Ontario Lowering Hydro Rates in Response to COVID-19

With social distancing in full effect, the Ford government is temporarily ending time of use electricity rates for families, farmers, and small businesses. At all hours of the day, customers will be charged the lower off-peak rates usually reserved for the overnight period. This measure will be in place for the next 45 days to offset higher electricity prices as more Ontarians stay home to self-isolate and some businesses enact work-from-home policies.

The government also announced that it will be extending its recent measure to ban electricity and natural gas disconnections until July 31, 2020. Together, the estimated cost during this timeframe will be $162 million, in addition to the approximately $5.6 billion annually the province currently provides to stabilize hydro rates in Ontario.

If social distancing and work-from-home edicts continue past the 45-day period, the government may extend the program. If so, the costs to the province could increase dramatically as temperatures rise and homeowners begin to run air conditioning units throughout the middle of the day – something they may have ordinarily chosen not to do while at work. This additional stress to the energy grid could be particularly troublesome but may be offset by the closure of non-essential workplaces or other high energy manufacturing. Should energy consumption drop dramatically, it may give rise to other system challenges related to power purchasing contracts.

At-risk Workplaces to Close  

As of 11:59 pm on Tuesday, March 24th, at-risk workplaces will be ordered to close in Ontario. A full list of essential workplaces that are permitted to remain open can be found here.

The province has indicated that it is prepared to add, or more likely remove, businesses from the exemption list as the evolving COVID-19 situation requires. As of Wednesday, March 25th, the government will launch a 1-800 number for businesses with questions about their status. If organizations believe they should be considered under the list of exemptions, they are encouraged to call and share their concerns.

Ontario’s economic and fiscal update

While the government continues to encourage businesses to conduct operations remotely, additional supports for businesses and Ontarians will be released at 4:00 pm on Wednesday as part of the government’s fiscal and economic update.

With the exception of today’s announcement and the $200 million allocated for social services relief, Ontario’s supports have focused less on direct contributions to individuals and businesses. Minister Phillips has indicated that tomorrow’s update is intended to be the first step and will complement what the federal government has already announced for businesses and individuals who have been laid off as a result of COVID-19.

Given the potential long-term impact of COVID-19, it is anticipated that the government could seek to extend its declaration of emergency, which expires on March 31st. The declaration can be extended only once—for another 14 days—without legislative approval.

Minister Phillips has committed to releasing a full budget by November 2020.