Monday, August 09, 2010

Powering your Home soon to become More Expensive

If you think your electricity bill is high now, wait a couple years. Electricity rates are set to skyrocket between now and 2015 for multiple reasons.

#1. Ontario Hydro's Debt

Ontario residents are being forced to pay off decades of debt incurred by the old Ontario Hydro during the 1980s and 1990s. Most of the debt is from building big expensive nuclear plants that went waaaaaaay over budget. And I am not talking like 10% over budget, I am talking like 400 to 800% over budget. The extra cost was incurred during the building process because the nuclear plants were built in remote locations, which made it more difficult to get supply trucks to carrying everything from wet cement, steel girders, etc. A lot of the time construction crews stood around waiting for the trucks to arrive, getting paid while waiting for materials to arrive (the same thing occurs when building / repairing a road, which is why you so often see crews just standing around waiting).

#2. Electricity isn't Cheap

Regardless of how electricity is made, it isn't cheap. There's always a huge financial cost. For decades now the province of Ontario has been subsidizing the cost of electricity by 50% or more. The 6.5 cents per kWh you pay is only half of the 13 cents it costs Ontario Hydro to make it.

#3. Exporting Excess Electricity No More

It used to be Ontario had extra electricity to go around so Ontario Hydro would sell it to Quebec, Manitoba and even across the border to the United States. Selling it would make up part of the price, but now we have a shortage of electricity and exporting it is no longer wise or profitable.

#4. New $4 billion Power Lines

The Ontario Power Authority estimates Ontario needs to spend $4 billion on new high-voltage transmission lines over the next 10-15 years. This will add more to the cost of electricity in Ontario.

#5. Coal-Burning Plants being Shut Down

Ontario is set to phase out coal-burning plants over the next couple of years as more wind and solar projects come online. Coal isn't cheap, but it is cheaper than other options available. Shutting down coal plants however will single-handedly cut Ontario's CO2 production by 35% once they've all been phased out.

#6. Fixing Old Nuclear Plants

Old and aging nuclear plants need to be shut down periodically, cleaned, repaired and retrofitted. This is a very expensive process, but its a necessity to keep them running perfectly and within safety limits.

#7. Toronto Expected to Pay Extra

There is a plan in the works to scrap building a big major power line into Toronto. This extra power line would allow extra power to be brought into Toronto and would keep electricity rates in Toronto stable by increasing the amount available. With that power line being scrapped Torontonians will have a shortage of electricity and will be either facing brownouts or see their electricity rates go up (and the people who can't afford the higher rates will have to find ways to cut back on their usage).

Now why am I so worried about all this...?

Truth be told I don't think I use that much electricity. True, I do leave the AC on all the time, but beyond that I just have my computer, a TV, a fridge, a freezer, a microwave and a few small appliances like my alarm clock. If I was forced to be frugal I don't think the TV or microwave need to be plugged in all the time, and the AC could certainly be turned off more often or even permanently.

Thus in my mind, switching to a solar panel/wind turbine with a battery backup system is not only practical, but cheaper. I know enough about the topic that I could do it on a budget (as per someone equipping a cottage up north) rather than the big expensive $30,000 ones that some people install... because they want their solar panels to be top-of-the-line and have excess power to be fed back into the grid...

Myself, I'd rather cut myself off from the grid. Your property taxes are much lower when you are off the grid and its worth it in my mind to be completely independent. The cost of buying all the necessary equipment and battery storage is offset at a faster rate because you're no longer paying taxes just for being attached to the grid.

1 comment:

  1. I agree with you. I'm not sure how to go off-the-grid in the city (or even if it's allowed), but I am moving out of the city in the next couple of years to build my own off-the-grid house. Very nice blogs you have!



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