Don’t unplug the hydro rate debate
The promise of lower rates never materialized, in fact the opposite has happened
In February, the Financial Accountability office announced that Doug Ford would not be able to keep his election promise to lower hydro rates by 12 per cent and rates would in fact be going up by more than four per cent. It was also reported that Ford has spent $6.9 billion a year subsidizing hydro rates and looks to spend $118 billion more to subsidize hydro rates in the future.
That is on top of the billions already spent bringing in the deregulated electricity market, rate freezes and subsidies since 2002. This is money that is desperately needed to fix the enormous problems in health care.
In the 1990s, Enron electricity markets were all the rage. Just like the con man who goes from town to town working his scam, the con man came calling in Ontario. Shortly after Mike Harris was elected in 1995, he went fishing in the Northwest Territories with Kenneth Lay, chair of Enron, who went on to be convicted of one of the biggest corporate frauds in history.
Right after Harris passed all the deregulation legislation in 1998, he had Aleck Dadson of Enron and a who’s who of private interests design Ontario’s electricity market. At the time critics asked: how do you have a market for something you cannot store or stockpile?
By 2007, rates had doubled. By 2010, rates had tripled and today including all those extra charges, rates have more than quadrupled. This despite endless promises from the Progressive Conservatives that deregulation would “lower rates.”
There is a long list of Enron electricity market failures from around the world, including Alberta and Ontario. The promise everywhere was lower rates.
It is hard to believe that 20 years after Harris left, deregulation is still costing us a fortune.
Why has no party ever asked what is causing high and spiking hydro rates?
Every single government since Harris brought in the deregulated electricity market has had to implement rate freezes and subsidies costing billions. Obviously, there is a fundamental problem.
There has been much talk about democracy. Here’s how democracy was subverted to steal your hydro system.
In 1905, the Conservative government of James Whitney, Sir Adam Beck and William Hubbard put into law that if any government ever wanted to sell a public asset such as hydro, they must first by law hold a binding public referendum.
On his deathbed, the father of public power Beck said, “I wish I could have lived long enough to build a band of iron around hydro to keep it safe from the politicians.”
The decades pass and hydro becomes very much like water. A necessity you cannot live without. And then one day the politicians that Beck warned about showed up and were elected.
That referendum law was in place until the Progressive Conservative government of Harris with the stroke of a pen eliminated it in the 1996 Bill 26, the Omnibus bill. There has never been a mandate to deregulate or privatize hydro and your legal right to vote on the matter was simply taken away.
In the four provincial elections since 2003, all three parties have refused to debate the failure of hydro deregulation and the fact that it is still causing soaring rates. In 2003, the main campaign plank of the NDP was “Public Power.” The NDP could rightfully claim they were right all along. Why aren’t they?
This election, we simply cannot afford to let our political leaders avoid it any longer. We need a debate on the question. Why do we still have an electricity market designed by Enron in Ontario?
Now, not only do we still have to pay those higher rates, we still have to pay the debt on all those subsidies, as well as being inflationary. The Enron electricity market must be closed and rates regulated. The party that promises to do that will likely win the election.