Ontario Electricity Rates and Natural Gas Prices

I've read recently about electricity prices in the United States trending down due to ridiculously low prices for natural gas, low enough to even displace coal. Anyone living in Ontario knows that prices here have been rising steadily above inflation for years and seem destined to continue, even as US prices stay steady or decline. There's a lot of reasons for this. However I was interested to read a couple of paragraphs from the Star's provincial columnist Martin Cohn on electricity:


"Much is wrong with Ontario’s energy policies, and Hudak’s latest critique catalogues much of the madness: an over-reliance on gas-fired power plants to back up expensive wind power, for example.


But wind and solar make up only a tiny fraction of recent rate hikes; most of it is attributable to construction of gas-fired generators — all of them run by the private sector, thanks to muddled Liberal government policy."

Blaming natural gas generation for price increases seems somewhat strange. Sure having backup plants for solar and wind will be expensive automatically. However for regular generation, natural gas is cheap right now. The plants are cheap to build relative to nuclear and hydro and the price for gas is cheap for now and the foreseeable future. The Liberals cancelling two natural gas plants in Oakville and Mississauga due to local opposition certainly hurts, especially when the price the province has to eventually pay to settle lawsuits is taken into account, plus the loss of reasonably priced electricity that would have been available if the plants had been finished in a timely fashion. If the US utilities can build natural gas plants and keep prices steady, surely Ontario can?

Ontario's economic malaise during the McGuinty era has many different causes, both external forces and internal decisions the government has made. Certainly high electricity prices are mostly due to government policy and have had pernicious effects on the overall Ontario economy. During the McGuinty years, wages have been relatively stagnant with respect to inflation yet electricity and housing prices have rose enormously. Consumers have less money left to spend and save. Additionally businesses have suffered from high electricity prices, especially those in manufacturing which require large amounts of electricity. How many jobs have been lost due to high electricity prices? Hard to calculate, but depressing considering with better policies Ontario could have had lower electricity prices.