On a clear day, you can see past the borders

Lawrence Solomon
The Next City
September 1, 1995

Where do I live? Depending on who’s asking and why, I might name my neighborhood. Or I might say “Toronto“. Or “Canada,” if I were visiting a foreign country. Besides being a Torontonian and a Canadian, I’m an Ontarian for some purposes (like buying licence plates for my car), a resident of the Western world when our standard of living is compared with that of people in Third World countries, even a member of Planet Earth when reminded of it by a telecast from space or a canvasser from Greenpeace.

But increasingly I — and probably you — will be thinking of ourselves less as citizens of our country, less as citizens of our states and provinces, and more as citizens of our metropolises and of the world. For although we do live in political jurisdictions called cities, provinces and countries, jurisdictions tend to come and go with changes in the political landscape. Planet Earth, in contrast, has a status independent of politicians — it is not a political entity but a physical place. As are metropolises, whose residents pay little attention to the artificial boundaries imposed on them by politicians. Ask people who live in suburban Markham, Canada’s 23rd-largest city, or Mississauga, our eighth-largest, where they reside and they’re as likely as not to say “Toronto,” the metropolis to which they relate and around which so much of their economic and political lives revolve, even though they vote for no one on a City of Toronto ballot. Unlike countries and provinces, which have but one boundary, an official political boundary that precisely delineates the jurisdictions, metropolises have two boundaries, the political boundary and the one that really counts — its unofficial boundary, as defined by its citizenry.

Like most large cities, Toronto expanded bit by bit, spreading out in all directions as it grew. Sometimes adjacent communities decided to tie the knot and officially join the city. Sometimes they remained politically distinct. Politicians created something called the Municipality of Metropolitan Toronto in the 1950s, and something else called the Greater Toronto Area in the 1980s. But these political designations, though often costly, are mere distractions. The political boundary decides taxes, voting jurisdictions, monopoly franchises. It defines a political monopoly over a geographic area. But it doesn’t override the facts on the ground: In a metropolis, people don’t worry which side of a city line they live or work on.

The citizenry draws the border of the metropolis, and redraws it continually. And a metropolis (or any city) tends to have more staying power than a country, which breaks more often than bends. While ever-evolving, unofficial metropolitan boundaries ceaselessly expand or contract in small increments through natural growth or decay, official political boundaries change by fits and starts, with wars, purchases of territory, secessions or other political arrangements. Take Toronto, once a town in Upper Canada; it became part of a relatively vast Province of Canada in 1841, when Upper and Lower Canada merged to form an expanded political entity. In 1867, this city found itself in the Dominion of Canada, which extended to the Atlantic. Today, the Dominion (although we no longer call it that) spreads from sea to sea to sea.

A Methuselah born in Toronto’s Upper Canada phase would have saluted different national flags over the past two centuries, but remained a Torontonian throughout. In the next 100 years, which might see Canada’s breakup following the departure of Quebec, he might salute the Stars and Stripes (if Toronto found itself in the United States) or a flag of New Upper Canada (if the Western provinces went their own way, and Toronto became capital of a sovereign Ontario). Or the Toronto metropolis could become a state of its own. Methuselah’s passport could change in any number of ways. A Methuselah in a European city, with a much longer history of jockeying between rival states, would have paid tribute to many more national capitals.

Unlike cities, which coalesce where people congregate for mundane reasons — this is where they find customers for their labors, suppliers for their needs — countries often get constituted for loftier reasons, among them to protect religious, linguistic or other group characteristics, to satisfy the territorial ambitions of their leaders or their citizens, or to escape exploitation at the hands of a remote despot. Nations, which, like religions, can inspire great passion and allegiance, can also stoke instability. The peoples who at some point in history saw merit in joining together may at another point see merit in splitting apart. Or, through tradition or force of habit, these disparate entities may remain under central rule long after the defining purposes of their combining have passed.

Governments have a monopoly over rule-making within their borders, which historically they have used to create commercial monopolies in the thousands. These monopolies, which in one form or another have footholds in almost every sector of commercial life, become, to greater or lesser degrees, dependent upon government favors. Most major firms now have government-relations departments to protect or further their interests with governments; from this springs the lobbying industry, and a growing government bureaucracy to deal with its corporate counterparts.

From this monopoly-dispensing power of government springs so much of the government’s own power, a power that is now on the wane. For monopolies are manmade, rooted not in nature but in the ideologies or whims of the governments that created them. And being manmade, they can be overtaken by events, as recently they have been, in growing numbers. Due to communications and other decentralizing technologies, due to free trade, governments worldwide are losing the ability to patrol their political boundaries, to set tariffs and to otherwise control trade. They are losing their ability to enforce monopolies.

As political boundaries fade in importance, so do national and provincial governments, whose powers overwhelmingly derive from their ability to enforce monopolies. And as monopolies break down, companies close their lobbying offices in Ottawa or Washington and turn more energy to courting their customers, their suppliers, their employees. Their orientation turns toward their local community.

The more remote levels of government relinquish control, the more decision-making devolves to local governments and citizens. As monopolies disappear, people become freer to live and work where they choose. The real economy, the real country and the real city emerge.

As a byproduct of the curbing of monopolies and the creation of a freer citizenry, the primary activity of the modern state — the wholesale redistribution of wealth — is being stymied.

Without the ability to carve up a country into franchise territories, as do fast-food franchisers in extracting their due, governments can’t reward (and be rewarded by) favored industries or favored players within industries. Without the quotas and other means that governments employ to keep out cars and textiles from neighboring countries, beer and construction workers from neighboring provinces, taxicabs and power lines from neighboring municipalities, the industries that once enjoyed protection can no longer charge customers more than they would be willing to pay in a competitive marketplace. And without such excess business profits coerced from consumers, business becomes unable and unwilling to finance the social and economic programs that promised so much, cost so much, yet more often than not, failed so much.

Stripped of their cut of the monopoly profits, and unable to borrow any more, stripped of the levers that, with good intentions but counter-productively, manipulated society, governments lose the ability to redistribute income to those it favors from those it doesn’t. Without such patronage payments — from citizen to corporation, region to region, old to young, aboriginal to white man, industrial worker to farmer, uncultured to cultured, immigrant to native-born, city to suburb, and the flurry of other payments flying to and from virtually everyone and every thing in our society — the vast sums so squandered on pork-barrel politics are freed for more productive and more humanitarian uses, particularly for those less well-off, who typically fall by the wayside in the subsidy shuffle. Without the function of patronage, remote governments, and to a lesser extent local governments, become less ambitious, more limited. The citizenry becomes less limited, more ambitious.

The map of the world, as seen from space, shows no countries, no provinces, no states with their straight, precise borders. Instead, the view from space reveals the brilliant blues of our lakes and oceans, the deep greens of our tropical forests, the icy whites of our mountain peaks and polar regions. And here and there, sprinkled among nature’s vast marvels, are human habitats — wonders called cities — the natural homes of man, the places where most of us have chosen to work and to live. Orbiting on a clear day 200 miles above sea level, we can focus on the actual, and forget the illusory.

As artificial boundaries and other monopolies that constrain us fade, they reveal the natural structures governing our lives, not the imagined world of our planners and political masters but the real and surprising world that somehow survives beneath the obfuscation and ephemera. The NEXT CITY’s mission is to peer through the fog; to illuminate details as they come into view; to scrutinize problems that bedevil society, taking inquiry where it leads us; and to point to solutions where they present themselves.

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Presentation to Southern Ontario Area Airports Study

Lawrence Solomon
Consumer Policy Institute
October 19, 1994

Re: Lester B. Pearson International Airport Passenger and Aircraft Traffic Forecasts An Overview

North York, Ontario

Good evening, I’m Lawrence Solomon, Executive Director of The Consumer Policy Institute.

Thank you for the opportunity to address this proceeding concerning South Central Ontario’s needs. Its needs, as you are all too aware, have been seriously misjudged in the past.

We applaud Transport Canada’s decision to leave the airport business – this departure will greatly diminish the likelihood of future miscalculations such as Mirabel and the Pickering lands expropriation, and serve taxpayers and local communities well.

Transport Canada’s forecasts have been so wrong for so long – and seemingly always in the direction of building more capacity well before it would be needed – because they haven’t been tempered by any private sector discipline.

No one lost his job over the Pickering airport fiasco, which cost taxpayers $250 million. No private shareholder has to stop and think about whether a premature investment at Pearson might turn sour. No one needs to worry about being efficient or making a profit, because taxpayers will pick up the tab.

Transport Canada, like other government operations, does not have an incentive to maximize profits – the government’s incentive is to maximize growth. That’s why your forecasts are systematically high, and that’s why the public justifiably distrusts them.

To your study’s question of options at Pearson when it becomes capacity constrained, let me first say that there is no credible evidence that a capacity constraint is imminent – Pearson has no capacity constraint except at peak, and peak management tools – particularly pricing – are capable of eliminating any constraint for the foreseeable future. But in the distant future, the options to allay any constraint will include not just additional runways and rationalized use of the other airports in the region, but road and rail options, and the empowering of local communities with property rights, so that Canadians whose rights are affected by additional flights will have the right to say yea or nay to the new developments.

Now that Transport Canada is abandoning the running of airports, it should also abandon the Southern Ontario Area Airport Study. Our preference is for the federal airports in this study to be placed into private ownership, and where airports have monopoly pricing power they should be regulated by Transport Canada to ensure that charges stay reasonable.

In the UK, the British Airport Authority – which ran Heathrow and 6 other airports in South-East England – was sold to 750,000 British citizens 8 years ago. Heathrow used to be one of the highest cost airports in the world – now it is 24th. Passengers pay lower fares as a result, so they’re winners. Airport shoppers – who could count on being gouged when the airport was run as a non-profit – are also winners – Heathrow’s shops will not be undersold by City shops. Shareholders are winners too – they’re making money hand over fist. And taxpayers are winners – BAA is a big company paying big taxes – previously, the publicly owned authority, like Transport Canada, was a commercial welfare bum.

But the biggest winners of all were Heathrow’s neighbours. Prior to the privatization, BAA planned to build another runway – BAA thought it was needed, the government thought it was needed, the airlines thought it was needed – everyone thought it was needed except for the neighbouring communities who would be affected. After privatization, BAA did its sums and realized that its shareholders would be worse off if the new runway were built … a new runway wouldn’t be needed until 2015!

So BAA opposed the plans fore a new runway, joined the communities who were fighting it, and defeated the government and airline lobby.

If Transport Canada airports were sold to various private interests, and then strictly regulated, Canadians would get the best of all worlds. Our advice to you is to scrap the Southern Ontario Area Airport Study, sell off your airports, and watch the efficiency of the system take off.

Thank you.

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CD Howe Institute Roundtable discussion

Lawrence Solomon

September 12, 1994

Thank you for inviting me to this Roundtable discussion, and for giving me the opportunity to discuss why Ontario Hydro should be broken up and privatized to create a competitive electricity sector. Over the years, the case for privatization has been growing steadily.  Today, I believe the case is compelling, so compelling that electricity privatizations have become commonplace around the world, in developed countries and underdeveloped ones, by socialist governments and by capitalist ones, by progressive-minded, pragmatic governments of all political stripes.  I have brought a map to show you the change over time: (display map now) In some cases, electricity privatizations occurred because of ideology. That certainly was a dominant factor in the case of Great Britain, under Maggie Thatcher. But in other cases, socialist parties, such as the Spanish Workers Party, or the Australian or New Zealand Labour parties, were the agents of change.

In the U.S., President Jimmy Carter, a Democrat, was the progressive. Electricity sector privatizations have one thing in common – they make sense, regardless of your political orientation. They’re happening around the world for the same reason electricity privatization should happen here. Governments need money to reduce deficits or pay down their debt; governments want money for social programs; governments want to restore their credit rating; governments want to promote liquidity in equity markets; governments want to greatly expand and democratize the ownership of equity, to broader segments of the public.

There are two other reasons electricity sector privatization should be happening here: it would help protect the Ontario environment, and it would lower the cost of power, which would promote jobs. To give you an idea of what has been happening with Ontario electricity rates, I’d like you to refer to the study before you, entitled Cross Border Electricity Rates: Ontario’s Loss of Competitiveness.

I would like to ask you to turn to the first graph, which compares Toronto electricity rates to the U.S. average. Until 1978, the U.S. and Ontario had very similar electricity structures, both being monopolized sectors. Some parts of the U.S. – those with abundant hydroelectricity – had lower cost electricity than Ontario, but most U.S. utilities charged more for their power than did Ontario Hydro, because most did not have significant water resources. Overall, the U.S. charged much more for power than did Ontario Hydro.  In 1978, the U.S. federal government, under the Carter administration, passed anti-monopoly legislation that affected all 50 U.S. states. The monopoly utilities challenged this legislation in the courts, and eventually lost when in the mid-1980s the U.S. Supreme Court ruled that the federal anti-monopoly legislation was constitutional. As a result, the utilities were forced to allow competition.

The graph we’re looking at shows the result. With competition now allowed, vast amounts of cheap and clean power began to flood the U.S. market. Coal and nuclear power expansion from the utilities were stopped dead in their tracks. Replacing these expensive and environmentally damaging technologies were safer and more economic technologies: renewable technologies such as windmills, but most of all, high efficiency gas technologies.

Now let’s look at the graph to see what happened in Ontario over that same period, during which Ontario Hydro’s monopoly powers remained intact. As you can see, Hydro’s rates increased dramatically. Rates will need to continue their dramatic increase if the utility is to avoid taxpayer bailouts. If Hydro rates are capped, as the government is attempting to do, the result can only be more debt or a rapid decline of the electricity system’s reliability, or both. Capping rates is not a responsible alternative, but doing what governments everywhere are doing – privatizing some of the electricity sector – would be highly responsible, and simultaneously solve numerous financial problems. Privatization would also eliminate many environmental concerns.

Nuclear power, for example, cannot survive in a competitive system, and would phase itself out. As Mrs. Thatcher found out, nuclear power cannot even be privatized in a competitive system, despite her best efforts. The private sector wouldn’t take the reactors, even for free. To sweeten her offer, Mrs. Thatcher offered the private sector a $5 billion fund for unexpected contingencies, and a continuation of the nuclear industry’s exemption from liability in the event of an accident.

The private sector needed more – at least $20 billion to cover its risks, more than the government could afford. In the end, the private sector simply refused to take ownership of nuclear plants. The UK proved that the marketplace is a powerful environmental ally on other counts as well. Not only did the UK privatization rule out nuclear expansion, it also ruled out coal expansion.  In fact, overnight, 75% of all electricity growth was eliminated, as the private sector realized it could run the existing plants far more efficiently than the public sector had. And that was only DAY ONE of privatization. Soon, the private companies realized that the entire system was so overbuilt that they could prematurely retire existing coal plants.

First a few hundred megawatts were retired, then a few thousand, the amount now slated for premature retirement exceeds 16,000 MW – not just existing coal but also existing oil and nuclear plants. 16,000 MW represents the equivalent of about 30 Pickering-sized nuclear plants. That’s only half the story. While the marketplace is busy retiring these outdated technologies, it is also busy building modern new facilities. The UK’s electricity sector, despite the recession, is in the midst of the biggest building boom since the days of OPEC.  Instead of the polluting coal and nuclear plants the previous monopoly favoured, the UK marketplace is building high efficiency gas generating plants and some renewables – exactly what the marketplace in the US has decided is most economic.  In Ontario, as in the US and the UK, the monopoly chose coal and nuclear. Break up the monopoly and let a competitive system decide, and we’ll find that here, too, high efficiency gas and renewables will dominate new supply, coming in at about half the price.

Much of the new power will be cogenerated by steel mills, pulp and paper companies, and other industries able to produce electricity as a by-product of their existing operations.  Much of the new power will come from dedicated high-efficiency gas-fired electricity plants. Much of it will be provided by farmers, from small hydro plants on their property, from agricultural wastes, and from windmills located on windy knolls that were previously thought worthless. But before investors can confidently invest their money in the electricity sector, they will require secure access.

Just a few months ago, private companies lost tens of millions of dollars in sunk cash when Hydro decided that allowing them to proceed with their building plans would be injurious to Hydro’s bottom line. The Hydro monopoly needs to be broken up.  Here’s how the breakup could occur. I propose that Ontario Hydro, at least for the foreseeable future, maintain ownership of its very valuable transmission system, which is a natural monopoly, and maintain the debt incurred to build the transmission system.

I’d like Hydro to continue to manage the grid. No change there. I also propose that the nuclear division of Ontario Hydro be segregated into a subsidiary called Ontario Nuclear, which would continue to be owned by Ontario Hydro. The debt incurred to build the nuclear plants would remain associated with the nuclear plants.  The nuclear plants would be operated by the very same personnel that run them today. Again, no real change here. The ownership change comes with Hydro’s non-nuclear plants, which I propose be sold off to companies in the private sector.  The power plants could be organized into several competing power companies and sold through a public offering, as the Nova Scotia government is doing with its privatization of Nova Scotia Power, and as many other governments around the world have done.  These plants would be sold with their associated debt, and would fetch for Ontario taxpayers something in the area of $15 to $20 billion. The $15 billion need not come in all at once either – many governments are selling off their utilities in several tranches, and even then on the installment plan.

For example, in the UK only 60% of the government’s stake was sold, and then it was payable in two installments, over the course of two years. Spreading out the revenues is often attractive to governments because it doesn’t overload the equity markets, and so keeps the value of the government’s asset high, while producing a continuing revenue stream for the government.

The revenue stream doesn’t end, even after all the installments are paid, because the new, private sector companies have become taxpaying members of society. If just the non-nuclear stations were in the private sector, annual provincial income tax would come to several hundred million per year, quite apart from the economic growth, and increased tax revenues, that would flow from lower electricity rates.  If all electricity was subject to the same taxes as any other business or another commodity, billions in additional revenues would come in to the provincial purse.  Those revenues could be used to lower taxes for the rest of society, creating a more level playing field. They could be used to lower the deficit or the debt, reducing future interest payments. They could be used to finance our social safety net.

Or they could be used for all three. Preserving the Hydro monopoly requires more government-guaranteed debt, lower economic growth, higher electricity rates, and more pollution. For these reasons, the status quo is untenable, and Hydro’s days as a generating utility are numbered.

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Ontario Hydro Symposium

Lawrence Solomon

February 10, 1994

Eighty years ago, Adam Beck, who began the great enterprise we call Hydro, argued for an electrified transportation sector…In 1915, he organized a march on the legislature to present a resolution asking the provincial government for a subsidy of $3500 per mile for his municipal Hydro railway scheme. By the 1930s, Hydro was operating electric railways in this province.

But Beck didn’t want to stop at transportation. This visionary foresaw a Greater Hydro that ran all of the province’s utilities – not only electricity but also the gas and water utilities, not only transportation but also communications – telegraph and telephone.

Beck said: “If all these systems were joined under central control, say of the Hydro-Electric, one staff could serve all purposes.” He said this to 700 municipal delegates in 1914. It was here he made his famous remark:

“Nothing is too big for us. Nothing is too expensive to imagine. Nothing is visionary.”

The electric railways disappeared in the 30’s, amid scandal and bankruptcy. And the scandals in Hydro’s power business have continued, almost uninterrupted, to this day. Hydro has almost never been out of the public light, requiring Royal Commissions upon Select Committees upon Standing Committees upon DSP Planning Hearing … the controversy and public suspicion surrounding Hydro has never ended.  But I’m confident they will end soon, as Hydro is restructured along the lines occurring around the world – toward a more decentralized model that keeps as a monopoly only that which must stay a monopoly – the grid – and which frees up the generating stations to permit them to compete.  The restructuring is occurring everywhere, but it is most advanced in the U.K., where a coal and nuclear based system very much like Hydro’s was reorganized into one state-owned nuclear generating company, two private non-nuclear generating companies, a National Grid Company, and 12 regional electric distribution monopolies.

What a result! Environmentalists cheered as the restructuring ended nuclear expansion, and even retired some existing stations. They cheered more as numerous coal plants were retired. And again as these outdated technologies began to be replaced by high-efficiency gas technologies and even a little bit of renewables – exactly what environmentalists had argued for years would be most economical. Along with the retirements, the UK has been experiencing the biggest building boom in the power sector since the days of OPEC – and all of it is sustainable technology that is displacing the unsustainable.  Business cheered as well – who wouldn’t, when power rates for 75% of businesses were slashed 10% in the first year, and nearly one-third saved 33% or more. UK industry now pays less for its power than does Germany and many other counterparts in the industrialized countries. And UK industry is no longer subsidized.

UK domestic users are also better off than many of their continental colleagues, with only Irish, Dutch and Greek householders paying less.

And it’s getting even better.

Negotiation completed in the UK last summer involving the 12 distributors, National Power, PowerGen, and British Coal have resulted in a deal to lower rates by 5 per cent over the next five years.  Under the deal, the cost of power sold to the distributors will fall by 17 per cent over the next 5 years – that means a 25 per cent drop in wholesale prices over the eight years following privatization.  Because of the UK’s success, it – and not the US system – is becoming the dominant model for reform throughout the world.  But the UK also provides us with cautions to observe; and I urge Mr. Strong to avoid the errors made by Mrs. Thatcher, for whom ideology was sometimes more important than reality.  When the financial community told her the nuclear plants couldn’t be privatized, she balked, saying of business, “they will take them.”  But Thatcher took a U-turn when they refused, not because they were anti-nuclear, but because they were pro-survival, and the accounts showed nuclear power, alone among the UK’s power assets, to be unsustainable.

Mr. Strong should privatize the rest but keep the nuclear plants in public hands – and watch their value grow – that’s exactly what happened in the UK, where nuclear power’s costs came down and production went up under competition. Nuclear is no longer the laughing stock – and enormous public drain – it once was. Hydro might not be able to build new reactors because they’re still not competitive, but it may be able to recoup much of its loss, and bring back respect for our Candu fleet.

Courage, Mr. Strong! Stick with your agenda and promote and nurture a competitive system. If you do, the consumer, industry, and the environment will all be winners.

Posted in Energy, Utilities_Electric, Utilities_Water | Leave a comment

IPPSO conference

Lawrence Solomon

December 1, 1993

If I were Bob Rae, on assuming power I would have immediately understood that Ontario Hydro was more than a monster out of control, I would have seen Hydro as the biggest impediment to the sound finances required for a progressive social agenda. And I would see as the roadblocks to changing Hydro all the vested interests in public power. Those vested interests being, in different ways, big business and the unions, environmentalists and the captive NUG community. These vested interests have one thing and one thing alone in common: a fear that their special interests would be gored in a competitive environment.

So I would have searched high and low for the right individual to turn things around, someone with a cast-iron stomach capable of imposing wrenching change on the organization, someone with a social pedigree unassailable by my labour and environmental constituents, and at the same time a wizard able to keep enough people off balance and at bay until the curtain on the final act was drawn. I would have searched the four corners of this earth and found my man in Maurice Strong.

I would then support my man Strong in the unavoidable restructuring to come, a restructuring so obvious that only an idealogue would be blinded to its need. When my man Strong concluded, as I would have expected him to, that Hydro’s staff was oversized, I would stand by my man. And I would stand by him when he decided to spin off the core electricity business from the mushy sustainable development businesses, and when he talked about the need to have equity infusions, and all that jazz.

As a socialist I would want to tax and spend as much as possible. An organization the size of Ontario Hydro could ordinarily be expected to pay several billion dollars in taxes into the provincial coffers, but Ontario Hydro pays virtually none. As a social democrat, I would want to do what’s best for the little guy, but Hydro has been hitting the little guy with one rate hike after another.

So I would look to the UK, which is bringing in new tax dollars by the bucketful following a raft of privatizations, and which is doing a capital job of lowering rates for the little guy.

Negotiation completed in the UK this summer involving the 12 distributors, National Power, PowerGen, and British Coal have resulted in a deal to lower rates by 5 per cent over the next five years.

Under the deal, the cost of power sold to the distributors will fall by 17 per cent over the next 5 years – that means a 25 per cent drop over the eight years following privatization. The retail rate decreases which result apply to all the distributors’ customers, not just to the residential customer. In fact, most businesses, especially small businesses, have benefitted even more than the residential customer, and they benefitted instantly.

In the first year of privatization, over 75% of businesses achieved savings of 10% or more, and nearly one-third saved 33% or more.

If anyone has not benefitted from privatization, it is the very largest industrial consumers of power, who lost the great subsidies they had been receiving. But the loss suffered by the very largest customers was temporary – these very large customers are paying the same amount now, in real terms, as in 1989, prior to privatization, only now they’re not subsidized. For other large companies, electricity rates average about 14 per cent less, in real terms, than in 1989.

The biggest winner of all from the UK privatization, however, was the environment. Nuclear and coal expansion both disappeared, and clean NUGs took over. Little wonder the champagne was flowing in Greenpeace’s London office the day the privatization legislation passed.

As a pragmatic politician, I would follow the UK model and structure a sale of Hydro’s valuable assets – everything except those nuclear plants – to protect the environment and the consumer. I would value my coal plants, and my hydraulic plants, and my transmission lines, and prepare to sell them off. Because I want to get the highest possible value for the sale of my assets, I would prevent new capacity – especially NUG capacity – from diluting my own assets’ value. And when I did sell the companies, I would do so in a series of public offerings that was open to everyone, in order to get the highest price for the public purse.

As for the nuclear plants, I’d keep them in public hands and watch their value grow – that’s exactly what happened in the UK, where nuclear power’s costs came down and production went up under competition. Nuclear is no longer the laughing stock – and enormous public drain – it once was. I may never be able to sell the reactors, or to build new ones because they’re still not competitive, but I may be able to recoup much of my loss.

If I were Bob Rae, I’d be pragmatic and not ideological. I’d notice that the UK privatizations generally occurred BEFORE elections, because privatizations are popular. And having gone as far as I have in this province, and suffered all the abuse and P.R. pain that I knew I must, I would accelerate the inevitable privatization in time for the next election, so that I could reap some of the gain.

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