MISSISSAUGA, ON, Jan. 27, 2012 /CNW/ - This heating season we are seeing natural gas prices at 10-year lows. Due to a combination of several factors; including over production and warm weather this winter season, a decline in natural gas demand has left it cheap and readily available. With less demand and high availability, the cost of natural gas has decreased. It is during these periods where a fixed-rate price plan becomes advantageous, before corrective action is taken to start driving prices back up. The decrease in prices has resulted in drilling companies announcing cut-backs in production; at least until natural gas pricing rebounds, to allow for higher output to be more cost-effective. These actions typically contribute to the increase in natural gas prices. As natural gas drilling is reduced, the less available it will become - putting pressure on pricing once again.

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The same events that have rocked the financial world are also presenting opportunities for us to exert some control over the cost of living.

Natural gas prices are a good example. They’ve hit 10-year lows recently thanks mainly to a combination of new production coming on stream, a warm winter and a decline in demand related to global economic weakness. Unless you think we’re headed toward a lengthy recession that will keep the price of commodities low indefinitely, now’s a good time to lock in a natural gas price for the next five years at a very attractive rate.

One of the most disturbing things about the past few years is how vulnerable we’ve all become to financial events that are far removed from our everyday existence. The developments themselves are shocking, but so is the feeling of having no control over our lives.

Compare lock-in rates for natural gas on the Energyshop website or by Googling “natural gas contracts.” Prices vary by a surprising degree, which raises the question of whether there’s any risk in going with the lowest-cost firm.

“There’s no risk in signing up with the lowest cost provider, even if you haven’t heard of them,” Mr. MacLellan said. He argues that if your supplier goes bankrupt, its contracts would be bought by a competitor.

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...There is no point in blaming politicians for Canada’s spectacular failure to meet its Kyoto obligations to reduce greenhouse gas emissions (GGE).

They were simply carrying out the mandate we gave them.

Notwithstanding economically illiterate attempts to pretend otherwise, higher consumer prices for GHG-emitting goods and services are an essential component of any serious attempt to reduce emissions. Counting on people to reduce GGE emissions out of the goodness of their hearts was the strategy of the Chrétien-Martin Liberal governments, and adopting this policy made Canada’s Kyoto failure inevitable long before Stephen Harper’s Conservatives came to power.

It doesn’t matter what Canadians tell pollsters about how much they are concerned with climate change; what matters is the choices we make. And whenever we have been offered the choice of accepting personal inconvenience in order to reduce greenhouse gas emissions or of making sure that fossil fuels are cheap and plentiful, we have consistently and overwhelmingly chosen the latter.

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Ontario Auditor General Jim McCarter told us last week that electricity rates have been rising without sufficient oversight. Warning that they will rise still higher, he blamed the McGuinty government and noted that government legislation and directives have overridden powers assigned to the Ontario Energy Board (OEB).

Electricity consumers have been paying a fixed debt retirement charge (DRC) on hydro bills since 1999. The finance minister is required to determine from time to time the residual stranded debt and make that determination public.

The auditor points out that the residual stranded debt originally was $7.8 billon and that, over a period of 10 years, $8 billion was collected. However, no public report has been made and the DRC is still being collected.

The [other] area of the auditor’s report was on the role of the OEB and the decline of its authority to control electricity rates. The auditor notes that in recent years the rates for unregulated sources of power have been higher than regulated sources, and that they account for about 65 per cent of the price paid by the average consumer, meaning that only $35 of every $100 paid for electricity can be regulated. The unregulated sources are primarily supplies under power contracts signed by the OPA under government direction.

The OEB says the public expects the board to regulate the industry. This, however, is a misconception because the government has taken away its authority to regulate.

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...Ontario Auditor General Jim McCarter's report, released Monday, is dangerous for the Liberals because it indirectly undermines their judgment. The report begs the question: Did the province rush into renewable energy investment without adequately taking measure of the likelihood for success?

...It appears the Liberals passed the Green Energy Act, which heavily subsidies green power projects, without a clear idea of its prospects for success.

McCarter noted that no economic analysis was done to determine whether the province's $437-million deal (since lowered to $110 million) with Korean firm Samsung--which promises subsidies on power prices and guaranteed access to the energy grid in return for $7 billion in investments--is "economically prudent."

Green energy initiatives will cost Ontarians $220 million a year.

Energy rates are expected to increase by 7.9% annually over the next five years, with more than half of that attributed to green energy initiatives.

Ontarians are getting angry with rising costs. McCarter notes that in March 2009, the Ontario Power Authority suggested the province offer a lower feed-in-tariff price for ground-mounted solar projects that could save $2.6 billion over 20 years.

McCarter says Ontarians' power bills have increased an average of 26% from 2008-2010 and they'll keep going up as more renewable energy projects start up. The province is leaning on its 10% clean energy benefit.

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...In one of the most scathing indictments of government mismanagement we have ever witnessed, Ontario Auditor-General Jim McCarter reported Monday that Mr. McGuinty's green dream has rapidly become an $8-billion nightmare for Ontario taxpayers and electricity users. Almost no new net power will be generated by all the green-energy projects hastily funded since the bill was passed, but the average residential consumer will see more than $400 a year added to his power bill for a decade to pay for all the bad contracts with and subsidies to eco-friendly power suppliers.

Over the past year, the McGuinty Liberals have been forced to conduct a series of embarrassing climbdowns from their grand promises about the benefits that would flow from the switch from carbon fuels to renewables.

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Haste makes waste.

Premier Dalton McGuinty’s Liberals’ fast tracking of green energy projects will cost electricity ratepayers more money in the long run, says Auditor General Jim McCarter.

In his 460-page annual report to the Legislature released Monday, McCarter castigated policies that were a cornerstone of McGuinty’s re-election in the Oct. 6 vote, including Grit claims of 50,000 green jobs being created.

The auditor general found billions of dollars in solar and wind projects were approved without appropriate oversight, including and regulatory and planning procedures.

“While this helped these projects get off the ground quickly, their high cost will add significantly to ratepayers’ electricity bills in the future,” McCarter told reporters Monday.

He urged the government and its agency, the Ontario Power Authority, to conduct a “cost-benefit assessment of the progress made to date” in order to “strike an appropriated balance between the promotion of green energy and the price of electricity in Ontario.”

The Progressive Conservatives are planning to back an NDP bill to slash the HST on home heating bills when the legislature returns next week, setting the stage for the first showdown in Ontario’s minority parliament.

It’s the first sign of a co-ordinated opposition strategy since last month’s election, which left the governing Liberals one seat short of a majority government.

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Ontario’s local electric utilities need “billion and billions” of dollars in investment, and will be seeking higher prices to raise the money, says the head of the utilities’ association.

Electricity consumers have already been bracing for higher prices as more costly forms of generation come on line.

Proposed new nuclear plants will need higher prices, as will new energy from renewable power sources.

Now, Keech says the wires system needed to deliver the power will also need significant investment. The current system isn’t designed to handle power from multiple, relatively small sources scattered all over the province.

It also needs to upgrade to get ready for widespread use of electric vehicles.

Among its recommendations, the association says the province should consider merging the Ontario Power Authority and the Independent Electricity System Operator into a single unit.

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The New Democratic Party announced Monday morning they plan on introducing a private member’s bill to take the HST off home heating as soon as the Legislature resumes next week.

The bill will be introduced by newly elected MPP Michael Mantha (Algoma Manitoulin). He said it will save families $100 a year.

“Everybody needs heat in their homes,” Mantha told reporters at Queen’s Park. “This is a small step but it will make a real difference in people’s lives.”

The NDP bill does not include taking the HST off of hydro, said Leader Andrea Horwath.

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