A five point plan for hydro common sense
It's a mess.
It's an awful mess, the hydro situation in Ontario.
It's a mess of the Liberal government's making and sadly the two governments-in-waiting don't have much of a plan to clean it up.
The Wynne plan is to have three non-government entities borrow tens of billions of dollars at above government rates and account for it all 'off book'. This will drive hydro rates down in the short term and send them soaring in the long term. In the interim, the government's fiscal position appears better than it is. Our Auditor General calls the accounting 'bogus'.
The NDP is no better. It would buy back all the shares of Hydro One trading on the stock market. That's a $5-billion buy-back at current market prices. It would also cap executive compensation at the hydro utilities.
PC leader, Doug Ford made his first major hydro-related announcement today. He would fire Hydro One's CEO and the entire Board of Directors. It's great politics, a sure-fire winner, steeped in symbolism. It won't do much to lower hydro bills.
The decisions made by the McGuinty and Wynne governments will haunt Ontario for many years. The next government must start somewhere and waste no time fixing the hydro mess.
I have five ideas:
1) Stop! Don't procure any new generation! Stop it! Don't buy any more power, of any kind (wind, solar, hydro-electric, nuclear or gas). Ontario has a massive surplus of electricity. It does not need any more. The government's generation priority should be the nuclear refurbishment.
2) Sell! This won't be popular. The next Ontario government should not buy back millions of shares of Hydro One. It should sell the remaining stake it owns. We are far down this road. Hydro One is a private company, owned by shareholders and not taxpayers. The province can't audit the company. It's workers don't appear on the sunshine list. It's beyond the reach of the Ombudsman. The province should regulate hydro rates and little else. The next government should also explore the sale of OPG. Bruce Power's ownership structure is preferable. Bruce is owned by OMERS , TransCanada Corp. and its employees. Such sales would generate billions (close to $20-billion). The government could then use the proceeds to fund other priorities.
3) Dispatch! Priority access to the electricity grid must go the lowest cost producer. This is not the case. The Green Energy Act legislates the opposite. Wind and solar, the most expensive electricity, is granted priority access to the grid. Lower cost, zero emission nuclear and hydro-electric power is curtailed, costing ratepayers hundreds of millions of dollars a year. This must end.
4) Small! The next government should encourage the purchase of small scale renewable technology for home use. The micro-fit program should be cancelled. Ontario's experience with large, industrial scale wind and solar farms has been a disaster. They don't provide the electricity when needed. They create very few jobs, post-construction. Modest rebates on the purchase of exciting new technologies, like solar shingles or home solar storage units, should be rolled into the Save on Energy program.
5) Review! The next government must launch a full review of contracts signed under the Feed in Tariff program. It must compile a list of contracts that can be cancelled by statute. While NAFTA and WTO complicates matters, there is the potential for tens of billions in savings. Even if the government must use the hammer of legislative supremacy, it will be worth the effort.
None of these are easy. Some wouldn't be politically popular. They wouldn't happen overnight. Slogans aren't enough. And the province can't afford another decade like the last.