Carlyn Zwarenstein
Eye magazine
April 12, 2001
Power to the People – that’s the title of a recent Royal Ontario Museum exhibit on the history of public power in Ontario. And real public power? Well, you’ve missed that too. In the real world, the electrical industry in Ontario slipped out of public control a couple of years back.
In April 1999, the Ontario government incorporated the successor companies of the former Ontario Hydro, turning them into commercial enterprises. Ontario Power Generation Inc. (OPG) – the successor corporation responsible for electricity generation – is still owned by the government. But it’s a for-profit company, parts of which are privately run. And, because it is incorporated under the Business Corporations Act, it’s exempt from access-to-information laws.
So what if safety is being compromised in nuclear plants, or if labour standards are not up to scratch, or the environment is being trashed, or deals are being made that end up hurting customers? The problem is, we just don’t know.
At the time Hydro went commercial, the Ontario Information and Privacy Commissioner made a submission to the Standing Committee on Resources Development. "We argued that the public had just as much right to demand access to records as under Ontario Hydro," says Tom Mitchinson, the assistant commissioner. The submission was denied.
In October, Nickel Belt MPP Shelley Martel raised a motion that a lease agreement between OPG and Bruce Power Partnership for the Bruce A and B nuclear facilities be examined by the Provincial Auditor, there being no other way to make details public.
Still, even if that goes through, the auditor can only make recommendations, and it would be too late to scrap the deal.
"The only thing you’re allowed to know is what they want you to know, or what their regulators force them to release," says Tom Adams, executive director of Energy Probe.
Adams says the Ontario Energy Board – a government body that’s supposed to protect the public interest in breaking up Hydro’s monopoly – is a toothless economic regulator.
While OPG is still publicly owned, allowing the government to borrow against public money, it’s currently a public-private partnership, with a private, commercial structure and private management of facilities like the Bruce A nuclear reactor. Rather than applying the quasi-independent, market-based regulatory structure that used to exist in Ontario for natural gas to the electrical industry, Adams says, "the weaknesses of our regulatory structure for electricity carried over into gas."
The result, he says, is that cabinet, rather than the market, determines the rate structure for electricity. Adams believes that a truly competitive, free-market system for electricity would result in a phasing out of nuclear power and a reduction in greenhouse gas and acid gas emissions.
"The fundamental basis for our advocacy is environmental," Adams says. In fact, Energy Probe has long advocated privatizing Ontario Hydro. "We believe that the environmental basis of a market-based system would be much better," Adams says. "We think nuclear power would be rapidly phased out."
As Toronto Star columnist Thomas Walkom has pointed out, Energy Probe might be anti-nuclear, but its free-market position doesn’t always carry well in environmental circles. Adams insists there is no connection between reduced access to information and the move toward privatization, while Mitchinson sees privatization as part of the problem.
"Our position relates to the whole concept of privatization," Mitchinson says. "Our concern is that when the government decides there is a more effective way of providing a program that remains essentially public in nature, there should be no change in freedom-of-information law.
"The privatization, if you will, of Ontario Hydro was accomplished by the Electricity Competition Act."
Provincial NDP Leader Howard Hampton argues that the government’s continuing attempts to privatize lie behind the decision to remove Hydro from access-to-information laws by incorporating it as a business. "Ontario Power Generation and this government have enough on their plates trying to privatize without [also] telling people they’re privatizing," Hampton says.
Whether it’s a question of too much privatization or not enough, everyone agrees there is a problem with transparency. The Canadian Environmental Law Association warns that, as a result of privatization, we are unable to learn anything about nuclear emergency preparedness, radioactive spills, malfunctions, emissions, peer reviews and safety audits, environmental assessments or even safety communications with other CANDU operators worldwide.
"This government believes that the public services, and services which are publicly accountable, should be sold off wherever possible to the private sector," says Hampton.
"Once you sell off hydro generating stations, then the laws of the marketplace are going to operate."
Hampton says private companies will sell power where they get the best price. It is "outrageously wrong‚" he insists, to claim that the cost of electricity will go down in a free-market system.
"I think anyone who reflects for a moment would see that that’s completely phony," Hampton says of OPG claims that the private system will be run differently here than in blackout-plagued California. A seven-year lease agreement signed this summer allows British Energy, the private company that provides most of the electricity in the U.K., to operate the Bruce A nuclear reactor. While citizen taxpayers will foot the bill for debts or mistakes, the details of the leasing agreement are not public.
Several Conservative government employees have gone on to lucrative careers within Hydro One, another successor company to Ontario Hydro and OPG. These include Paul Rhodes, whom Hampton describes as a former "press hack," as well as Tory staffer Deborah Hutton. Back in the day, Ontario Hydro salaries routinely featured high on published lists of top-paid public employees. At the time Hydro was disbanded, the president earned around half a million dollars a year, and the average salary was about $80,000.
"Make no mistake," says Hampton. "Some people are going to make a lot of money from this."
The Power Workers Union of Ontario (PWU) and the Society of Energy Professionals, which represents white-collar workers, own a 5 per cent share in OPG’s Bruce Power, and thus could have an interest in keeping profits high and costs low in facilities like Bruce A nuclear, which is 95 per cent owned by British Energy. PWU has gone on record as strongly supporting further privatization of OPG.
In fact, its former president, John Murphy, left his union job last year to become executive vice-president for human resources at OPG. Don McKinnon, the current president of the union, did not return calls. Neither did Colin Throop, president of the Society of Energy Professionals. Ron Osborne, president of OPG, also declined an interview with eye.
"As a commercial entity, OPG is subject to the same regulatory regime as any other Ontario company, and OPG as a nuclear operator remains subject to the regulations of the Canadian Nuclear Safety Commission [CNSC]," says Osborne’s media-relations spokesperson, John Earl. "Safety performance is measured by a variety of indicators, and OPG operations are subject to a variety of internal and external safety regulations. OPG is confident that safety remains the No. 1 priority for the company."
The CNSC does not deal with emergency preparedness, but it does regulate other safety aspects of nuclear plants, and information can be accessed through federal access-to-information laws.
"We think they’re not a tough enough regulator," says Irene Kock, spokesperson for the Sierra Club of Canada’s Nuclear Campaign. Besides, she points out, how money is spent has an impact on safety. And the CNSC does not review financial information. "There’s a risk that cost-cutting will affect safety," says Kock.
She also believes that the public, monopoly system of the old Ontario Hydro needed to be changed, particularly to allow for independent green producers to sell electricity that is less environmentally damaging. "We’re sort of agnostic on the question [of privatization]," Kock says. "There’s this [misconception] that Ontario Power Generation is a private company. In fact, the province still owns these companies, and it’s in the public interest that the public is able to review these issues."
Energy Probe 