Chinta Puxley
Hamilton Spectator
June 13, 2002

 Ontario Premier Ernie Eves bowed to public pressure yesterday and will keep Hydro One in public hands. Eves said the province will either sell some of the utility’s shares, establish a public-private partnership, or set up an income trust to bring "private-sector discipline" to the utility. He said a decision will be made by the next election.

But, unlike a month ago, Eves said the total $5.5 billion sale of Hydro One isn’t an option anymore.

"The government has decided that it is not going to part with control of Hydro One," Eves said as he emerged from a cabinet meeting yesterday.

"We still believe that there are ways to bring private-sector discipline to the corporation without parting with more than 50 per cent of the entity."

The decision kills what would have been the largest public offering of shares in Canadian history. The reversal is also part of a concerted effort that distances Eves from the Mike Harris regime.

"We may have the odd detractor on Bay Street but I believe we have none on Main Street as a result of this decision," Eves told a raucous legislature during question period.

But the compromise doesn’t seem to have satisfied anyone. The opposition says Eves should commit to keeping all of Hydro One in public hands while proponents of the sale say Eves is choosing political expediency over what’s best for the consumer.

Brad Clark, Stoney Creek MPP and the minister of labour, was one of many cabinet ministers who shared constituents’ concerns about the sale with the premier. He said yesterday’s decision shows Eves was listening.

Although the Conservatives recently argued that selling Hydro One was the only way to reduce its ballooning debt and improve infrastructure, Clark said retaining control of the public utility means people will "sleep well at night knowing that we did the right thing.

"We’ll be protecting the public interest . . . because the government, at the end of the day, has control of the grid," Clark said.

But opposition politicians say they didn’t hear anything yesterday guaranteeing the utility will remain in public hands.

The government is still going ahead with legislation allowing it to sell Hydro One. The bill was necessary after a judge ruled in April that current legislation doesn’t give the government the authority to sell the utility.

Dominic Agostino, Liberal MPP for Hamilton East, said when the Conservatives pass the legislation, the utility can still be sold.

"This is about the fourth position Ernie Eves has taken on Hydro One," Agostino said. "Ernie Eves can change his mind when the House isn’t sitting during the summer. Then he can do whatever he wants with Hydro One."

Other opposition politicians said they don’t understand why Eves wants to involve the private sector at all. David Christopherson, NDP MPP for Hamilton West, said the private sector would only want to get involved with Hydro One if they could make a profit.

"Why not have the public make that profit?" he said. "If (the government) sold a significant part to one private entity, they would have a huge influence on the government."

Christopherson scoffed at the notion of "private-sector discipline," saying that mentality caused the recent furor over exorbitant executive salaries and severance packages at the utility.

"As soon as you bring the private sector in, they’re going to want their pound of flesh," he said.

But some say taking the utility out of government hands is the only way to protect consumers. Tom Adams, head of the watchdog group Energy Probe, said governments are much more easily influenced by big-business interests than they are by little consumers.

Having the utility in private hands levels the playing field, Adams said.

"(Eves’) announcement is a long-term threat to the interests of ordinary consumers," Adams said.

"I’m very disappointed but I’m not surprised. It signals that Ontario’s transmission and distribution utility will remain under political control until there is a change in thinking."

With files from Spectator wire services