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T.O. Hydro bills may drop 20%
Deregulation, amalgamation

Toronto Sun - Thursday, June 11, 1998
By James Wallace, Queen's Park Bureau

Toronto consumers should be the first to benefit from plans to deregulate Ontario Hydro, Energy Minister Jim Wilson said yesterday.

Transmission charges currently amount to 25% of the bill for electricity in the city, compared to 8% in Mississauga.

The amalgamation of Toronto's six local utilities and plans to end Ontario Hydro's 92-year monopoly should substantially cut power bills in the city, he said.

"There's real savings to be had there, some very near-term gains," he said.

Toronto Hydro has estimated bills could drop as much as 20%.

Wilson introduced legislation this week that will bring competition to Ontario's energy market by the year 2000.

The law will allow consumers to shop for electricity the way they now can shop for natural gas. It will also let the private sector invest in Hydro's successor corporations or start up new generating companies.

The legislation will divide Hydro into two commercial entities -- a generating company and a transmission, distribution and retail corporation.

It will also allow the marketplace -- and not the government -- to regulate the cost of electricity after the year 2000.

Natural gas marketing firms will be licensed and forced to abide by a code of conduct.

Liberal MPP Sean Conway said he's worried "big business" will persuade the government to pass on an unfair share of Hydro's estimated $50-billion debt to consumers.

"Normally in these things, Joe Q. Public gets stuck," Conway said. "This debt has to be managed ... but how do you do it in the most fair way?"

Wilson vowed average users won't get stuck with the debt.

"They will pay not a penny more than they do now in terms of debt service charges," he said.

A third of the average electricity bill homeowners now pay goes to service Hydro's debt and that shouldn't change after the market is deregulated, Wilson said.

"There's just no scenario we can see that would cause that to happen," he said. "Hydro bills should decline."

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