It is NOT too late to keep hydro public!
PUBLIC VS. PRIVATE
1. Creeping Privatization
Over nearly two decades, a relentless assault on public power
The first big move against public ownership of Ontario’s electricity system came in 1998 with the passage of Bill 35 (The Electricity Competition Act). The Conservative government of Premier Mike Harris introduced Bill 35 to enable the privatization and deregulation Ontario’s electricity system. It opened the door to private power corporations.
All NDP MPPs voted against Bill 35. All Conservative and Liberal MPPs voted for it.
Under Bill 35, Ontario’s provincial and municipal hydro utilities were corporatized – forced to operate like private corporations. This caused a huge increase in charges for the distribution of electricity.
Massive public opposition and a decisive court battle forced the Conservatives to back off their plans for outright hydro privatization. In June 2002, following the court case, the Conservatives passed Bill 58 to remove legal obstacles to future hydro privatization. It is the Conservatives’ Bill 58 that Premier Wynne is using to sell Hydro One.
The next major privatization move was Bill 100, introduced by the Liberal government of Dalton McGuinty in 2004. Bill 100 required that all new, green electricity generation be privately owned. This eventually led to a scandalous wind turbine deal with Samsung. Bill 100 also allowed private power companies to build gas-powered generating stations – and sell the electricity they produced at peak rates. Creeping privatization continued.
The McGuinty and Wynne Liberals have also supported the mergers of municipal hydro utilities – to package them for privatization. Many have already been sold to private owners.
Premier Wynne’s plans to privatize 60% of Hydro One are the culmination of a relentless and often under-the-radar assault on public power.
2. Public ownership = Lower costs
The history of hydro in Ontario proves that private power costs more
When electricity was first introduced in Ontario, it was controlled by a small number of wealthy private owners. They charged 10 cents per kilowatt hour. In 1906, the Ontario government established public ownership through Ontario Hydro. It was a not-for-profit electricity system. The publicly-owned system was directed to provide “power at cost”. Electricity rates were immediately cut by more than half to 4 cents per kilowatt hour.
Under public ownership, the cost of electricity remained virtually unchanged for decades. Immediately before Bill 35 became law in 1998, electricity still cost just 4.3 cents per kilowatt hour!
Both the Conservatives and the Liberals have promised that privatization and deregulation would bring lower hydro bills. Opponents of privatization predicted the opposite: a steep climb in electricity rates – and that is exactly what has happened.
Under the private power policies of the Conservatives and Liberals, electricity rates have climbed steadily upwards from 4.3 cents per kilowatt hour in 1999 to the rates we pay today: 8.3 cents for 12 hours/day, 12.8 cents for 6 hours/day and 17.5 cents for 6 hours/day!
Soaring distribution charges from corporatized local utilities have also caused alarming increases to hydro bills.
Incredibly, Premier Wynne wants us to believe that more hydro privatization would benefit the people of Ontario.
It’s not too late to stop privatization. Join the campaign to KEEP HYDRO PUBLIC!
3. Privatization timeline
As the provincial election of 2003 drew to a close, the NDP took the lead by promising to scrap hydro privatization. Just before election day, Dalton McGuinty stole the election by promising that he would not privatize hydro.
McGuinty told the Toronto Sun Editorial Board, “Deregulation and privatization hasn’t worked and we can’t go back there. I’ve drawn a lesson from that. Number one, we’ve got to keep Hydro public”.
In direct violation of McGuinty’s promise, the Liberal government adopted the Conservatives’ privatization policies. Energy Minister Dwight Duncan told members of the Empire club, “All new generation will be private. Electricity is going to be a great place to invest.”
As new electricity generation was handed to private owners, the threat of privatization of public hydro utilities, like Hydro One, emerged once again.
On October 27, 2014, in the provincial Legislature, NDP leader Andrea Horwath challenged the Liberals about hydro privatization. Finance Minister Charles Sousa replied saying, “We have made it clear that we are not going to sell off our assets.”
On November 3 2014, Andrea Horwath again asked about the government’s plans to privatize hydro. “Despite what the NDP are saying,” replied Premier Wynne, “we asked the council to retain the government’s long-term ownership of these assets. In fact, what Ed Clark said, on October 17: ‘We recommend keeping all three companies—OPG, Hydro One and the LCBO.” So, in fact, there is not a sell-off of these companies, as the NDP would like people to believe.’”
Premier shocked even members of her own party when she announced on April 16, 2016, that she would sell 60% of Hydro One to private owners. Everyone knew that the Liberals had not sought a mandate for privatization of Hydro One during the 2013 provincial election.
Not a single Liberal MPP had the courage to challenge this betrayal of the public interest.
The KEEP HYDRO PUBLIC campaign is determined to hold Premier Wynne and every Liberal MPP responsible for this betrayal of the people of Ontario. Join the campaign! It is not too late to keep hydro public: 70% is still owner by the public.
Hydro One belongs to all Ontarians
The government is looking into privatizing publicly-operated local utilities, including Hydro One and what are called “local distribution companies” or LDCs. These are the utilities that receive electricity from power plants and bring it from the major transmission lines to every home and business in our community. The sell-off is being considered to put more money in government coffers. But does the available evidence support privatizing local hydro? Are private distribution utilities more efficient or lower cost than publicly owned ones?
The answer is no.
*Total Cost per Customer
Will public or private cost you more?
We have compared publicly disclosed data on Ontario’s public and private local utilities (called “Year Books,” in energy sector jargon), including both financial and performance measures. This includes Ontario’s two 100% privately owned utilities; four utilities in which private ownership has a 10% interest, and the province’s publicly-owned utility.
In every case, the group of (partly or wholly) privately-owned utilities performed worse than the wholly publicly-owned utilities. There is no evidence of private ownership leading to cost savings. And if it costs more to serve each customer, each customer – like you and your family – can expect to pay more for their electricity
The US experience
A US study by John Kwoka, Jr. reviewed 15 surveys of public and private LDCs, and analyzed data collected from 182 private and 454 major public utilities. Of the 15 studies Kwoka surveyed, 8 found public firms to have lower prices or higher efficiency; four found public and private firms to have equal costs or efficiency; two found mixed results, and just one found private firms to have higher efficiency. This evidence therefore tends to show that public firms are more efficient or have lower costs than private ones.
Kwoka’s own research showed residential customers of publicly-owned LDCs paid lower prices than their private counterparts.