Tom Adams

July 18, 2003

Dear Friend:

Hydro-Quebec’s mismanagement has created a legacy of environmental damage, unneeded dams, and squandered resources through giveaways to metal smelters. NB Power’s public utility regulator has just declared that Crown utility to be "insolvent." Manitoba Hydro has also served its citizens ill by supplying artificially cheap power to dirty, old economy paper mills and mines.

But no power system in Canada, and possibly in the western world, is more dysfunctional than Ontario’s. Ontario taxpayers are being gouged as never before, and the skies above Toronto may soon suffer unprecedented soot levels.

Here is what the incompetence of the Ontario government has brought about:

• In a desperate attempt to avoid blackouts this summer, the Ontario government is renting diesel generators, parking them around Toronto and other parts of southern Ontario. From there, they’ll be belching out dirty, high-cost power to meet the summer demand for air-conditioning.

   

• In another attempt to meet Ontario’s summer power demands, the government is rushing the obsolete Pickering nuclear plant back into service. The government is playing with fire by risking an accident at this troubled station, which Ontario Hydro shutdown six years ago for safety reasons.

   

• While the Ontario government is producing high-cost, high-risk power and buying high-cost power from others – often at 20 cents or more per kilowatt hour – the government is reselling it to its customers at a fixed 4.3 cents per kilowatt-hour. This artificially low price discourages conservation, dramatically increasing the risk of blackouts this summer. Without the rate freeze, taxpayers wouldn’t be facing major tax hits in order to encourage wasteful power consumption.

Ontario’s power problems are entirely self-inflicted. Most of Ontario’s neighbours in the United States have a glut of much cheaper and cleaner power after they removed regulations that favoured polluting coal and nuclear plants over high-efficiency gas technologies, such as cogeneration.

Our neighbours in the U.S., like the U.K., adopted market-oriented reforms that allowed competition to work for the benefit of both the environment and the economy. Pollution from coal generators and nuclear reactors has dropped everywhere competition has been tried. Even in pro-coal Alberta, competition has switched almost all new investment away from coal to much more efficient gas-fired plants and renewable energy like wind power.

Ontario toyed with introducing competition but got cold feet. Instead of privatizing its inefficient utilities, it decided to pour billions of taxpayers’ dollars into subsidizing outdated nuclear plants. It short-circuited conservation by freezing rates at a level that encouraged wasteful consumption, passing on the cost to future generations. In short, it utterly abandoned all economic principles. And Ontarians, and the Ontario environment, are paying the price, in spades, of this unprincipled and uneconomic behaviour.

If there is one silver lining to the unfolding tragedy, it’s in the lesson to us all. We mustn’t let our politicians act as if the laws of economics don’t matter; we mustn’t let our environment be gutted through wasteful giveaways, whether subsidies to power producers or subsidized power prices.

If you agree that the Ontario government’s energy policies have been ruinous, and want to make sure that all Canadians understand why, so that we can avoid a disastrous repeat, please help us with a generous, tax-creditable donation. Sound environmental and economic policies go hand in hand. With your help, Canadians will get a cleaner environment and power that is truly lower cost. We deserve it, and so do future generations.

Yours truly,

Tom Adams
Executive Director

Let’s make sure Ontario’s bungling doesn’t reoccur, in Ontario or anywhere else in Canada! Your generous support today for our campaign for cleaner power that is truly lower cost.

A record you can be proud of

• Energy Probe was the world’s first organization to recognize – in 1980 – that the electric power business is not a natural monopoly. We then developed the successful model for breaking up electricity monopolies, which the United Kingdom adopted in 1989. As we predicted, under this model, the U.K. cancelled the construction of new nuclear plants, began to shut down existing ones, and turned to advanced clean technologies such as cogeneration and renewable energy to meet its energy needs. Power rates fell for residential, commercial and industrial users.

   

• The Energy Probe model has since become the dominant model for electricity restructurings around the world, successfully implemented in Australia, New Zealand, South America and elsewhere (California, regrettably, did not adopt the Energy Probe approach).

   

• Since Energy Probe opposed nuclear power, Canada’s nuclear industry has cancelled 70 Darlington-sized reactors that were scheduled to be running by 2000. The Darlington nuclear plant was begun in 1970. Since then, no new nuclear plants have been ordered and completed, anywhere in Canada.

   

• Energy Probe was the first environmental organization in Canada – and to our knowledge, the world – to oppose the construction of nuclear power plants. We recognized that nuclear power was uneconomic in 1974.

   

• In bringing about these accomplishments, Energy Probe was entirely funded by Canadian citizens and typically outspent by the nuclear industry, 1000 to 1. Our success in influencing our country’s policies was noted by the inaugural edition of The Canadian Encyclopedia, which added that "despite its low budget, Energy Probe is respected for its scrupulous research."