electricity and yet have to pay through the nose for “delivery fees”? Is this all a government cash grab or is there some rationale to it?

We think Ontarians deserve an explanation.

We all understand that we have to cover the cost of telephone poles, transmission towers, and high-voltage lines. Building and maintaining these entail costs which most of us happily bear. But these costs don’t explain why hydro bills are so high.

We want to show you that most of the costs have nothing to do with the generation of electricity. The government has buried them within your hydro bill and expects you to pay them.

Extraneous charges are hidden under three lines in your hydro bill: “Electricity,” “delivery,” and “regulatory.” Let’s have a closer look at these.

ELECTRICITY

There is a charge for spilling water instead of running it through the turbines. There is also a fuel cost for the spilled water.

Ratepayers are even charged when wind power is not needed but could be generated by the province’s expensive wind developments. We also pay for the cost of meteorological stations used to estimate the number of kilowatt hours of electricity which those wind turbines might have produced.

You also pay for solar panels on your neighbour’s roof. Owners of solar panels are paid up to 80 cents a kWh, but only pay time-of-use rates for their consumption.

When power is sold off to other jurisdictions, you are charged for the difference between the cost of generating the power and the price at which it is sold. This means paying for places like New York and Michigan to take our surplus power. In 2015 this was enough to power two million Ontario homes.

DELIVERY

When electricity travels a long distance, a certain amount of power is lost. This can be anything from a 2% to a 9% loss. But you are still charged for that lost, unused power.

If you reduce your consumption, your local distribution company loses revenue. The OEB will grant a rate increase to cover the lost revenue which drives up the delivery cost even further.

You also pay for those $4 coupons enticing you to buy LED bulbs, and city-dwellers pay extra to subsidize delivery costs for rural and remote customers.

REGULATOR

The “regulatory” line on your bill includes operating costs of the Independent Electricity System Operator (IESO). The IESO contracted for wind and solar power generation. IESO’s management costs ($180 million) and development of the electricity grid ($1.5 billion) are also included. The costs to hook up your neighbour’s solar panels to the electricity grid are also included here.

None of this is fair.

If secret costs were attached to any other product or service, there would be outrage and the Competition Bureau would undoubtedly come crashing down on the offending company. Just think of a food store that charged you more for buying less milk, or a gas station that charged you for gas that you didn’t spill.

Despite government talking-points, Ontario is in the grip of an energy crisis. Tinkering around the margins isn’t going to help.

If we’ve shown anything here, it’s that Ontario’s electricity system needs a complete and fundamental overhaul.

— MacLaren is a member of the Ontario Progressive Conservatives and the MPP for Carleton-Mississippi Mills. Gallant is an energy watchdog and retired banking executive.