New power lines to cost $4 billion

The Ontario Power Authority has estimated Ontario will have to spend $4 billion on new high-voltage transmission lines by 2025.

One of the tasks is connecting traditional, big-box generating stations with their markets. Hydro One is currently spending $695 million to string a new line to carry power from the refurbished Bruce A generating station near Kincardine, on Lake Huron, to Milton.

Hydro One faces a second challenge.

The Green Energy Act tilts the provincial power grid away from a handful of mega-generating stations. Instead, it calls for development of hundreds of smaller-scale sites scattered across remote highlands and lakeshores, in rural fields and on city roofs.

A letter written a year ago by then-energy minister George Smitherman to Hydro One set out a roster of projects – most due within the next five years – to connect green energy projects with the provincial grid. The Ontario Power Authority is now assessing the priorities.

As it ramps up spending, Hydro One has asked for stiff rate increases of 15.7 per cent next year, and 9.8 per cent in 2012. In fact, Hydro One had requested a 21.5 per cent increase for 2011 until Energy Minister Brad Duguid urged them to roll it back.

The spending on wires isn't confined to long-distance lines.

Local utilities also face new spending, perhaps none more than Toronto Hydro, which has one of the oldest systems in the province.

A recent inventory of its equipment found that 35 per cent of Toronto Hydro's equipment was older than its expected lifespan.

The utility has drawn up a $1.2 billion plan to drive that figure down to 25 per cent over 10 years, in order to meet what is considered the industry standard.