The 'dark age' of power: Ontario electricity rates ready to hit crisis stage.

• Author: Ross, Ian
• Position: FIVE NEWSMAKERS

Small and medium-sized businesses should be braced to take it on the chin with rising Ontario power rates in the coming years, said Tom Adams, a Toronto energy consultant.

Ontario is experiencing an energy crisis that's only going to get worse over the next 20 years because of long-term power agreements with renewable energy companies. The burden of the financial cost of those deals will be shifted onto lower income householders and small and medium-sized manufacturers.

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"The general problem of Ontario's growing electricity crisis is going to transform our province in a very negative way," said Adams.

The Green Energy Act, which set in motion the government's purchase of green renewable energy from wind and solar developers at feed-in tariffs of as high as 80.2 cents per kilowatt for 20 years, won't die with the McGuinty government.

"No way, we are locked in for the long term," said Adams.

The problems that underpin the acceleration of electricity prices are deeply rooted with these back-end loaded contracts.

"We're just getting a flavour of what's coming down the pipe at us."

The largest industrial consumers of electricity are candidates to negotiate for relief through provincial industrial incentive programs.

"But if you squeeze the balloon at one end to make it smaller for some customers, it makes the balloon bulge at the other end for the rest of us," said Adams.

"The consumers most exposed to this train wreck that is happening before our very eyes are the medium-sized firms. The harm is going to be enormous."

The Ontario government's cancellation of the coal-burning Thunder Bay Generating Station had northwestern Ontario municipal frothing at the provincial government in November.

The upcoming departure of Premier Dalton McGuinty, amidst a scandal over the cancellation of construction a Mississauga gas plant has placed the future of the government's costly green energy policies in doubt.

The North's economy, due to natural resource development, is rapidly expanding, yet robust mining camps like Red Lake are short of power transmission capacity. Cliffs Natural Resources continues to negotiate with Queen's Park over a utility rate to power its future chromite mine in the James Bay lowlands and a proposed ferrochrome smelter in Sudbury.

Smaller manufacturers, like North Bay's PGI Fabrene, said electricity prices now take up 50 per cent of the plant's total operational costs, up drastically from less than four per...