Robert Benzie
National Post, with files from CanWest News Service
March 4, 2003

The province of Ontario plunged perilously close to a power shortage yesterday after record cold temperatures collided with artificially cheap electricity, forcing the agency overseeing the hydro industry to urge immediate conservation.

As the mercury dropped to -35C in Southern Ontario, the Independent Electricity Market Operator (IMO), which regulates wholesale electricity, was forced to issue a rare “power warning” to prevent service interruptions, such as brownouts.

“It’s record-setting cold and record-setting demand. Because of the cold weather and the high demand for electricity and some of the limitations we’re seeing on our system today, there’s a need for people to cut back if they can,” said IMO spokesman Terry Young.

Mr. Young said industrial and large commercial power users, who pay a market rate for electricity, voluntarily made adjustments when prices rose as high as 39.29¢ per kilowatt hour.

“Some of the big customers . . . have actually shifted their load because of this, shifted their production because they’re paying higher prices, so obviously they want to reduce their costs.”

But homeowners and other retail consumers, who pay 4.3¢ a kilowatt hour for electricity since the Tory government froze prices last November, have no financial incentive to conserve electricity.

Ernie Eves defended his controversial decision to cap retail prices, but admitted the power-shortage threat underscores a need for new generation sources.

“In the long term, there has to be incentives for more generation of power in . . . Ontario. We are moving as quickly as we can move. You can’t build a new facility overnight in terms of generation of power,” the Premier said in Windsor.

Hydro One spokeswoman Anne Creighton confirmed late last night that there were no rotating power cuts, as “the power never stopped flowing.”

Howard Hampton, the NDP leader, blamed Conservative mismanagement for the crisis.

“[The IMO] is essentially saying that they may schedule rolling blackouts on one of the coldest days of the year. This shows again the failure of this government’s strategy of hydro privatization and deregulation,” Mr. Hampton said.

“The reality is the price of private hydro is nine times what the government says it is. It’s nine times 4.3¢ a kilowatt hour.”

Michael Bryant, the Liberal energy critic, said “this is yet another embarrassment for this government,” because no other Canadian province is coping with brownout and blackout warnings.

News of Ontario’s electricity woes overshadowed release of a $100,000 government report into clearing up confusion over consumers’ hydro bills.

Sal Badali, of Deloitte Consulting, concluded a streamlined, standardized bill should be developed consisting of just four standard line items: basic service charge; delivery charge; electricity charge; and the charge for retiring the debt of the old Ontario Hydro. Currently, some local utilities’ bills have up to 14 charges.

John Baird, the Minister of Energy, announced a pilot project in Hamilton is to be launched soon, with simpler bills being available province-wide perhaps next year.

Tom Adams, of Energy Probe, an industry watchdog, hailed the possibility of a consumer-friendly bill, but warned the sector has far greater problems looming.

“The customers may be reading their improved electricity bills by candlelight,” said Mr. Adams. “The whole system is financially and operationally unstable. To get on the road to stability, the first thing we’ve got to do is get off the rate freeze.”