October 28, 1997

Fears We May Freeze in the Dark, and Ontario Hydro’s Hemispheric Expansion Plan Exposed

Ontario Hydro has decided to increase some industrial rates in 1998 and will decide whether to increase general rates for the Province at a meeting November 10, according to internal correspondence provided to the Ontario Select Committee on Ontario Hydro Nuclear Affairs from Ontario Hydro’s chairman William Farlinger to Ontario’s new Hydro minister, Jim Wilson, dated October 15. Ontario Hydro is now seeking a special exemption from the Harris government from the existing legal requirement to present the rate increases to the Ontario Energy Board for public review before they are implemented January 1, 1998. The pressure to increase rates results from Ontario Hydro’s faltering nuclear program.

The same letter, which reports on Ontario Hydro’s October 7 Board meeting, states that Ontario Hydro is reviewing the reliability of the province’s electricity supply and is considering its "ability to meet Ontario customer capacity and energy demands during the winter of 1997/98." The utility informed the minister that "continency plans are in place to provide load relief, if necessary." At the same meeting, Ontario Hydro’s board approved a deal to supply Shell Canada Products Limited with subsidized power in return for Shell’s agreement to shelve its self-generation plan for three years. At its meeting April 15 of this year, Ontario Hydro agreed to subsidize Domtar in return for its agreement to not self-generate at its Packaging Facility in Red Rock for five years. Industrial self-generation is usually at least twice as energy efficient as comparable Ontario Hydro’s generation and reduces demands on the Provincial grid.

Unchastened by its investment and operational problems in Ontario, the documents reveal that Ontario Hydro is planning a large investment and marketing expansion in the Western Hemisphere. Ontario Hydro’s "Corporate Strategy", adopted July 9, 1996 but not previously released publicly, indicates that it is targeting "a North American market for energy sales and services." The "Corporate Strategy" says that Ontario Hydro will "search for merger and acquisition opportunities as well as strategic partnerships and alliances with other energy and services providers which will allow commercial growth and add value for consumers." At the March 14, 1997 meeting, Ontario Hydro’s directors decided to invest up to US$100 million in the Latin America electricity sector. At the June 10 meeting of Ontario Hydro’s board, it approved in principle "a Gas Convergence Strategy which establishes a continent-wide presence in energy trading/marketing as a new core business involvement."