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Ontario Hydro at the Millennium

Ontario Hydro at the Millennium: Has Monopoly's Moment Passed?

Copyright Date: 1996
Pages: 424
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  • Book Info
    Ontario Hydro at the Millennium
    Book Description:

    A collection of ten papers presented at the University of Toronto Electrical Power Project Conference in 1995, Ontario Hydro at the Millennium is a review of the electrical power industry in Ontario and its future. Legal experts, policy makers, economists, and stakeholders in the industry express their views, consider the implications of privatization, and investigate various options and strategies. With the structural changes that are taking place in the electrical power industry Ontario Hydro at the Millennium is an important and timely investigation of Ontario Hydro as it charts a course for the twenty-first century.

    eISBN: 978-0-7735-6612-5
    Subjects: Technology

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vii)
  3. Introduction
    (pp. viii-xi)
    Ronald J. Daniels

    This monograph is the culmination of an extraordinary collaborative project between the Faculty of Law, University of Toronto and Ontario Hydro – the University of Toronto Electric Power Project. The project was established in 1994, and was designed to involve several of Canada’s most distinguished academic commentators from a wide range of different disciplines in an intense year-long investigation of the possibilities for, and challenges of, significant restructuring of the electric power industry in Ontario.

    The rationale for the project was rooted in the dizzying pace of change confronting the electric power industry throughout the world. By and large, the most...

  4. Contributors
    (pp. xii-xiv)
  5. The Future of Ontario Hydro: A Review of Structural and Regulatory Options
    (pp. 1-68)

    As Ontario Hydro approaches both the millennium and its own centenary, what does the future hold for one of the dominant institutions in the economic and political life of Ontario over the past century? The genesis of Ontario Hydro lies in the creation by the government of Ontario in 1906 of a permanent Ontario Hydro Electric Commission, initially to construct and operate a provincial transmission grid which would deliver power from privately owned hydro electric generators on the Niagara River to various municipally owned distribution systems in Southwestern Ontario. In a history that has now been well documented, under the...

  6. Regulation of Transmission and Distribution Activities of Ontario Hydro
    (pp. 69-102)

    Ontario Hydro has been under increasing pressure over the last four years as its plan for aggressive facilities expansion has coincided with both a stabilisation in the demand for electricity and increasing concerns over the impact of Hydro’s borrowing on the province’s debt capacity, as Ontario’s DBRS bond rating has declined from AA in 1990 to A(High) in 1993.¹ Until very recently Hydro worked on a “bundled” service basis without explicit prices for the different services provided by its constituent parts. However, without the signals provided by those prices, management behaviour was not necessarily consistent with either efficient cost management...

  7. The Regulation of Trade in Electricity: A Canadian Perspective
    (pp. 103-168)

    In this chapter we attempt to provide a comprehensive overview of trade in electricity and its regulation from a Canadian perspective. We are grateful for comments and criticisms on an earlier draft of this paper by participants in the University of Toronto Electric Power Project, as well as Michal Gal. Section I describes the technical and economic basis of trade in electricity in the North American context. Section II examines the existing domestic regulatory framework for international trade in electricity in both the United States and Canada, at both the federal and state levels.

    The international legal framework for trade...

  8. Hydro Restructuring and the Regulation of Conventional Pollutants
    (pp. 169-210)

    Restructuring of electricity generation in Ontario may result in competition between Ontario Hydro and non-utility generators (NUGS) to install new generating capacity in the future.¹ Some scenarios involve dismantling of Ontario Hydro and the privatization of the parts including individual generating stations. Here we will consider a more modest scenario in which the thermal division of Ontario Hydro continues as a public entity, but NUGS are allowed to enter the generation market without the approval of Ontario Hydro. In fact NUGS have already installed some capacity in Ontario in recent years. Some NUGS, such as pulp and paper mills, generate...

  9. Re-Aligning Human Resource Management and Industrial Relations: Can Hydro Become a Mutual Gains Enterprise?
    (pp. 211-230)

    The electrical power industry around the world has undergone major changes in its technology, regulatory environment, and fundamental economics in the last twenty years. These changes have accumulated into a qualitative shift away from its traditional natural monopoly status. Ontario Hydro has definitively moved away from its traditional, centralized, top-down organizational model. The question now is: What is the appropriate human resource management and industrial relations model to meet the interests of the corporation and its employee groups?

    From the beginning of electrical industry regulation in the early 1900s until recent decades, incremental technological advances in standard turbine, generator, and...

  10. Comparative Cost of Financing Ontario Hydro as a Crown Corporation and a Private Corporation
    (pp. 231-276)

    The movement towards privatization and deregulation in the electric power industry in the United Kingdom and the United States has encouraged interest in that course of action in Canada. Privatization and reliance on market competition instead of government to regulate the industry has been advocated largely on the grounds that the cost of the service to consumers would thereby be reduced. However, the comparative fuel, labour, and other production costs under the two regimes are measured with great difficulty, so that the case for or against government ownership or control has been made typically on the basis of limited and...

  11. Nuclear Environmental Consequences
    (pp. 277-326)

    Is the choice between new fossil-fuelled generation and new nuclear generation fully informed by the likely environmental consequences of each? Only if the answer to this question is yes can we be confident that the correct choice will be made between these energy sources when increased demand requires capacity expansion in the future. We will review the literature on the environmental consequences of Canadian nuclear generation, including mining, operation and decommissioning of nuclear plants, and on the extent to which nuclear generation is not bearing its full social costs. We will look briefly at the corresponding literature on fossil-fuelled generation,...

  12. The Distribution of Electricity in Ontario: Restructuring Issues, Costs, and Regulation
    (pp. 327-354)

    The purpose of this study is to provide an analysis of the distribution segment of the Ontario electricity industry - its structure, costs, and regulation. The current world-wide debate on the restructuring of electricity industries is focused on introducing competition to the generation segment of electricity industries. While it would appear that a broad range of alternative distributor configurations could co-exist with deregulation and competition in generation, there are certain issues which need to be resolved either a priori or conjointly. Among these are whether any economies of scope will be foregone as a result of restructuring, the obligation to...

  13. In Search of the Cat’s Pyjamas: Regulatory Institutions and the Restructured Industry
    (pp. 355-390)

    This paper has been written with three principal purposes in mind.¹ First, rather than be based on separate speculation as to the future of Ontario Hydro, it is designed to build on Ronald Daniels’ and Michael Trebilcock’s contribution to the Conference, “Ontario Hydro at the Millennium: Has Monopoly’s Moment Passed?” (hereinafter Daniels and Trebilcock). Second, in so doing, the focus will shift onto institutional design issues, particularly the relationship which should exist between the envisioned new regulator, the rest of government, and the legislature. Third, contemporary experience with an analogous sector, telecommunications, will be woven into the analysis in order...

  14. Labour Adjustment at Hydro: Costs, Outcomes, and Alternative Strategies
    (pp. 391-409)

    Ontario Hydro has undergone significant downsizing of its workforce. The success to date has relied heavily on voluntary severance and early retirement programmes, accompanied by extension of conventional collective agreement mechanisms. This approach has high costs and diminishing results, and it does not deal with the high cost of job loss for individual workers. We will discuss here alternative strategies for dealing with labour adjustment through different kinds of labour-management initiatives.

    Ontario Hydro is undergoing a huge process of labour adjustment and dislocation. The total reduction in the work force has been approximately 12,000 employees over two years. Most of...