Commentary

Lawrence Solomon
CBC commentary
March 10, 1993

The man has performed miracles since taking the helm of the continent’s most inefficient utility barely three months ago. Think of the challenge before him last December: an organization that needed 24% more staff than Canada’s other utilities to produce a kilowatt hour of power . Wages and benefits that averaged $69,000 per person. Tottering nuclear plants that needed billions in repairs. The Darlington nuclear plant, $10 billion over budget. A $6 billion commitment to throw money away on conservation programs so flawed that consumers would often have gotten more environmental benefits using the dollar bills as insulation and stuffing them in their attics. The result of these Hydro excesses: rate increases of 30% over the past three years, and status as Canada’s #1 polluter.

Maurice Strong has stopped the Hydro monster, often with the grudging support of those most affected. 6,000 jobs are being eliminated, most of them voluntarily; the bulk of the conservation boondoggle has been short-circuited; a massive capital expansion has been slashed, as has billions which were scheduled to be spent on misguided attempts to salvage the company’s ruinous nuclear program. Rates are to be capped at inflation over the rest of the decade.

But the monster is far from slain. With its monopoly in place, Hydro remains over $30 billion in debt, its rates twice as high as necessary. It’s still the country’s #1 polluter, still an entirely unaccountable organization not subject to the discipline of either regulators or the marketplace.

Maurice Strong – the only strong man the utility has had to answer to in decades – made it plain that a logical next step is breaking up the Hydro monopoly, privatizing some of the pieces, and letting competition work its magic. In the last few years, that’s been the prescription for monopolies around the world, from Sweden to Singapore to the former countries of the Soviet Union. In the U.K., which Mr. Strong has presented as a model, rates plummeted and environmental well-being soared as the private sector rapidly phased out polluting coal and nuclear technologies in favour of cleaner and cheaper natural gas and renewable energy technologies.

But some of the best examples of the merits of competition can be found right here at home. BC Hydro several years ago abandoned its penchant for building more and more large dams in favour of an open market system that promoted private generation as an alternative. And Alberta’s largest utility, TransAlta, as well as Newfoundland Power & Light, have followed suit by volunteering to lose their monopoly and let competition reign. Even Hydro-Quebec .

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