OEB chief puts emphasis on reliable hydro supply

- Making sure the supply of electricity is reliable is an important consideration in setting prices and market rules for electricity, says the chair of the Ontario Energy Board.

Howard Wetston told a meeting of the Canadian Club recently that it's important to get the right balance in setting regulations that protect consumers.

"Reliable supply is a critical element of consumer protection," he said. "Protecting consumers is not just a matter of having lower prices.

"It is (also) about ensuring that utilities are financially viable so they can make the necessary investments to continue to provide reliable and quality service to electricity customers."

Starting in May, 2005, the energy board will be responsible for devising a mechanism that will set consumer prices that are stable and reflect actual market costs.

Wetston said markets dominated by one firm can skew natural economic forces.

Private generating companies have complained that Ontario's market is dominated by Ontario Power Generation, the provincially owned firm that owns more than 60 per cent of the province's generating capacity.

OPG's dominance — plus the fact that the province sets prices for consumers and small businesses, who account for 50 per cent of power purchases — distorts the market and make it hard to raise capital, they contend. In answer to a question, Wetston said firms sometimes dominate a market without exercising undue influence.

He said it's up to the province to address the concerns raised by the private generators.

"There is no question a long-term strategy with respect to pricing will have to take into account that issue," he said.