Kathleen Wynne defends plan to spread out hydro costs

Ontario Premier Kathleen Wynne is defending her government's decision to cut hydro rates by about 17 per cent, saying it's not fair to ask this generation of hydro bill payers to shoulder the costs of infrastructure upgrades to be used for years to come.

• Hydro rates to drop 17%, but Ontarians will pay for it later
• ANALYSIS: Will Kathleen Wynne's hydro plan save her re-election hopes?

Wynne was a guest on CBC Radio's Ottawa Morning Friday, and said decades of hydro infrastructure neglect by past Liberal, NDP and PC governments necessitated action by the time the Liberals again assumed power in 2003.

"Is it fair to ask this generation to pay not only for that neglect, but also to pay for assets that are going to be in service and are going to provide capacity over the next 30 years?" Wynne asked.

"And we've determined that the answer to that is no, that we need to be able to ask those [future] generations to share the cost. ... The decision probably should have been, in the first place, to spread the cost over the life of the asset as opposed to trying to get it paid off that quickly.

"... It's really intergenerational fairness."

Bills to drop by 17%, on average

Residential and small business hydro bills in Ontario will drop by 17 per cent on average this summer under the plan, which was announced Thursday. It will lift billions of dollars in costs off customers this year and load them onto future hydro bills and taxpayers. 

It means some $28 billion in costs projected to be paid over the next decade will be refinanced. Officials said the maximum amount of interest per year would be $1.4 billion, with those interest costs to be paid by hydro customers in future years.

Asked about those interest costs, Wynne told Ottawa Morning interim host Hallie Cotnam that other solutions would also come at a cost.

"We looked at everything ... we looked at all of the options in terms of what we could do to provide relief to people. And I know that there are people, some of them in Opposition, who will say we should just rip up the contracts that we've signed ... that is not reasonable and in fact, would also put billions of dollars of more cost into the system."

Listen to the full interview with Wynne here.

'Always a political component'

Asked whether the move was political — it will start to take effect on hydro bills this summer, about a year before the June 2018 election — Wynne said "there's always a political component" to decisions politicians make.

"I'm in elected office. I was elected in 2014 to do a job, and part of that job, a fundamental part of that job, is responding to challenges that people face in the province," she said.

"So yes, we're more than a year away from an election and there will be that interpretation of this. I can't actually help that, Hallie ... My job is to be responsible and to be responsive to people's lives and people's concerns, and that's why we're making these changes."