Analysis

How privatized power haunts Ontario politics

Ontarians are being reminded once again that the private companies involved in the electricity system aren't always doing their utmost to keep people's hydro bills low.

Many voters blame high electricity bills on privatizing Hydro One, which could spell disaster for Liberals

A poll taken earlier this year suggests 76 per cent of Ontario voters believe the sale of Hydro One will drive up the price of electricity. (Chris Seto/CBC)

Ontarians are being reminded once again that the private companies involved in the electricity system are by no means motivated to keep people's hydro bills low. 

This reminder comes from a story first exposed by CBC News, then detailed by the auditor general, about power plants "gaming the system" for some $260 million in costs they weren't entitled to.  

The auditor revealed that some of the power plant companies expensed such things as scuba gear and car washes. While those made up only a fraction of the overbillings, they are the kinds of tangible things that enrage people; things they remember when they vote.

Is privatization the only reason why the average hydro bill in Ontario has doubled since the Liberals took office in 2003? Probably not.   

But people sure believe privatization is having an impact, as shown in this poll by Angus Reid Institute. At election time, voter perception is reality and the Ontario Liberals have overseen more privatization of the province's hydro system than any other political party.

That could all add up to big trouble for Premier Kathleen Wynne's attempt to win re-election on June 7.   

Privatizing Hydro One is among the most significant moves Premier Kathleen Wynne has made during her time in office. (Paul Borkwood/CBC)

While the PC government of Mike Harris set the stage for privatization by dismantling the former Ontario Hydro into separate Crown agencies for generating, transmission and system management, it's the Liberals who really embraced giving private corporations the chance to profit from electricity. 

First, as part of efforts to phase out coal-fired generation and make the system less vulnerable to blackouts, the province commissioned a series of new natural gas power plants. Private companies got a big piece of that action, with generous long-term generation contracts. Also, everyone in Ontario knows that cancelling two of those plants (which were to be operated by the private sector) cost the province about $1.1 billion.

Then, the Liberals introduced their Green Energy Program, paying premium rates to wind and solar power producers. While it was derided by many on the conservative side of the spectrum as an expensive and ill-conceived sop to environmentalists, private corporations sure didn't see it that way. For-profit companies jumped on what they considered a lucrative chance to cash in on Dalton McGuinty's green energy dream. 

And finally, the Wynne government sold off a majority stake in publicly-owned Hydro One. It means Hydro One's salaries are no longer disclosed on the Sunshine List, its practices can't be scrutinized by the province's ombudsman, and its books aren't open to the auditor general. 

If elected, an Ontario NDP government under Andrea Horwath would buy back the shares in Hydro One the government has sold to private investors. The NDP has estimated that will cost up to $4.1 billion. (CBC)

The Angus Reid poll mentioned earlier showed 82 per cent of those surveyed opposed the sale of shares in Hydro One, a result consistent with the government's own polls. The pollsters also found 76 per cent believe selling Hydro One will drive up the price of electricity.  

Wynne has said repeatedly that privatizing Hydro One has nothing to do with the size of your power bill. She may be  correct, but that almost certainly doesn't matter when it comes to the election.

Even if Ontarians are wrong in believing the Hydro One sale is to blame for electricity costs, they will not likely be shaken in that belief, and they will take it with them to the ballot box in less than six months.

In the 2003 election, many voters believed (rightly or wrongly) that the Harris government's dismantling of Ontario Hydro was at least partly to blame for the big blackout that August. Those voters helped send the PCs packing. 

In 2011, many voters believed (rightly or wrongly) that wind farms were being shoved down the throats of rural communities and driving up their hydro bills. Those voters helped bust the Liberals down to a minority.

In 2018, voters will have their first chance to let Kathleen Wynne know what they think of her privatization of Hydro One. Stay tuned.  

About the Author

Mike Crawley

Provincial Affairs Reporter

Mike Crawley is provincial affairs reporter in Ontario for CBC News. He has won awards for his reporting on the eHealth spending scandal and flaws in Ontario's welfare-payment computer system. Before joining the CBC in 2005, Mike filed stories from 19 countries in Africa as a freelance journalist and worked as a newspaper reporter in B.C. Follow him on Twitter @CBCQueensPark