McGuinty Vows to Kill Deregulation

McGuinty, who formerly supported deregulation, said the Tory government's mismanagement of the file has effectively killed it.

"I will not move to deregulation, I will not move to privatization," he said. "The market is dead."

Premier Ernie Eves responded to public outrage over electricity prices by freezing rates to consumers at 4.3 cents per kilowatt hour and offering rebates retroactive to May 1, when the market was opened to competition.

Prices charged by power producers will still fluctuate, but the government will pick up the difference.

"He dropped a bomb on the province," McGuinty said. "The world changed."

The Liberal leader said he'd keep the price cap in place until 2006, acknowledging the cost will be "billions," to be raised "likely through higher debt at (former) Ontario Hydro."

But McGuinty said his party can no longer commit to getting rid of coal-fired power plants by 2007 because of the shortage of power in Ontario.

NDP Leader Howard Hampton, meanwhile, predicted Eves will not live up to his promise to freeze electricity costs for four years.

Eves' commitment, like one made by Alberta Premier Ralph Klein, has a short shelf life, designed to last only until after the next election, Hampton said.

"Ernie Eves and the Conservatives are trying to buy the next election with the people's own money and as soon as an election is over the rebates will come off, the caps will come off, and people will be screwed again on their hydro bills," Hampton told a press conference.

Besides, he told the Legislature: "The profit-driven producers of hydro ... will never stand for a rate cap until 2006."

Rebates and rate caps in Alberta ended eight months after Klein won re-election, Hampton told reporters.

Ontario Energy Minister John Baird said the province will introduce the bill to freeze hydro rates and will spend about $1 million in newspaper and television advertising to tell the public about its plans.

"I think there's a lot of concern that working families have about the consequences of change in electricity. I think we have a responsibility in government to report back to them on the proposals and we're doing that," Baird said.

The government spent $2.3 million in the spring telling consumers how a deregulated market was good for them.

Alberta NDP Leader Raj Pannu, who joined Hampton at the press conference, warned Ontarians not to be fooled by promises of long-term relief, as Alberta consumers were.

Pannu said despite billions spent on rebates and a price cap, electricity consumers are paying more than they did before the Alberta Tories deregulated the industry.

"Now that rate caps and rebates are history, many Albertans are paying double what they paid for electricity before deregulation, and deregulation promised to bring prices down," he said.

Alberta, like Ontario, is also in the grip of a power shortage, putting further pressure on electricity prices.

"Ernie Eves is following Ralph Klein's playbook. If you go down that road, you are going to pay dearly, just like we did and still are in Alberta." Pannu said.

"Alberta learned the hard way rebates and price caps don't work...I urge all Ontarians to learn from Alberta's mistakes."

The Alberta government, he said, spent some $2.3 billion on rebates and price caps to deal with runaway electricity costs.

"Klein covered deregulation and higher prices just long enough to get himself re-elected." Hampton dismissed the suggestion deregulation in Ontario is dead.

"I say don't be fooled. The hydro privatization and deregulation monster is alive and well.

"Even as Ernie Eves is cutting the pre-election payoff cheques, the deregulation beast is stalking the province looking for new ways to eat people's money."

In the Legislature yesterday, Hampton renewed his call for the government to kill privatization and deregulation of the electricity industry and instead sell power at cost.

"The Liberals and Conservatives can flip and flop and go back and forth to try and hide their position (but) the New Democrats are clear: This is a public utility, it's an essential service, keep it public, operate it on a non-profit basis," he told reporters later.