Concerns surrounding the controversial Hydro One IPO have dominated the media for the past few months. Consumers are particularly wary of the future of their hydro rates amidst rising electricity prices. To ensure the sale runs as smoothly as possible, the premier’s Advisory Council on Government Assets released several recommendations in April for the Province and Hydro One to implement.
An Ottawa-based consulting firm has analyzed the progress that has been made in the three months since the recommendations from the council – led by TD Bank President and CEO Ed Clark – were released. The analysis is positive, stating that both the government and Hydro One have been quick to take up the council’s key recommendations.
The analysis notes that these changes have been made amidst continuing opposition to the Hydro One IPO. In particular, media and political opponents are fearful that the sale will result in higher delivery charges for consumers. However, the report points out that the Ontario Energy Board (OEB) regulates both privately-owned and government-owned transmission and distribution utilities the exact same way. All utilities must abide by OEB regulations that stipulate their capital structure and rate of return, methodologies for setting rates, and standards regarding measuring customer service and operational performance.
The authors also argue that fears that the IPO will impact government oversight over Hydro One are unfounded. The OEB has a responsibility to oversee all electricity distributors, whether publically or privately owned, and has broad power to review rate charges, establish policies, and investigate and impose penalties when issues of noncompliance arise.
These findings should be comforting for consumers who fear that privatization will result in sky-high prices and unregulated electricity services.