Hydro One privatization would cement Ottawa’s raw deal

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Written by Joanne Chianello 

When it comes to our hydro in this city, amalgamated Ottawa is not one big happy family.

And if the provincial government moves ahead with its vague plan to sell private investors anywhere from 15 to 60 per cent of a stake in Hydro One, the city’s hopes of bringing all citizens under a single power plan could be dashed.

“From a high-level principle position, if we’re going to have a municipal utility, it should include all members of the municipality,” says Cumberland ward Coun. Stephen Blais. “It doesn’t make sense for neighbours in the same city paying two different bills.”

The odd situation dates back to the Mike Harris government days, which ordered both amalgamation and the dismantling of Ontario Hydro. The two plans were not co-ordinated and when Hydro Ottawa was formed, it did not include the customers from what were then thought of as rural areas.

More than a decade later, many of the Hydro One areas aren’t that rural — they’re the fastest-growing communities in Ottawa (think Stittsville or Cumberland). And the arbitrary boundary between Hydro Ottawa and Hydro One customers often creates bizarre circumstances as the city develops.

Consider that the Place d’Orléans shopping centre straddles the hydro border, so that some of the retailers pay Hydro Ottawa rates, and some pay Hydro One rates.

The situation is creating two classes of hydro-paying citizens in the same city and, politically speaking, it’s not fair.

Hydro Ottawa has been trying to buy the Hydro One customers almost from Day 1.

In 2002, then-mayor Bob Chiarelli complained it was disgraceful that rural schools were paying $10,500 more per year through Hydro One than their city counterparts. At the time, the provincial energy minister — one John Baird — refused to sell Hydro One customers to Hydro Ottawa at a rate the municipal utility was willing to pay.

Over the past decade, there have been further discussions and much political blathering about bringing Hydro One customers into the local fold, to no avail.

There are two broad concepts where the utilities disagree, explained Hydro Ottawa chief executive Bryce Conrad. The first is what the customers are worth: Hydro Ottawa values them based on what it charges its own customers, whereas Hydro One is basing the price of customers on its rates. Secondly, Hydro One’s customers within the Ottawa boundary are fairly easy to serve, and they subsidize the harder-to-get-to parts of the province. Losing Ottawa customers would be costly to the whole Hydro One system, and it wants additional compensation for that loss.

With the province musing that it might sell a piece of Hydro One, the issue has never been more pressing.

“If Hydro One does sells a piece of the company . . . that will almost certainly end any possibility of bringing a single hydro company to the city of Ottawa and having equity for all Ottawa residents,” Blais said.

Earlier this year, Conrad sent a formal request to the Ontario government to purchase Ottawa’s 45,000 Hydro One customers. And he met with provincial officials where he “pressed the case that this is the time to right a historical wrong.”

And wrong it is. The provincial government of the day forced amalgamation on municipalities claiming many savings (which may or may not have materialized), then double-crossed residents by forcing them to pay higher hydro fees than their friends who live across the street (literally, in some cases).

Blais argues that if there was ever a time that Hydro Ottawa and Hydro One could come to a deal, this is it. The municipal utility wants the customers, and the province wants revenue.

But it’s not as easy as that, of course. Those easily served Hydro One customers in Ottawa and other urban centres make the utility that much more valuable, hence more appealing to private investors.

Hydro Ottawa has one last shot at buying back the customers who — by geography, by philosophy and by plain common sense — belong to the municipal utility. And as Bob Chiarelli, the local politician who first pointed out this political miscarriage, is now the provincial minister of energy, we should expect an advocate at the cabinet table.

It’s still not too late for the provincial government to do the right thing and unite our municipal family under one city-owned utility.