Mississauga and Toronto consumers are paying about 5.5 cents per kWh, and the Ontario government has a lock on rates. Will this lock stay put once the utilities go private, as many have done in the U.S., and in Britain and Canada? And why would investors buy in without a carrot? Translation: Any contract negotiated with deregulated private consortia guarantees them a profit because private enterprise “earns it". The profit guarantee – or oversight – creeps into P3 agreements more rapidly when a government has already, psychologically, decided to sell while not yet having weighed the ultimate cost to society.
The viability of having non-profit, gainfully employing government agencies operating our essential infrastructure services is time-honoured, a Canadian legacy, and is the single most compelling reason for keeping our infrastructure away from private hands. Uh, isn't it? The carrot, to Queen's Park in 1999, was $2.1-billion in short-term, cold hard cash, proffered by a consortium led by CINTRA of Spain, and it was quite handsome in the case of the 407 ETR during the closing chapter of '90s recessionary deficits.
If precedence is ignored, Mississauga businesses and residents will be paying New York and Boston rates for electric power soon after the city receives its fast money for the infrastructure "asset". That word used to mean “amenity for humans" but it now means “anything with market value”. Mississauga will follow (or set) the trend, and private entities will get their monopoly, either through extra charges or a lifting of the rate freeze. They may not start gouging until consumers are convinced that the burden of electric infrastructure is too hefty for the public purse.
The city has asked one of the chartered banks to test out Hydro Mississauga’s (that’s Enersource) asset value. Borealis, the OTF pension-fund people, are being cited as a potential buyer of the city’s 90 per cent share.
Ontario's government sold the 407 ETR toll highway in 1999 to CINTRA of Spain and (by affiliation) Macquarie Bank of Australia. "C&M"’s minority partners are Montreal-based SNC Lavelin and Caisse de Depot (CDPQ). How little protection consumers had against paying North America's highest expressway tolls was soon discovered: the equivalent of 30 cents per mile compared to about eight cents (public) and 12 to 14 cents (deregulated) in the Unites States. C&M knew full well that 407 ETR would become an essential service and a "gold mine", any boycott of which would bring gridlock to the GTA.
In an arena of discombobulation, courts and judges have thrown out the McGuinty government's attempts to reconnoiter from 407 ETR's P3 agreements because of jacked-up tolls and user outrage – and a fireproof contract devoid of the pricing safeguards the government thought they had. The government is reduced to sniper attacks and litigation threats against 407 ETR for breach of contract. All because experts failed to read carefully what may be the finest, printed-contract example of "bankspeak".
The 407 ETR operators are "private enterprise", hence free to exaggerate expenses to their hearts' content. One estimate of these costs – I think it was $250-million per year – translates to 67 ten-man road crews supported by millions of dollars worth of construction equipment being kept busy around the clock, along the toll road's 67-mile length. It's a new kind of LAWL, or "Laughing All the Way to the Larder".
UTM has installed a $3.25-million, Acumentrics fuel-cell power plant that produces 50 kilowatts at the Hazel McCallion library. That's about 20 times as much as 50 kilowatts should cost to install ($150,000), but then again, the generator is at least as big as a household furnace and it’s a 'pilot project'.
It may be time for consumers to take into their own hands the rescue of Ontario Power from financial mismanagement. It would be possible for blocks of 25 homeowners in a neighbourhood to install a single, 50-kilowatt power plant for $150,000 that would serve their electric power needs, whether it's designed to run efficiently on bunker oil, natural gas or other fuel. It also might recover heat from the 25 homes and directly from new-wave rooftop solar cells, as well as from deeper, “geothermal” ground. Perhaps, also, the power cables could be wrapped around underground, house-exhaust piping along the property lines of each home – as long as it doesn't cost more than the value of the benefit it delivers.
In a business neighbourhood, who would balk at installing a $250,000 power plant serving ten units at $25,000 apiece, requiring some annual maintenance each year and perhaps replacement after 20 years? The power unit could have what's known as a TBO, or "time before next overhaul" as it’s known in the aircraft business, which would affect a property's resale price to a minor degree depending on time remaining. Better still, financing would be amortized so that property owners pay only about $250 monthly toward the fuel and capital cost.
Among other advantages, blackouts would be limited or virtually nonexistent. Generators classified as "sustainable" would qualify for handsome provincial subsidies if they plugged their output into the grid, but no one knows how long that would continue.
Massive mismanagement and cost overruns – in building Darlington Nuclear Station, for example – seem to be the wave of the present. Time must be right for some fresh thinking. But the technologies needed are well within reach, as seen in the amazing array of innovative products and services emanating from Mississauga's large business and research communities.
