Tom Adams
The Toronto Star
April 3, 2001

Note: The Toronto Star did not run this letter, written by Energy Probe’s Tom Adams, despite receiving it on the same day as the final installment of its Walkom three-part energy series.

Dear Letters Editor:

Your "Electric Shock" series which ran from Mar. 30 to April 2, claims that the "real winners" at running power systems are government-owned and not competitive. In making that argument, you are ignoring the monumental environmental and economic problems created by government-owned systems like the former Ontario Hydro. The history of Ontario Hydro shows how "power at cost" can lead to long-term hits on taxpayers and the environment. Ontario Hydro racked up $31 billion in taxpayer-guaranteed debt, off-book financial obligations officially estimated at $5 billion, and a legacy of nuclear waste.

Your author, Thomas Walkom, claims that consumers don’t respond to electricity price changes. Yet his own series disproves that claim. He repeatedly cites anecdotes of consumers very much responding to price, such as two Alberta smokestack industries switching production to night shifts.

Both Alberta and California confirm the lesson in his anecdotes — consumers do conserve in response to price increases. In the event of real supply crunches, a market-based power system can use price as an extra tool to protect supply. California’s regulated system did not use price, with disastrous results.

Walkom inaccurately reported the system for electricity pricing in Ontario’s new electricity market, and my concerns about coming rate increases, which primarily relate to the regulated components of consumers’ bills — government action, far from protecting consumers, has allowed increases of up to 88%.

Getting government out of the power business and forcing producers to compete can work for consumers and the environment. On top of the 29% decline in residential electricity cost, the U.K.’s electricity restructuring, whose power system once looked a lot like Ontario Hydro, has demonstrated huge environmental gains following privatization and competition. Acid gas emissions, the number of nuclear plants in service, and greenhouse gases have all been slashed, mostly due to surging gas-fired generation and conservation. Renewable energy has increased by a factor of almost three.

Tom Adams
Executive Director, Energy Probe

Editor’s note: Renewable energy in the U.K. in 1990: 1.1 million tonnes of oil equivalent. In 1999, the amount of renewable energy was 2.9 (mtoe).