Former Hydro One CEO Tom Parkinson’s alleged business expense transgressions and his resulting ouster may have made great political fodder for the government and opposition parties at Queen’s Park and the media who cover the pink palace, but it did nothing to resolve one of the most serious challenges facing our province and its communities – the lack of sustainable hydro-electric power.
Parkinson may be gone, but the lack of a made-in-Ontario power generation solution persists, with little or no thoughtful debate underway in the legislature to resolve it and no significant infrastructure investments on the horizon to sustain it.
All Parkinson’s dismissal did was validate recent criticism leveled by Hydro watchers that when it comes to developing and executing a plan that sustains Ontario’s most important economic development asset – available, reliable and affordable hydro-electric, power – Ontario Premier Dalton McGuinty and his Minister of Energy, Dwight Duncan, aren’t up to the job.
To give credit where it’s due, former Premier Mike Harris acknowledged this and developed a plan to privatize the utility, thus keeping it out of reach of the pol-iticians and bureaucrats at Queen’s Park. While Harris had the right idea, the crown-corporation-to-private-entity handoff was mishandled.
As a result, the new hydro organizations are neither fish nor fowl. They are subjected almost daily to inconsistent direction from Queen’s Park on everything from rates, future generation tech-nologies, infrastructure investments and the make-up of the various boards of directors.
I had the privilege to serve three years on the board of a local hydro utility. Based on my experiences at that level and what I was exposed to at a provincial level, I can assure you that few if any politicians or bureaucrats at Queen’s Park are qualified to manage what is easily the most financially and operationally sophisticated entity in the province. Ontario’s hydro generation service deserves – and requires – professional management that operates outside of the influence of the Government of Ontario.
Parkinson was removed because he was becoming increasingly and openly critical of political interference by McGuinty and Duncan, both of whom would prefer that Ontario’s energy service revert back to a classic Crown Cor-poration. As Parkinson told Energy Probe’s Tom Adams in an illuminating piece Adams authored for the National Post last Dec. 21, “Hydro One is too complex, too valuable and too important to the Ontario economy to be in government hands. Career politicians and me-diocre ex-CEOs are not up to the complex challenge of running companies like these. The price of chronic government interference is enormous.”
The price of that interference is as follows: long-term debt approaching $30 billion, consumer rates that don’t yet represent the true cost of hydro generation but are high nonetheless, and the lack of a hydro generation direction for the future – or a made-in-Ontario backup plan in the event of the failure today of one or more generating stations.
The combination of high debt load and below-cost rates makes it difficult, if not impossible, for Ontario Hydro’s successor organizations to build a sustainable energy infrastructure program for the future. In my view, there are no options other than to retrace steps taken towards privatization by the Harris government and properly implement that original plan. Ontario needs private sector management – and investment – to achieve sustainable, made-in-Ontario hydro-electric generation.
Don’t expect resolution of either the governance question or the future generation strategy until after October, 2007, when Ontarians go to the polls to elect a new government. Until then, let’s hope these are the only hydro matters that remain shrouded in darkness.
John B. Challinor is a communications expert and former city councilor.
