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The Ontario auditor general should investigate auto insurance rates

Ontario’s auditor general should investigate auto insurance rates after a new study found that Ontarians are being grossly over-charged.

A new study showing Ontarians were likely over-charged for auto insurance by $840 million, in one year alone, is sufficient cause for a fresh investigation by the province’s auditor general.

It’s no secret that Ontario residents are forced to pay a lot for auto insurance — we face rates that are 45 per cent higher than in Alberta, and about double what they are in the Maritimes. Hard-pressed consumers deserve more assurance that they aren’t being gouged.

Having the auditor general’s office dig into every aspect of this situation would either restore public confidence in the existing system or expose problems sorely in need of reform. The office did examine auto insurance regulatory oversight in 2011, but an updated and deeper probe is in order.

New concern over the fairness of the status quo was triggered last week by an analysis of the auto insurance industry done by two professors at York University’s Schulich School of Business, Fred Lazar and Eli Prisman.

They concluded that Ontario consumers may have overpaid for auto insurance by as much as $4 billion between 2001 and 2013, with excess fees amounting to $840 million in 2013 alone...More.

Wynne zaps hydro customers, again

The OEB hides the truth on rate increases

The Ontario Energy Board (OEB) reported their semi-annual bad news via the News Release that always contains depressing announcements about upcoming rate increases.   Couched in words meant to assuage the reader, is this statement: “The price is increasing by approximately $4.42 per month on the ‘Electricity’ line, and about 3.4% on the total bill, for a household that consumes 800 kWh per month.”

The OEB doesn’t issue a press release when your local distribution company increases their rates, part of the “total bill,” so that reference is meaningless.

If you look at the actual price rise from November 1, 2014 to November 1, 2015 the increase is considerably more than 3.4%.   In fact the increase on the charge for the “Electricity” line is 12.8% excluding the HST applied on that increase.   The charge for electricity for the “household that consumes 800 kWh per month” increased by a total of $130.31, not the $53.04 that the OEB infers.   Even using the “average” RPP (regulated price plan) posted on their site and comparing November 1, 2014 to November 1, 2015, you get an increase of 12.5%!

Costs from renewables are one-third of the increase

Looking further that what’s in the OEB News Release, we find that they attribute the increase as follows: “Increased costs from Ontario Power Generation’s (OPG) nuclear and hydro-electric power plants make up about 40% of this increase. Costs from renewable generation sources are another driver, representing about one-third of the increase.” I emphasized the last sentence as it doesn’t reflect certain facts about renewable generation (principally wind and solar), including the need to pay OPG for spilled (unused) hydro power, payments to gas plants to idle (ensuring power is available when the wind dies down or the clouds cover the skies), or directions to complete marginal generation (Mattagami’s project cost was $2.6 billion) which produces power when it’s not needed, in the Spring and Fall periods when Ontario’s demand is low.

Millions lost in one day

You need only look back to October 13, 2015, a windy day when the industrial wind turbines were cranking out unneeded power. The reported 3,450 MW of wind capacity was spitting out an average of 2,200 MW per hour, at a cost for the whole day of $6.5 million. Ontario was busy exporting 2,228 MW every hour that day, being paid 1.8 cents a kWh and at the same time, paying wind developers an average of 12.3 cents per kWh—we lost more than $5.5 million. That’s just one day!...More

Note: The Ontario Energy Board is a six-member regulatory body (four women and two men) headed by chairman Rosemarie T. Leclair. Although it is an arms-length organization, it almost invariably sides with government and/or energy suppliers. According to the 2013 Sunshine List, Leclair earns a $550,000 salary.