Global News ran a long story today detailing the frustration of folks in Nova Scotia with the rise in their electricity bills. There is some of that in New Brunswick and more will be coming as the ~9% rate increase kicks in.
Traditionally electricity utilities have been mandated (mostly) to offer a high quality, reliable service at the lowest possible cost (relative to the reliability standard). This would mean paying off debt in a timely fashion and considering the cost structure based on customer class, etc. There was a regulator to help the process along.
When governments come up with a new idea - decarbonizing the grid - the question I have asked since day one has been simple. Who should pay? The ratepayer or the taxpayer?
One might say the answer is simple. If the cost electricity is rising, the user of that electricity should pay. But don’t forget two things: 1) climate change objectives are public policies that go way beyond electricity; and 2) for the most part energy costs are not progressive as are tax rates. In other words, if I earn more I pay more. The household with $50,000 in total income pays the same rate for electricity as the household with $500,000 in total income.
What about if government put in a policy that the electricity utility should give 10% of its annual revenue to charity every year. Would that make sense?
I think we are about to hit a public wall/backlash around climate change in this country because there wasn’t a good enough job explaining to people the why, the what and the timing of the changes. Electricity grids coalless by 2030? No internal combustion engine (ICE) vehicles sold by 2035?
Canada is ideally positioned for a political party (ies) to axe the carbon tax, scrap all the mandates and claim this as a win for average, every day Canadians. It seems the governing party is gambling people will take one for the climate change team and accept significant cost increases. That may be the case among some but I am not sure the majority of folks are going to buy it.
I have said before it would have been ideal to get cross-party support for climate change commitments. I know this would have been hard but on the biggest issues - maybe we should at least try.
As for the ratepayer/taxpayer decision, the federal government is making the taxpayer cover the billions and billions to convert the auto manufacturing industry to EVs. There are many other industries that are getting piles of cash to decarbonize.
If the feds want coal fired power plants shut down, then maybe they should pony up. If they worry about backlash - what province is righteous on this issue? Pump some cash into carbon capture or agriculture - or you have to do a far better job of educating folks on why they need to directly pay a lot more in their rates.
I forgot to mention that the Global News article was about a very young lady in Halifax. If you lose the young on this issue - it will be an almost impossible task to put the genie back in the bottle.
The problem as I see it is simple. The government should get out of paying for decarbonization and do what they are mandated to do...regulate. There is no way around the need to reduce carbon emissions, and the levels we must attain are known.
There is a point where carbon capture is cheaper than carbon reduction, and we should let industry determine where that point is. Let the vehicle and energy suppliers figure out how they will get to zero or near zero carbon vehicles. But vehicles are 7% of the problem while concrete and steel are 34%; agriculture is 19%, and there are no obvious easy and cheap solutions to anything.
Regulate carbon levels and let industry figure out how they will get there. The present system of 'tax and subsidize' inserts two middle men into the equation, both involving inefficient government bureaucracy and dramatically increasing costs. The voter senses there is something wrong with what governments are doing, and governments can't expect the voter to accept it. For them, the solution is simple...throw out whoever is in power and try something else! And if that doesn't work, keep doing it until politicians catch on! "I promise to reduce carbon emissions by taxing you and giving the money to industry" won't work anymore.
Spending the time communicating “the why” trips up governments over and over again. The work all gets done in a bubble
and people forget that the general population is distracted. Communicating the why is a fundamental step in change management but gets lost in politics. Instead, copious amounts of efforts are invested after the fact to justify decisions and really, the battle has already been lost.