Ontario plans to sell 60% of Hydro One

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Big changes are coming to Ontario. The Premier announced today that beer will be sold in some grocery stores in Ontario, in what Kathleen Wynne called “the biggest shakeup” to beer sales since prohibition in 19-27.

But the “big shakeup” in the legislature today wasn’t about beer at all. It was all about Hydro, and the Premier’s absence during question period. It ended with several NDP Mp’s getting kicked out of the legislature – including party leader and Hamilton Centre MPP Andrea Horwath . Lisa Hepfner reports on the Hydro sale – and the subsequent protest in the legislature.

The NDP are not happy about the sale of Hydro One, nor are the Pc’s. PC Critic Vic Fedeli says the beer announcement was just a diversion. Kathleen Wynne did her news conference under a huge headline, ‘Beer in grocery stores’ – but Vic Fedeli says we should be more worried about what the Hydro asset sale says about our debt and deficit.

While the Premier was explaining the sale of hydro to media “Every detail of today is about maximizing performance for consumers.”

The NDP were demanding answers. “Phone the Premier and tell her to get over here and answer the questions of the opposition” said Andrea Horwath during question period. Her NDP colleagues banged on their desks in agreement.

The plan is to sell 60 per cent of Hydro One, gradually over the next few years. Ontario will keep 40 per cent control. No one else can own more than ten per cent. “The people of Ontario keep the largest share of ownership, gain bills that can be invested, avoid having to borrow money, and strengthen the protections that ratepayers enjoy” says Premier Wynne. The payoff is four billion dollars to spend on infrastructure. But first laws will have to change – now any money from the sale of Hydro One has to go towards the electricity debt.

Banker Ed Clark chaired the advisory council. “There’ll be a number of legislative amendments to permit us to do what we can do. I can tell you the business community of Toronto thinks the core barrier to growth is our poor infrastructure. And they would say, I think quite heartily yes. We’d rather you spend the money to fix up the infrastructure than hold an asset that’s implicitly earning five per cent rate of return.”

The other change is a merger of distribution companies including the Hamilton/ St. Catharines Horizon utilities. The NDP is concerned rates will go up. “The major shareholder of Horizon Utilities is the city of Hamilton” says Andrea Horwath. She says city council is worried, but not according to Hamilton Mayor Fred Eisenberger “due diligence needs to be done, but we’ve seen benefits of previous mergers in Hamilton …. so i think there’s certainly room for more shareholder value and minimizing rates.”

The government can’t say for sure, but it hopes rates will go down when distributors are more efficient. The PC’s say the Liberals are playing a shell game. “What happens next year when you don’t have another item to sell?” questions Vic Fidelli.

“People might have easier access to beer but they’re not going to be able to keep it cold. Because they won’t be able to keep their fridge plugged in. Because they won’t be able to afford hydro” says Andrea Horwath.

The Premier noted that Hydro One does not set rates. The Ontario energy board does and will continue to. So no one really knows what will happen to electricity rates once all these changes are in place.