Graeme Smith
The Globe and Mail
November 17, 2001

Environmentalists disagree over whether the province should abandon deregulation of Ontario’s energy sector.

“It [ending deregulation] is a terrible idea, and it suggests the government’s thinking is really slipping,” said Tom Adams of Energy Probe, which has lobbied for more than a decade for Ontario’s energy to be privatized.

But Gord Perks of the Toronto Environmental Alliance said the idea “is an enormous relief. A free energy market would be a huge disaster.”

The Globe and Mail reported that the Ontario government is considering a proposal to convert Hydro One, which runs the province’s power-transmission system, into a not-for-profit entity. The government had previously intended to convert the utility into a fully commercial, privatized company.

Some environmentalists suggest that adoption of the proposal would save the electricity system from a profit-hungry corporation that would have no incentive to promote electricity conservation or alternative clean energy projects. Others say it would create a monolithic public company without the kind of fiscal and environmental accountability that could have been imposed by shareholders of a privatized utility.

Still others, such as David Martin, a policy adviser with the Sierra Club of Canada, say the ownership structure of the utility isn’t nearly as important as the environmental and consumer safeguards imposed by government.

“We’ve been in the non-profit, publicly owned utility world since the turn of the century in Ontario and it’s been a disaster for ratepayers and a disaster for the environment,” Mr. Martin said. “By the same token, I don’t agree with Energy Probe that private ownership is the solution to this problem. What we need are good environmental policies, regardless of how this structure question is resolved.”

Ontario NDP Leader Howard Hampton, a long-time opponent of privatized energy, said he thinks the government is going to give up the idea of privatization because it would bring higher energy costs for businesses and consumers.

“I think the Conservative government just blinked,” Mr. Hampton said. “They recognize they cannot continue with this story they’re telling, that privatizing huge chunks of Ontario Power Generation and privatizing Hydro One would not affect electricity consumers.”

Mr. Hampton said a private Hydro One could sell large quantities of power to the United States, where prices are higher, and force prices up in Ontario. He also pointed out that few jurisdictions have successfully privatized their electricity.

“This government first pointed to California as a model, and now [Energy Minister] Jim Wilson doesn’t even want to whisper the word California.”

One of the dangers of opening Ontario to the North American power market would be allowing companies to shop around for the least-regulated place to construct generators, Mr. Perks said.

“We’d get the emissions and the companies get to export power somewhere else,” Mr. Perks said.