Scott Anderson
Now
January 17, 2002

A power war is being waged on doorsteps all across the city. Local and multinational electricity retailers are aggressively trolling for customers, trying to sign up as many as possible before the competitive market opens on May 1.

In the middle of the free-market frenzy is our newly reformed, publicly owned Toronto Hydro, mandated to champion green energy – and now expected to be a money spinner for City Hall as well.

But can the company be both? Can Toronto Hydro succeed in the cutthroat free market and at the same time lure consumers away from cheap and polluting nuclear and coal-fired energy? The company, not to mention its co-chair, councillor and environmentalist Jack Layton, believes so.

But another local ecologist and energy specialist, Tom Adams of Energy Probe, thinks Toronto Hydro’s just posing green. "When Toronto customers are signing with Toronto Hydro, what they need to know is that they are promoting (nuclear) power," says Adams. "So much for Toronto Hydro’s green credentials."

Adams is referring to the fact that the electricity Toronto Hydro currently sells to city residents and businesses comes from the provincial power grid, which includes 39 per cent nuclear power, 32 per cent fossil fuel (6 per cent natural gas, 26 per cent coal), 27 per cent water power and 2 per cent alternative sources like wind and solar.

Layton insists that the provincial government has left Toronto Hydro with no choice. "They’ve left us with coal-fired plants that are absolutely filthy. We could have bought more power from coal-fired plants , but then we’d be killing even more Torontonians. Unless we have alternate sources of power, we have to turn to nuclear in the interim and Niagara Falls and the other baseline services that we’ve got."

But the public company says it’s committed to becoming the province’s leading promoter and producer of green energy. On the agenda: the construction of a gas-powered co-generation plant in the port lands, two wind turbines (one at the CNE and the other at Ashbridges Bay), harnessing methane gas from the city’s Thackeray landfill site, as well as a solar hot water pilot project and an anaerobic digestion plant that will convert compostables into energy.

Sounds great. But will those initiatives make a dent in the market?

The co-gen plant planned for the port lands won’t be operating before the end of 2004, and Toronto Hydro can’t say how much power it will produce. The financing for the project has yet to be secured. And even if Toronto Hydro and its corporate partners get the plant up and running, there’s no guarantee they will be able to sell the power at competitive rates.

"It’s got real environmental benefit to it," says Toronto Hydro Corp vice- president Blair Peberdy. "The challenge is, though, can (Hydro) produce power out of there that’s competitive?"

Toronto Hydro says the wind turbines and landfill gas site will be online later this year. But, combined, they will only produce enough power for 1,150 households.

Adams says it’s all good PR for Toronto Hydro but won’t capture the market from coal and nuclear power.

"Landfill gas, run of the river, solar on your rooftops and windmills basically don’t count if our strategy is to try to get rid of coal , because putting all of these things together is just not going to make a difference," says Adams. "The combination of (low) output and (high) cost makes it a non-viable strategy."

Adams says Toronto Hydro is not focusing enough on buying or producing lots of cheap energy from co-generation. "The point is, we can do co-generation on a massive scale," he says. "The TransAlta project (a private co-generation facility being built in Sarnia) is going to be generating the power of maybe 1,500 wind turbines."

While Layton and others on city council are using Toronto Hydro as a tool for changing energy consumption, councillors also expect it to be a cash cow. And the company can only do that by selling competitively priced energy.

Toronto Hydro Electric System, the offshoot that services and maintains the city’s power lines, pays $60 million back to City Hall each year. The city uses this money to offset capital costs.

As well, Toronto Hydro Services Energy, the newly formed retail arm, will also be expected to provide dividends to the city once the market opens and it starts selling.

Adams argues that this creates "some risks for municipal democracy" because "a lot of the city’s expenditures are reliant not on taxpayers, but ultimately on electricity ratepayers."

But Layton disagrees that there will be pressure on Toronto Hydro from council to be profitable first.

"Our view is that if our company is not advanced environmentally, then whether or not we should have a public energy company would come into question," Layton says. "I think council is interested in having such a company, in part to advance the sustainability agenda. That’s certainly what I’m doing on the board."

Tom Adams’ response to this article:

Now magazine missed the worst part of Toronto Hydro’s green scam. As I told your reporter, notwithstanding its pretty pictures of a few token wind turbines, the high-priced electricity contracts that Toronto Hydro is foisting on an unwitting public are backed to a substantial degree by supply contracts with Bruce Power. Toronto Hydro is directly and by choice financially supporting Bruce Power’s activities, which include the restart of two dilapidated reactors at Bruce A.

Once, before our city had dollar signs flashing in the eyes of its utility, our city government took a noble stand against nuclear insanity, backing a constitutional challenge against the Nuclear Liability Act, a law that shields nuclear operators like Bruce Power from liability in the event of accidents. Now, in its electricity contracting, Toronto Hydro has no higher standards than the multinational-backed Direct Energy, which is also helping nuke Bruce. So much for Toronto Hydro’s green credentials.