NOW HYDRO ONE CAN FOCUS ON ITS MAIN JOB
Thomas Walkom Rick Salutin Timothy Dewhirst
Hydro One’s grandiose expansion plans have suffered a severe blow. Good. Maybe now the utility can concentrate on its real job, which is to transmit cheap and reliable electricity to Ontarians.
Wednesday’s decision by Washington State regulators to disallow Hydro One’s proposed takeover of U.S. energy firm Avista Corp. should be no surprise.
The Americans are jealous of their economic sovereignty and wary of foreign, statecontrolled enterprises.
As my colleague Jennifer Wells has written, the proposed takeover also faces a rough ride in Idaho, another of the five states in which Spokane-based Avista operates.
American regulators were particularly spooked by Ontacritics Even after privatizing Hydro One, the Ontario government remains the utility’s controlling stockholder, with 47 per cent of the shares.
rio Premier Doug Ford’s decision this summer to force out not only Hydro One CEO Mayo Schmidt but the utility’s entire board of directors.
The Ontario government could exert that influence because, even after privatizing Hydro One, it remains the utility’s controlling stockholder, with 47 per cent of the shares.
When Ford fired Mayo,
— including me — dismissed his action as a political stunt.
And in some ways it was that. But it was also a signal that Ontario’s government would continue to take an active interest in a company that holds a monopoly over electricity transmission in this province.
Perhaps the government will use that interest to rein in the utility’s obsession with becoming a North American energy behemoth.
Indeed, while U.S. regulators delved into the question of whether the proposed merger with Avista would serve American interests, few asked what the deal would do for Ontario rate-payers.
Taking over a company that provides electricity and natural gas to Oregon, Idaho, Washington, Alaska and Montana might work to the benefit of Hydro One shareholders (including the Ontario government), but it would do nothing to improve the electricity transmission and distribution systems Hydro One owns in Ontario. Nor would it reduce the steep rates Ontarians pay.
In fact, acquisitions like the Avista deal risk shifting Hydro One’s focus from Ontario to the much more lucrative American market.
But that, of course, was always the aim behind the ill-fated decision to privatize Hydro One — a decision that otherwise made no economic sense.
THE COLUMNISTS EVERYONE IS TALKING ABOUT RIGHT NOW ONLY ON THESTAR.COM Rosie DiManno