Hydro One Privatization

As you may know, I have long been an outspoken advocate against both the exorbitant prices and other excessive charges Hydro One consumers are enduring, and more importantly, the tens of thousands of customers who have been receiving erroneous bills, no bills, outrageous estimated bills and disconnection notices due to substandard service, lack of diligence and carelessness by Hydro One.

As the Ombudsman office has stated, the level of complaints against this Crown Agency has reached epidemic and unprecedented levels. Poor customer service has only exacerbated the many problems at Hydro One.

With all this being known, there is more that concerns me with the Liberal scheme to privatize Hydro One.

The Liberals are proposing what effectively amounts to a Ponzi scheme; they are selling 60% of an asset that has a $30 Billion debt for approximately $9 Billion, while only retiring about $5 Billion of that debt. Ontario taxpayers will be left with $25 Billion in debt to repay and only a partial asset with a significantly reduced revenue stream to pay the interest, let alone the principal. Should any individual attempt to do this when selling their house or other property, they would be charged and probably found guilty of fraud or conversion of funds.

In addition, while the Ontario government has the lawful authority to dispose of the assets (buildings, transmission line etc.) of Hydro One, they do not presently have the legal or statutory authority to dispose or assign the shares (ownership) of Hydro One. Disposing or assigning the shares, even the offering of the shares prior to receiving statutory authority, would raise allegations of unlawful activity.  We have learned that the Wynne administration has offered shares of Hydro One to the Power Workers Union in lieu of increased pension benefits.

My personal view and opinion is that the electrical transmission corridors and distribution hubs (the system) ought to remain in public ownership and this will not be possible under the Liberal plan. However, as has been shown, the administration and billing is a picture of complete incompetence. I would propose that these administrative and management functions of Hydro One would be best sold to the private sector and run efficiently and competently. 

On a final note and which I often hear, is that we make the bureaucracy of Hydro One more efficient and less wasteful; I’m of the view that while this is a noble hope, it is an impossibility while Hydro One remains both a monopoly and under public ownership. There is one fact that helps to illustrate my conclusion:  In the past twelve years the amount of electricity Hydro One sells per year has not increased, however the number of employees employed by Hydro One has doubled in this same period. We are selling the same amount but with half the productivity and twice the payroll, along with extravagant wage and benefit increases since 2003.  

In summary, while I oppose the current scheme to sell off part of Hydro One, I will always keep an open mind towards any proposals that come forward that may improve the efficiency and effectiveness of the production and delivery of electricity in Ontario.