Blackout shines the spotlight on province's power politics

Parties shift focus to energy platforms
NDP, Liberals and Tories offer solutions

Toronto Star - August 23, 2003
by Caroline Mallan - Queen's Park Bureau Chief

Before last week's blackout, Conservative Energy Minister John Baird joked that he was doing a daily raindance on the rooftop of his downtown Toronto condo and he suspected that his neighbour, Liberal Leader Dalton McGuinty, was doing a sundance.

Up until the lights went out on Aug. 14, there was still some room for mirth about the opposition politicians' warnings that the lights could go out due to a lack of supply on hot, sunny summer days and that the blame would rest with mismanagement of the hydro file by the Conservative government of Premier Ernie Eves.

But after the blackout, the humour has been shelved and the spotlight is shining on each party's energy platform. With a provincial election campaign on the horizon, the party with the most sound energy policies could enjoy a clear advantage on voting day.

NDP Leader Howard Hampton has led the charge on the hydro issue ever since the day former premier Mike Harris announced that the hydro generation market would be deregulated and open to competition and, subsequently, that Hydro One, the provincially owned transmission company, was up for sale. Hampton's campaign platform is entitled "publicpower" and he has spent more than a year touring the province in a publicpower bus preaching his message of a return to public ownership and full regulation of Ontario's power supply.

The New Democrats have called the current rate of 4.3 cents per kilowatt hour a temporary measure meant to buy votes by keeping the cost of electricity artificially low.

"I've said from the beginning, the rate caps are phony. The rate caps are really there for a political reason. The rate caps are there to hide from the voters of Ontario the high cost of privatized, deregulated electricity until after the election."

Hampton says he'll scrap the cap, but adds that he does not believe homeowners and businesses will see the cost of their power soar because the profit-making element of private hydro generators and local distributors will be eliminated.

Hampton's hydro plan also calls for the closing of the province's seven coal-fired generating stations by 2007 and a dramatic increase in windpower and the harnessing of more water-fuelled hydro-power. But there are unanswered questions in Hampton's plan, including where the money for generation expansion would come from given that the hydro customers are still paying a special monthly fee to try to whittle down more than $20.1 billion worth of debt leftover from the former Ontario Hydro that is not offset by assets. In total, Hydro's debt is more than $38 billion.

Like the NDP, the Liberals have also talked about increasing windpower, using smaller waterways to produce hydro-electricity and getting industry to produce its own power and sell it back to the province. But in an interview, McGuinty said that if his party forms the next government, the 4.3 cent price cap will remain in effect until 2006 in order to give the government time to put a full plan in place to ensure enough generation and to give consumers some breathing room before yet another round of massive changes in hydro policy in Ontario. "I don't want to put users through additional instability," he said, of the rate that virtually every experts says is a financial break that will have to be paid for down the road. "I think there are a few things we could do before we shock them again."

But, he acknowledges, after 2006, all consumers should be ready to accept the fact that the days of hydro prices frozen at 1993 levels will come to an end.

McGuinty said that between now and 2006, he aims to offer consumers a break on the hydro bills if they use their power more in off-peak hours when it is less expensive to produce, similar to long-distance call discounts offered by telephone companies.

All three parties are now talking about expanding hydro-electricity generated by Niagara Falls.

For the Tories, acknowledging that the province's energy supply has been allowed to peter out is equated with an admission of failure. The soaring energy prices that hit consumers last summer and led to a hasty retreat from open-market pricing, the 4.3 cent cap and $75 rebate cheques to customer was blamed on an unusually hot summer and some unexpected equipment failure at generating stations. As a result, Ontario had to pay a high price to import more energy from the U.S. — a cost reflected in hydro bills.

If the Tories win re-election, they promise the price cap will remain in effect until 2006 and that in the meantime, new generation will be brought online.

All three parties argue the need for better connections with Manitoba and Quebec to allow Ontario to import more power. The Conservatives have not said what will happen when the price cap expires, with Baird saying only that a panel appointed by Eves to review the state of hydro in Ontario will have a plan in place to keep prices stable and affordable.

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