The Ontario government’s energy astrologists have come up with a new sound bite — sell Hydro One and use what the Globe and Mail calls the “windfall” to fund the construction of subways in Toronto. Electricity ratepayers won’t be harmed one little bit say the folks who also say Ontario’s power exports are profitable, conservation programs are saving you billions, and the rate impact of wind power is trivial.
Here are some of my interviews from earlier this week arguing that selling Hydro One would be a good idea in principle if it can reduce government involvement in the power system but explaining why ratepayers and taxpayers will get screwed if the current plan goes ahead.
This is my appearance on BNN attempting to explain what Ontario Electricity Financial Corporation (OEFC) is and how it depends on payments from Hydro One to service its taxpayer-backed debt.
Here is my interview with Tom McConnell on AM610 CKTB on the privatization of Hydro One. (starts at 8:30) Key points: Hydro One is 100% mortgaged so there is no windfall available from a sale, Hydro One’s income stream is already spent and you can’t spend a dollar twice, OEFC is the government’s electricity bank although it doesn’t bother to issue annual reports any more, OEFC’s revenues from sources including the Debt Reduction Charge on your bill and payments from Hydro One are not enough to save OEFC from accumulating more debt, the value of Hydro One is undermined by its unfunded pension liabilities and excessive worker compensation, Ontario’s privately owned but publicly regulated natural gas distribution model is something we should seek in electricity, and my forecast that Wynne’s Hydro One sale proposal will get pulled off the table.
Here is my interview with Devon Peacock on AM980 CFPL. (2:50 until 11.10) Topics include “Smart Meters” as an example of the burden of government’s on-the-spot-guidance, there is no windfall available from Hydro One, a missing piece in Ed Clark’s analysis of hiving off pieces of Hydro One, factors impairing the value of Hydro One, ingredients for successful privatization include transparency and trustworthy public utility regulation, and how Wynne’s current plan would create a new hidden electricity tax.
Maybe one of the private power companies with lots of capital, for example the size of NextEra Energy, just might be interested in such a deal?
Some corporation or other may be stupid enough to week the “windfall”, and if they did, rates would triple in quick time.
…reap the windfall, as in reap the whirlwind…
Seems the”green” bonds that were supposed to finance subways didn’t sell too well to investors?