Ontario electricity prices are out of control – leaving many Ontarians struggling with their hydro bills. Bob Mok article series shed light on reason behind the skyrocketing hydro prices and what structural changes are required to reduce them.
Recently, the Ontario Government took actions to assist the consumers to lower their payments for the out-of-control Hydro (electricity) rates. Initially the Province will remove the eight per cent provincial share of the HST as of Jan 1, 2017 that will result in savings of $130 for the average household each year. Shortly after that announcement, the government took cost saving measures by canceling all future large-scale wind, solar, biomass (and, irrelevantly, hydro) projects — about 1,000 MW of excess capacity.
Many viewed these actions as taken too little and too late. Some even suggested that actions were taken only because the next provincial election is only 18 months away and that the Government wants to appease the Ontarian voters.
The causes for our very expensive Ontario electricity rates are many. The major contributor was identified as the “Green Energy Policy” promoted and implemented by the Provincial Liberal Government over the last decade. This policy was based on the ideology to eliminate intensive Carbon emission coal-firing Power Plants and replace them with renewable resources such as Wind Power and Solar Power.
The idea may have its merits but the improper implementation and introduction at the in-opportune timing of decreasing demands for electricity doomed the project. In order to understand this very complex issue, I will explore Ontario's electricity industry, the various electricity production methods, the distribution costs, and their history over a series of articles.
成立于1905年的Ontario Power Commission是全世界首个公有的电力公用事业机构，负责在尼亚加拉瀑布和安省发电，以为包括多伦多在内的16个城市供电。1906年，Ontario Power Commission更名为Ontario Hydro Commission，后来又改名为Ontario Hydro。我上大学时曾在Ontario Hydro做过实习生。
The Ontario Power Commission was the first publicly owned electricity utility in the world. It was established in 1905 and took responsibility for the generation of power at Niagara Falls and Ontario for transmission to 16 municipalities including Toronto. In 1906, it was renamed Ontario Hydro Commission and later on, Ontario Hydro. I worked for Ontario Hydro as a co-op student during my University days.
In 1925, Ontario Hydro created the largest Hydroelectric plant at the time at Niagara Falls. In the 1950-1960's, coal fired electricity generating stations were built and operated. In 1971, Nuclear Power Generation Plants came on line, starting with the Pickering Generating Station to the East of Toronto.
Ontario Hydro在1972年成为国有企业，这也使得其变身为以盈利为目的的实体，而不再是纯粹以公共利益为目的的企业。当时，核电只占到安省发电总量的30%。Ontario Hydro也因为收入有限而背负上巨额债务，而这也就是其一直未能摆脱的“结构性赤字”的开始。
Ontario Hydro became a Crown Corporation in 1972. This made it a profit driven entity rather than an organization solely used for the public good. At that time, Nuclear plants accounted for 30% of the electricity capacity. It also created an enormous debt for Ontario Hydro which cannot be supported by its revenues. This was the start of a “structural deficit” condition from which there is no recovery.
虽然Ontario Hydro在1990至1994年间将其电价上调了40%，但在1993年却仍然巨亏$36亿元。这主要是因为Ontario Hydro员工远超其他行业员工（包括管理层和工会）的高额薪水推高了该公司的运营开支。但是作为毫无竞争压力的垄断企业，其根本无需改革以简化其操作流程。
Ontario Hydro raised its rates by 40% from 1990 to 1994 but still lost a staggering $3.6 billion in 1993. Lucrative salaries above those of other industries for its workers (both management and union) drove up Ontario Hydro's operating expenses. As a monopoly, it has no competitive pressures necessary to reform and streamline its operations.
1998年，迈克尔•哈里斯领导的安省保守党政府通过Bill 35（能源竞争法案），以期解除行业管制并打破垄断局面。随着《电力法》生效，Ontario Hydro被拆分成五个在不同领域各司其职的新实体。它们分别是：
1）Ontario Power Generation (OPG)——负责发电
3）Independent Market Operator (IMO)——负责监测和规划电力需求
4）Ontario Electrical Safety Association (ESA)——负责安全事务
5）Ontario Electricity Financial Corporation (OEFC)——负责债务清偿
In 1998, the Ontario Progressive Conservative Government of Michael Harris passed Bill 35 (the Energy Competition Act) to try and deregulate the industry and break it up. With the Electricity Act, Ontario Hydro was split into 5 new entities, each responsible for different areas and responsibilities.
1)Ontario Power Generation (OPG) – power generation
2)Hydro One – Power transmission and distribution
3)Independent Market Operator (IMO) – Monitoring and planning power needs.
4)Ontario Electrical Safety Association (ESA) – Safety
5)Ontario Electricity Financial Corporation (OEFC) – Debt Retirement.
This was supposed to allow an open wholesale electricity market, provide retail choices at the consumer level, and give access to the power transmission grid for new competitors in power generation. Unfortunately, the promising new system failed to live up to its expectations.
In the next article, we will continue to examine the evolution of the OPG and Hydro One and follow their path to see why their deficits spiraled out of control.
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