Ontario Electric Power Deregulation Would Be Good for Market, Quebec

MONTREAL -- (CP) The deregulation of Ontario's electricity industry would be good for Hydro-Quebec, the utility's vice-president of production said Thursday. Thierry Vandal made the comments after a speech by Derek Cowbourne, vice-president of Ontario's Independent Electricity Market Operator, to the Quebec Electrical Industry Association. Cowbourne's speech extolled the virtues of opening up Ontario's electrical industry to competition, citing benefits such as a choice of suppliers. Cowbourne's organization is an independent body mandated to ensure the supply of electricity meets consumption in Ontario, which has $10 billion in annual domestic sales. "It's a significant addition in terms of open market in the northeast part of the continent," Vandal said of Ontario. "The relative importance that market may have is really going to be a function of the characteristics, the prices, that are going to surface. I couldn't predict that at this stage. We'll see as we go." The Ontario government said its goals in throwing open its energy market to competition are to encourage new sources of power and to ensure choice and protection for consumers, a reliable energy source and environmental protection. Cowbourne noted in his speech that in the early 1990s, Ontario Hydro had an accumulated debt of more than $30 billion while its century-old monopoly had left consumers without choice. Premier Mike Harris has said his government will implement deregulation carefully to avoid rate hikes and blackouts such as those experienced in Alberta and California. Cowbourne warned against predicting that all markets would have the same problems with deregulation, noting that every one is different. After his speech, he said he didn't anticipate problems in the implementation of Ontario's plan. "Clearly, the government in Ontario, like the participants in Ontario, don't want to see a California happen in Ontario," he said. Cowbourne agreed that there would be opportunities for his Quebec audience with chances to invest in Ontario and to work on generation and transmission projects. But not everyone is an unabashed fan of deregulation for Ontario. Tom Adams, executive director of the Energy Probe consumer watchdog, said there's reason to view deregulation with some trepidation. "The official view is that everything's fine but scratch the surface and things are anything but (fine)," he said from Toronto. He said electricity prices are going up significantly and that consumers haven't had much warning or information about the trend. He said Ontario was attracting only a small amount of new private-sector investment, noting this was one way California and Alberta had run into trouble. Adams also noted that Ontario had recently curtailed the independence of some of the agencies responsible for regulating the power sector and said that the electricity debt - one of the reasons for deregulation - was rising rather than falling. "It suggests that Ontario, rather than having turned the corner in any kind of fundamental way, is still in this declining cycle." Source: The Canadian Press, 2001