Legal ruling puts Tory credibility in doubt

Hamilton Spectator, Saturday, April 20, 2002
Editorial

The court decision that says the Ontario government does not have the right to sell Hydro One to private interests is more important for what it symbolizes than anything else. Does this surprising development mean the Eves government will scrap its plan to sell Hydro One? Possibly, but on balance it doesn't seem likely that the decision will delay the opening of the market to competition May 1. There's a good chance it will delay the sale of Ontario's hydro grid, but there is no indication yet that the ideologically driven Conservatives will waver in their determination to get out of the electricity business.

Whether this is good or bad depends on where you fall in the debate over privatizing the electricity market. It's our view that a competitive market in and of itself isn't necessarily a bad thing, provided appropriate safeguards, regulations and resources are in place to protect consumers.

There's the rub. Has the government done its homework? Does the Ontario Energy Board (OEB), the body charged with protecting consumers from abuses that could occur in a private market, have the mandate and resources it needs?

Is there an overarching strategy that will ensure a competitive market balances the need to invest in adequate and sustainable capacity while still allowing private operators to prosper?

Will Ontario avoid the sort of price and supply spasms that convulsed California and, to a lesser extent, Alberta when their markets were privatized?

The government insists the answer to all these and other concerns is a clear and confident yes.

Fair enough. But until yesterday, the Tories also insisted they were on firm legal ground with their plan to sell Hydro One. The fact that a court of law has ruled precisely opposite doesn't exactly inspire comfort in the validity of the remainder of their assurances. If they were wrong about their authority to sell the electricity grid, what else are they wrong about?

To begin with, consider the OEB. Even though thousands have complained about unscrupulous tactics employed by electricity marketers, and some retailers have admitted they routinely broke the law, not a single fine has been levied by the OEB. In fact, the OEB says it's in the business of regulation, not investigation. It doesn't even have an enforcement staff. There is, on balance, more than adequate reason to believe the government hasn't done its homework here. And the stakes are very high. No one knows to what extent prices might spike or fluctuate wildly, at least in the short term, even if safeguards and regulations are in place.

The government says consumers will be protected, but its own watchdog admits it isn't qualified to fulfill that role. The Tories insist the private sector is best placed to ensure the system will have adequate capacity to ensure consistent affordable supply. Given yesterday's court ruling, why should Ontarians believe that?

The Eves government has a long way to go before Ontarians can feel confident. It should slow down, and delay the privatized market if necessary, until it can demonstrate it has its act together.

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