Richard Brennan and John Spears
Toronto Star
April 24, 2001

Energy Minister Jim Wilson says Ontario’s electricity market will be opened to competition in a year – or about 18 months later than planned – and that consumers should be better off.

But some electricity-industry watchers say the further delay hints that the province lacks resolve. And the union representing Toronto Hydro workers vows to campaign against electricity competition.

Wilson has said a competitive market will attract investors who will build new generators and offer consumers better choices.

"The government is confident that conditions necessary to open the electricity market to competition will exist by May, 2002," Wilson told the Legislature yesterday.

"The government is committed to an open market while guaranteeing a safe, affordable and reliable supply."

Electricity prices soared in California and Alberta when markets were thrown open, but Wilson said prices in Ontario will not be capped for consumers.

"I think over the long haul you will see … that prices are lower than they would have otherwise been under the monopoly system," said Wilson.

Opposition critics called electricity competition a "dirty deal" that is being cooked up in virtual secrecy with no public input.

"It is the most major privatization in North American history and it is all being done behind closed doors now," said Liberal MPP Gerry Phillips.

"There’s billions of dollars to be made by the private sector on this and the consumer is in grave danger of being left out to dry," added Phillips, who called for a special legislative committee to "track this every step of the way."

New Democratic Party leader Howard Hampton said electricity competition "has been a disaster in California and it has been a disaster in Alberta and there is absolutely no evidence to indicate it is going to work otherwise in Ontario."

Ontario’s market was to be deregulated last November, but that was delayed.

Wilson said the challenge is to get away from the existing monopoly situation, in which Ontario Power Generation supplies 80 per cent of the province’s power.

Ontario Power Generation must cut its share of the market by 35 per cent over the next 42 months. That will open opportunities for new investors, Wilson said.

Others, however, were skeptical.

Tom Adams, executive director of Energy Probe, said delaying the market opening until next year will drive investors away.

Premier Mike Harris acknowledged yesterday in Hamilton that the market-opening date is only a "target" that could be delayed.

Electricity-industry watchers were split on yesterday’s announcement.

The Toronto Board of Trade hailed the announcement as a "firm date" and a "positive signal."

But David McFadden, who heads a coalition of business and municipal groups interested in electricity, was more muted.

"It’s very helpful that the minister has set a target date," said McFadden, of the Stakeholder Alliance for Energy Competition and Customer Choice.

But investors want more than words, said McFadden.

"I think what the investors are going to look for is all of the other steps moving ahead," he said.

That includes firm environmental guidelines for electric plants that burn coal or gas, and prodding Ontario Power Generation to sell more assets.

The Ontario division of Canadian Manufacturers and Exporters also struck a cautious note.

Wilson’s announcement "is welcome, but must be carefully executed," vice-president Ian Howcroft said in a statement.

The province must make sure the new market doesn’t lead to electricity prices surging higher, as they did in California and Alberta, Howcroft said.

Bruno Silano, president of Canadian Union of Public Employees Local 1, representing Toronto Hydro workers, vowed to continue fighting the new market system.

"The government is going in a direction contrary to where the majority of citizens want to go.

"Poll and poll shows citizens don’t want choice when it comes to electricity, they don’t want competition and they don’t want privatization.

"They want reliable and affordable power."

CUPE plans to rally a coalition of labour, environmental and small-business groups to fight the province’s plans, Silano said.

Toronto Hydro fully supports market opening.

"We know we’ve got a workable model here," said spokesperson Blair Peberdy.

"We’re very optimistic about the market structure."

Toronto Hydro would like to see the market open sooner than May, 2002, Peberdy said.

Tony Jennings, chief executive of the Municipal Electric Association, welcomed the May, 2002, date.

He said it will give the industry time to settle some technical questions about how the new market will operate.