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Ontario Hydro Debt

and Nuclear Cost Over-runs

From “Nuclear Reaction or Nuclear Resurrection”  by Elaine Dewar

Canadian Geographic Magazine Tenth  Annual  Environmental  Issue May/June 2005  Volume 125 Number 3

Click Her To View The Full Article

IF YOU LIVE IN ONTARIO, YOU might want to look closely at your electricity bill......

.....to see how deep you're digging into your pocket to help the former Ontario

Hydro out of a $38 billion nuclear-investment hole.  It's on the back and dubbed

"Debt Retirement Charge" (DRC).  For every kilowatt-hour of electricity you use,

you're paying 0.7 cents plus GST.  For a bimonthly average of 1,800 kilowatts of electricity per household, that's  $13.50..........$81 a year.

In 1999, when the provincial government separated Ontario Hydro's assets from

its $38 billion IOU, it was left with $19.4 billion of so-called stranded debt, which

was lifted from the successor companies and plunked into the lap of electricity

users.  Debt-relief fees were buried in Ontario residents' energy bills until 2002,

when the DRC came out into the open. Meanwhile, an artificial price cap on

electricity drove the stranded debt up to $20.6 billion in the past fiscal year, and the provincial government now estimates the charge could hang over Ontarians'

heads until 2020 (Ed. Note: about the time the debts from the currently proposed nuclear construction kicks in....).

Tom Adams, executive director of Energy Probe, says Ontario's renewed pursuit of nuclear power could mean the DRC will be around much longer than that.

"The longer we stay in nukes, the more we transfer the burden of liabilities --

financial and environmental -- to our kids."

Wiping the slate clean for Ontario Hydro's successor companies also skews the

competitive advantage away from other energy sources.  "It's completely

inequitable," says Theresa McClenaghan, counsel for the Canadian

Environmental Law Association.  "All the costs of the energy source should be

incorporated into the price it charges so there isn't an unfair advantage for one of

the worst sources versus renewable."

As for how the nuclear debt ended up as your problem,  Adams says that it was,

in effect, Ontario taxpayers who provided the loan guarantees, so it's no different

from a parent who signs a car loan for a feckless teenager. "We co-signed the loans for irresponsible adolescent behaviour by a bunch of electricity executives, and now Ontario ratepayers are going to have to pay up."

Jodi Di Menna