TORONTO – The Progressive Conservatives announced plans Monday to privatize Ontario Power Generation and Hydro One, saying it’s time government stopped running the province’s electricity system.
The Tories want to open the two huge utilities to private investments in a staged process, starting by offering a minority stake to Ontario-based public sector pension funds.
“The goal is actually to make our energy system about affordability and competitiveness, to make sure that businesses have the confidence to invest in our province,” PC Leader Tim Hudak told reporters.
“I’ll have more details in our white paper recommendations, but part of it will call for new investment in OPG and Hydro One through public sector pension funds to start.”
The Tories plan to release their white paper on energy issues Tuesday, saying the Liberals’ policies, especially expensive subsidies for green energy, are driving rates up to unaffordable levels.
The minority stake sales of OPG and Hydro One would be followed by an initial public offering of shares to both institutional and retail investors, Hudak told the Ontario Power Summit last week.
Hudak wouldn’t promise that his plan will lower electricity rates, but said Monday he hopes to get prices under control.
“You know energy rates are the principal costs of doing business, and we’ve seen rates go through the roof with this government,” he said.
“Our white paper hopes to reset the energy policy debate back to affordability and reliability to encourage job creation and so families can pay the bills.”
Energy Minister Chris Bentley said the last time the Tories tried to privatize Ontario’s electricity system 10 years ago it sent hydro rates skyrocketing and had to be quickly cancelled. An IPO of Hydro One was cancelled at the last minute by then-premier Ernie Eves.
“They talk about rates, but their failed policies back in 2002-03, in the course of seven months, increased the rates the equivalent of 60 per cent in the course of a year,” said Bentley.
“The Tory ideas are recycled ideas.”
The Conservatives “virtually gave away Highway 407” when they privatized the toll road just before the 1999 election, and selling off public hydro assets doesn’t make sense either, said Bentley.
“Think of how much further ahead we’d be today if we had the 407 asset in public hands,” he said.
The New Democrats are constantly hammering the Liberals over soaring electricity prices in Ontario, which they say are double those in neighbouring Quebec and Manitoba, but they oppose privatization.
“There’s no doubt we need some new ideas around the table when it comes to our energy system and the price of hydro,” said NDP Leader Andrea Horwath.
“But rehashing the same old ideas that haven’t gotten us anywhere already is really not very helpful.”
Ontario’s long-term energy plan includes a $33-billion program to refurbish its aging fleet of nuclear generating stations and build one of two new reactors — $18 billion for the upgrades at Darlington and Bruce and $15 billion for 2,000 megawatts of new nuclear generation.
The Conservatives say private investors should be on the hook for any cost overruns in the nuclear projects — which are notorious for failing to come in on time and on budget — not hydro ratepayers or Ontario taxpayers.