Ontario could be another Texas-style disaster in the making

Ontario and Texas have some disturbing similarities.

The Texas disaster is a prime example of what happens when private ownership of electricity systems operate in a deregulated market whose main purpose is to maximize profits. You can see how electricity affects every aspect of our lives in areas like water and telecommunications. Disruption is a serious threat to life.

Texas Gov. Greg Abbott was warned years ago, but protecting profits was more important to him than fixing the problem. Premier Doug Ford is acting the same way. He is doing everything he can to protect private interests in the hydro sector with electricity rate subsidies.

Ironically, Texas implemented its deregulated electricity market in 2002, the same year Ontario’s deregulated electricity market was implemented. Ontario’s deregulation legislation turned every single provincial and municipal hydro utility into a for-profit corporation.

Ford’s latest hydro subsidy that artificially lowered the rate to 8.5 cents a kilo watt hour extended to Feb. 9 again to Feb. 22. Then what? When this latest subsidy ends, we will still have to pay inflated hydro rates and still have to pay the multibillion debt on all those subsidies as well.

Every provincial government since the deregulated electricity market opened has implemented rate freezes or subsidies to try to fix the problem of spiking hydro rates and Ford has tried to do the same thing to keep his election promise. He has continued with more than $6.5 billion in subsidies since he was elected and more recently in the provincial budget with another $1.3 billion to subsidize business hydro rates. The running total is north of $12 billion and now more added debt.

Deregulated electricity markets were implemented around the world including Ontario with the exact same promise of “lower rates.” Electricity markets are notoriously easy to manipulate. The Texas market was disconnected from the national grid to ensure a higher market price. This made the crisis there much worse.

In the 1990s, Enron invented the deregulated electricity market and convinced jurisdictions around the world to buy into the plan.

Despite spectacular Enron-designed electricity market failures in California, Montana, India and elsewhere, promising “lower rates” Mike Harris had Enron and a who’s who of private interests design the electricity market for Ontario. Enron went on to be convicted of one of the biggest corporate frauds in history.

Most jurisdictions that tried deregulation, including Alberta, have now publicly admitted failure. The exception being Ontario. Ontario has yet to admit its experiment with hydro deregulation is a complete failure and a very costly one at that.

Hydro deregulation is working very well for private investors, just not for everyone else. Time to learn the lessons of Texas and get off this pathway. In order to successfully rebuild Ontario’s economy after the pandemic, the deregulated electricity market must be closed and rates regulated first.

It is the electricity market where private power profits are relentlessly driving up rates and no amount of rate subsidies or freezes are going to fix this problem. Premier Ford is only hiding and protecting profits with this scheme. It’s long past time to close this phoney market. It’s just the first step to regaining control of our electricity system. We certainly don’t want to be the next Texas!