Canada

Canada

ELECTION COULD IMPROVE MARKET

The stranglehold which Canadian utility Ontario Hydro has maintained on the provincial electricity market may be loosened to allow greater competition following the Ontario election of June 8, according to the Independent Power Producers' Society of Ontario (IPPSO). IPPSO believes this would improve the prospects for renewable energy development in the province.

The Ontario Progressive Conservative (PC) party decisively won the election and has formally pledged to privatise the non nuclear assets of Ontario Hydro. Moreover, in its response to an IPPSO survey, the PC party declared that the provincial government "should facilitate competition, not prohibit it." The PC would create a "level playing field where the allocation of resources is based on market factors, not government handouts."

The PC party election manifesto "The Common Sense Revolution," termed as a right wing populist manifesto outside the party, says that privatisation may be necessary for better utility service and for a five year freeze on Hydro's electricity rates. The freeze would "give consumers, employers and industries guaranteed stability in planning their budgets." The PC party said that in office they would use the proceeds of privatisation to pay down Hydro's $34 billion debt.

Skyrocketing Hydro rates (a 40% increase from 1989 to 1993) had given rise to what PC leader Mike Harris called a "previously unthinkable situation: Ontario was losing industries to locations across the border in the northern US because of significantly lower electricity rates." The rate and debt increases were largely due to the commissioning of the $10 billion, 3740 MW Darlington nuclear generating station east of Toronto, which was ordered by a previous PC government in 1975.

Under monopoly public ownership, Hydro has "stifled" wind energy and other renewable, green energy projects including cogeneration, small hydro and biomass, says IPPSO. The group has criticised the small size of the utility's renewable energy technologies (RETs) programme (Windpower Monthly, June 1995), and has campaigned for binding regulation of Hydro and a more competitive electricity market.

Pitted against the PCs in the election were the incumbent New Democratic Party (NDP) and the Liberals. The NDP was responsive to the pro-public ownership concerns of public sector unions, including the 14,000 member Power Workers' Union at Ontario Hydro, and favoured the status quo in ownership. The Liberals sought to privatise only minor portions of the huge utility. However, all three parties supported IPPSO's call for an "independent regulatory body, similar to the Ontario Energy Board, with binding regulatory authority to approve rates and facilitate competition in the electricity sector." According to IPPSO, "The parties are no doubt expressing the frustration of the electorate when they assess the $34 billion debt load Hydro is carrying and the rise of open and competitive markets around the world."

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in

Windpower Monthly Events


Latest Jobs