NOW HY­DRO ONE CAN FO­CUS ON ITS MAIN JOB

Thomas Walkom Rick Sa­lutin Tim­o­thy De­whirst

StarMetro Calgary - - BIG OPINIONS -

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.

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THE COLUM­NISTS EV­ERY­ONE IS TALK­ING ABOUT RIGHT NOW ONLY ON THES­TAR.COM Rosie DiManno

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