TORONTO, Dec. 16 /CNW/ - Selling off either Hydro One or Ontario Power Generation would be a bad, bad idea, says the leader of Ontario's energy professionals.
"Selling off our electricity utilities was a bad idea under Mike Harris, and it's a worse idea now," says Rod Sheppard, President of the Society of Energy Professionals. "These companies are very important tools in the government's plans for green electricity and green jobs. They're vital to bringing Ontario's economy back from the brink."
"OPG and Hydro One - publicly-owned assets - are necessary but under-utilized vehicles for achieving Ontarians' climate change goals," Sheppard said. "Hydro One, for example, is the only entity that can build transmission at a reasonable cost to the far-flung locations where much of tomorrow's green energy will be generated."
Sheppard was reacting to Premier McGuinty's hiring of CIBC World Markets and Goldman Sachs to write a "blueprint for possible privatization of agencies ... such as Hydro One Inc., the Ontario Lottery and Gaming Corporation, the Liquor Control Board of Ontario, and Ontario Power Generation."
The Society says stability in the electricity sector through public investment is crucial for achieving goals all Ontarians share, including:
- Reindustrializing Ontario with green jobs flowing from
emissions-free nuclear power, and renewable and alternative electricity
- The renaissance of the auto industry in Ontario, utilizing
electrification of transportation (e.g. electric cars)
- Equitable participation of First Nations in electricity industry
development on their lands
"Selling off Hydro One and OPG just to cope with this year's deficit would mean giving up on some very important goals," said Sheppard.
"We're paying good money to attract reluctant private investors, when it's entirely in the government's power to direct OPG and Hydro One just to get the job done."
The Society of Energy Professionals represents more than 7,500 professional employees-engineers, scientists, middle management and information technology personnel in Ontario's electricity sector. The Society supports the government's conservation and renewable-power goals, and the need of the public for affordable, reliable, and secure electricity.
McGuinty flips, flops, then flips again!
If Premier Dalton McGuinty is serious about selling off OPG and Hydro One, it will mark a full circle in the twists and turns of his views on the electricity system.
In a report in the Financial Post in March 2002, the then-leader of the opposition said:
"I support a genuinely competitive marketplace for the generation of electricity," Mr. McGuinty said in a statement released yesterday. "By this, I mean a marketplace in which there will be several kinds of generators of electricity - public and private, large and small, and those providing green power. Unfortunately, the Tory government has ... ignored the advice to break up the former Ontario Hydro's monopoly in generation."
He also fully supported the privatization of the electricity grid (Hydro One) when it was initially announced. Later, when campaigning against the sale, he claimed he'd always opposed it, but had to recant in a Canadian Press report: "I changed my mind," he said, while still asserting that he'd "honestly believed" he'd never supported it.
In 2003, the Globe and Mail reported:
Mr. McGuinty also changed past Liberal policy on electricity Monday by rejecting private participation, stressing that a Liberal government would be committed to public ownership. "All public hydro assets will remain in public hands," including all generating stations and the electricity grid, he said.
Revenue streams: It's important to note that, were the Provincial Government to sell Hydro One and OPG, they would lose the revenue streams that these companies now provide, as follows:
Dividends: Both companies pay yearly dividends to the Province. In the 2007 and 2008 fiscal years, Hydro One paid $325 million and $259 million respectively. OPG appears not to have paid a dividend in those years-its last dividend was paid in the 2006 FY.
Payments in Lieu: Both companies make yearly payments in lieu to the Ontario Electricity Financial Corporation which are roughly equivalent to what they would pay in combined federal and provincial corporate income taxes if they were private corporations. If they are sold, the Province will no longer be paid the federal portion. In 2007 and 2008, that amount for Hydro One was about $118 million and $65 million respectively. For OPG, the 2008 figure was about $105 million.
SOURCE SOCIETY OF ENERGY PROFESSIONALS
For further information: For further information: Brian Robinson at (416) 716-6438