Eves to delay hydro selloff indefinitely

April Lindgren, with files from Lee Greenberg
Canwest News Service
September 11, 2003

Brechin: Premier Ernie Eves said yesterday that plans to eliminate Ontario Power Generation’s monopoly in the province’s electricity generating market are on hold until further notice.

The premier said the provincially owned power generating company won’t be forced to sell off more of its power plants until the province is “in a position where we can have a real retail market and we’re not there.

“We need excess (power generating) capacity I believe in the neighbourhood of 25 to 30 per cent,” Mr. Eves said during a campaign stop near Orillia. But with spare capacity currently limited to 10 to 15 per cent “any discussion about that (selling OPG assets) right now is quite frankly premature.”

Ontario’s governing Conservatives spent years planning the introduction of a competitive power generating market beginning in May 2002.

A key element was the decision to force OPG to reduce its share of the generating market to 35 per cent from more than 85 per cent by 2012.

While the government did manage to sell a few hydro electric plants and sign a long-term deal to lease the Bruce nuclear plant to a private firm, power prices skyrocketed after the electricity market formally opened to competition in May 2002.

Responding to consumers infuriated by their high power bills, the government abandoned most of its plans to liberalize the electricity market in November 2002 when it introduced an artificially low price freeze and touted a list of new potential power projects involving government investment.

With OPG still responsible for generating 70 per cent of Ontario’s power needs, Energy Minister John Baird last week contradicted Ontario Power Generating officials who a few days earlier said fossil fuel plants are still on the market including the Thunder Bay and Atikokan plants in northwestern Ontario, the Lakeview generating plant near Toronto and the Lennox plant near Napanee.

“Ernie Eves vetoed the Atikokan sale period – they had it for sale and Ernie Eves vetoed it because he didn’t want to sell a coal-fired plant because of environmental concerns,” Mr. Baird said during after an appearance in Ottawa with Mr. Eves.

“Thunder Bay is not for sale. The Lakeview generating plant we’re going to close in 2005 – it’s the oldest fossil fuel plant in our fleet and frankly we couldn’t give it away if we wanted to. And Lennox is not for sale.”

Tom Adams, executive director of the watchdog group Energy Probe, said the latest pronouncements from the premier and his energy minister take “backsliding to a new level” and will make it even more difficult for Ontario to attract electricity sector investors.

“What we have now is a commitment to extending OPG’s monopoly” and that’s a force the private sector will not be eager to tangle with in a competitive market, Mr. Adams said.

“What private generators were saying as they were leaving town a while ago was that they weren’t going to make any investment in Ontario until they had more clear information. Now the commitment to introducing a market for electricity has suffered another blow.”

 

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