At first glance, I admit this seems like a bit of a rip-off:
Toronto residents and businesses have taken to the idea of saving electricity – so much so that Toronto Hydro-Electric System Ltd. is looking to raise rates to cover a $10.4 million decrease in revenue.
… The hike is needed to cover a $10.4 million loss in revenues associated with conservation programs that began in 2005, including last year’s summer challenge, which offered hydro customers a 10 per cent credit on their fall bill if they cut electricity use by 10 per cent over two months, according to the utility.
Here’s the Toronto Hydro-Electric announcement. In Ontario, local electricity utilities (which are often municipally owned, as this one is) look after the transmission wires that get power into homes and businesses; generation is somebody else’s problem, and bill.
So my immediate reaction was that this was like the way the Toronto Transit Commission was run for ages: when ridership went down, the TTC hiked its fares to make up for the lost revenue, then acted all confused when ridership went down again. Here, it looked like Toronto Hydro-Electric was screwing the very same people it spent last summer trying to encourage to use less electricity.
But not quite. Getting more people to take transit is a good thing, from the municipality’s perspective; here, the city ultimately wants people to use less electricity, not just as a social goal but because electricity distribution is a messy, nasty, expensive business. Toronto’s downtown power grid is stretched to the max, so much so that they’ve contemplated putting a new generating station downtown because they can’t figure out how to increase transmission capacity from stations far away. Honestly, even the utility paid to move electricity really does want people to use less of the stuff, so hiking prices as much as it can makes sense.
More importantly, as a matter of principle, the fact there’s less strain on the system because Torontonians are using less power doesn’t mean the costs of maintaining the system that exists have gone down. The people who are still hanging heavily on the grid will pay more for the shared service they’re using a greater proportion of than ever, while the people who have reduced the pressure they put on it will notice the price hike a lot less.