Cecilia Nasmith
Northumberland Today Newspaper
May 17, 2003

Enjoy those low hydro prices now. According to Energy-Probe executive director Thomas Adams, these artificially low prices are one ingredient of an eventual disaster.

Energy Probe — a charitable organization that promotes resource conservation, environmental sus-tainability, democratic decision making and economic efficiency in Canada’s energy sector — sees a disheartening number of parallels between Ontario’s situation and the power crisis in California several years ago.

"The message is not a cheery one," Mr. Adams said in an address to the Rotary Club of Cobourg last week.

"They had a deficit on the supply side. The price for power was fluctuating, and got up to some very high prices, while prices for consumer were frozen at a low level which translated into a terrible problem.

"We have the ingredients for that kind of problem here," he said. Ontario Hydro collapsed officially in April 1999, when its debt problems finally caught up with it, Mr. Adams said.

The province formulated a privatization plan to address the problem, which pushed hydro rates climbed to worrisome levels last summer. This was due to several factors, Mr. Adams said, including high power usage in record hot weather and high market-place prices.

"That plan was thrown out the window in November 2002, when the premier froze prices. The premier also announced a freeze on the components of your bill that pay for imports and distribution rates," he said. The actual cost of electricity in Ontario is skyrocketing. Meanwhile — with a choice of high floating prices or frozen lower price — the government has opted to freeze prices. And costs can only rise, Mr. Adams said.

"A lot of our transmission system was built in the 1930s or earlier. A lot of the poles are not going to keep standing up. A lot of the generators are in bad shape and need renewal. We have to pay the bill eventually."

The rate freeze was structured to provide relief to residential customers, who account for 53 per cent of the power consumed in Ontario. With their own prices down, their consumption is bound to rise.

"In a classic declining organization, business-investment dollars available are put into losing operations. They suck the cash out of winning operations. Ontario Hydro put as much money as was available into coal and nuclear plants."

Mr. Adams predicted that the rolling black-outs that plagued California at the height of its own crisis may begin here within eight months. "I think, really, we are replaying the California movie, and here is the sequel," he said.

"In California in the winter of 2000-2001, the governor was buying high, selling low, and people were stockpiling candles. We are buying high and selling low, and my advice to you is, stockpile candles."