Volume 96, Issue 4

Thursday, June 13, 2002
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Unregulated hydro to drain Western's pockets

A teary-eyed farewell for J.W. Little Stadium

The USC likes stuff

Penis: Tough to swallow

London's health care quality slip sliding away

New university lacks student rep.

Canada's own father time

America closes academic door

News Briefs

Schools out for summer and so are we!

Unregulated hydro to drain Western's pockets

By Paolo Zinatelli
Gazette Staff

There has yet to be a spike in electricity prices since the opening of the hydro market on May 1, but consumers – including the university – should expect one soon, according to London Hydro.

In part, the lower than average prices were due to the unseasonably cooler weather that has affected much of the province the past month, said Nancy Hutton, a spokesperson for London Hydro. With the weather warming up and air conditioners being dusted off and put into use, the demand for electricity may result in a sharp spike in prices, she explained.

Since the market opened, prices have been in the range of 2.5 cents per kilowatt-hour, Hutton stated. "The prices have been relatively low since the market opened, [but] a spike in demand – like a heat wave – will see a spike in price," she said.

After the market has been open for about a year, prices will average out, Hutton added.

Dave Riddell, Western's associate vice-president of physical plant and capital planning, said the university looked at several proposals before signing a contract with Ontario Power Generation.

"[The contract] is just to purchase the electricity," Riddell said. The fixed costs, such as transmission charges to Hydro One, London Hydro and independent market operators were not negotiated, he said. "The commodity was purchased, not the fixed costs," he added.

"There will be an increase in [cost]," Riddell said, adding the university is expecting a 13 per cent increase, which will have to be paid for through the university's operating budget. It will indirectly impact students, Riddell said.

The contract is based on a reducing scale, with Western having to purchase 100 per cent of electricity from OPG the first year, 85 per cent the second year and 50 per cent the third. This allows the university to shop around for cheaper rates to purchase the remaining hydro needed, Riddell said.

Western student senator Jesse Greener said the cost to the university is a concern for students. "About half of any increase in cost is going to fall on student shoulders," he said.

"In this era of deregulation and privatization we're looking at potentially much higher costs per unit cost for electricity," Greener added.

Greener said the university already spends approximately $7 million on electricity each year.

Hutton explained London Hydro rates are determined by looking at the customer base and the billing in a given month. The average of the hourly, weekly and monthly rates is then divided by the consumption, and adjustments are made for consumer loss. The result is the rate customers are charged on their monthly bills, he said.

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