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Hydro fumble

Toronto Star - June 24, 2000

For neoconservatives, profit is what makes the world go round. As they see it, the lure of profit breeds competition, which drives efficiency, thereby keeping costs and prices down.

This is the model the Ontario Conservatives applied holus-bolus to their restructuring of Ontario Hydro.

Never mind that Ontario's municipal electrical utilities have an admirable record of providing consumers with a cheap, reliable service even though making profit was never their goal. In Mike Harris' new Ontario, municipal utilities were to be driven by profit, too.

Needless to say, the municipalities caught on fast. The more profit they could squeeze from their electrical utilities by raising rates, the more they could make up for provincial funding cuts.

Call it a tax hike by another name. But where local politicians could be blamed for a tax hike, they could pin an increase in electricity rates on the province's restructuring of the electricity market.

And why not? If the city sold Toronto Hydro to private investors, the provincial rules would permit the new owners to boost rates. So Toronto figured the utility should make money for it, too. Accordingly, it asked the Ontario Energy Board to approve a rate hike of 6 per cent.

Knowing he would shoulder the blame for increases in rates, Energy Minister Jim Wilson did an abrupt about-face and introduced legislation this week to stop muncipalities from profiting at the expense of electricity consumers. But Ontario Energy Board Chair Floyd Laughren says that because Toronto Hydro applied for its 6 per cent rate increase before Wilson tabled his new legislation, the board is free to consider the application on the basis of Wilson's previous rules.

So it now appears that Wilson's bungling of the local utilities issue in a deregulated market could cost the average household $84 more over the next 12 months.

Blind adherence to ideology certainly doesn't come cheap.

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