The Rural Voice, 2000-07, Page 50BRUCE
Email: bruce@ofa.on.ca
website www.ofa.on.ca/bruce
County Federation of Agriculture NEWSLETTER
446 10th St., Hanover, Ontario N4N 1P9
519-364-3050 or 1-800-275-9551
• The Rural Voice is provided to Bruce
County Farmers by the BCFA.
Will the effect of privatizing Ontario
Hydro make the cost of electrical
energy prohibitive in the Province of
Ontario? How will this affect the
farming sector or any other sector
business competing in the world
marketplace with their products?
One of the major contributions to
the prosperity of this province was
reliable, economical, electrical energy
provided by Ontario Hydro.
Let's look at how we got to this
point. In 1870 there wasn't any
electricity produced in Canada for
lighting or manufacturing purposes but
by 1880 there were 343 companies
producing electrical power. In 1913
Cataract Power Company charged
domestic users in Hamilton, Ontario
eight cents/kWh and Ontario Hydro
charged 1.5 cents/kWh. (we are
presently paying eight cents/kWh 87
years later).
Sir Adam Beck, one of the original
founders of Ontario Hydro Electric
Power Commission of Ontario made
the following statement: "The private
electrical companies were planned and
organized to collect not one, but a
series of outrageous profits. What was
in reality one company, was organized
as three, one generating electricity, a
second transmitting power, and a third
distributing power, so that three profits
might be paid out of exorbitant rates
charged to the customer." "Ontario
Hydro must remain as a Commission of
the Province, as politicians and big
business cannot be trusted." On March
15, 1925, to friends who had gathered
around his death bed, Sir Adam Beck
said the following: "I had hoped to live
to forge a band of iron around the
Hydro to prevent its destruction by the
politicians."
Ontario Hydro operated successfully
as a Commission of the Province for
over 70 years, providing power to the
people of the province, reliably,
46 THE RURAL VOICE
Privatizing Ontario Hydro
economically, and at cost.
In the 1970s the Provincial
Government decided to make Ontario
Hydro a Corporation of the Provincial
Government so that they could have
more control over the "top of the
house". At this point the deterioration
of Ontario Hydro started. Interest on
debt for new facilities started to be
capitalized on the premise that the
future customer should pay for the debt
of the new facility. This sky rocketed
Ontario Hydro's debt so that by 1999 it
reached $39.1 billion. Ontario Hydro
then divided into several companies
and distributed the debt as follows:
Ontario Power Generation Inc. (OPGI)
- $5 billion; Ontario Hydro Services
Company Inc. (OHSCI) - $10.5 billion;
Independent Electrical Market
Operator (IEMO) - $300 million. This
left a stranded debt of $23.3 billion.
OPGI arid OHSCI will be required to
pay off over time $15.4 billion of this
stranded debt through dividend
payments in lieu of taxes. The $7.9
billion left is the residual stranded debt
that will be added to electricity bills for
up to 10 years.
Effective April 1, 1999, Ontario
Hydro and its successor companies will
be exempt from the Freedom of
Information Act. "Having the utility
covered by the act has led to repeated
political embarrassment for the
government i.e., high salaries and
benefits paid to employees brought in
from the U.S.A. and lucrative financial
dealings with senior Progressive
Conservative Party officials" (Globe &
Mail February 17, 1999). Taking effect
this year, the new Ontario Power
Generation Inc. must reduce control of
its existing generation capacity to a
maximum of 35 per cent of the Ontario
market within 10 years of the market
opening. This is in spite of: presently
having the capability to produce more
than 100 per cent of the province's
needs, and, irrespective of the costs of
electrical energy.
From the preceding facts, I believe it
is evident that the cost of electrical
energy will significantly increase. We
will be billed by three companies, one
producing, one transmitting, and one
distributing the electrical energy, and
all making a profit. How can small
business compete in the world
market?0
- Submitted by Ernie Young
Bruce Township Director
BRUCE COUNTY FEDERATION OF
AGRICULTURE
PLEASE NOTE: There will be NO
Board of Directors' meeting in July
Next meeting will be
Thursday, August 28, 2000