Hydro One Sale Bad For Fight Against Climate Change

Since the Ontario Liberal government announced that it would be selling Hydro One, much of the discussion has focused on whether the sale will lead to higher electricity prices.  However, there’s been little talk inside or outside of Queen’s Park about what impacts the sale of our public transmission and distribution utility will have on energy conservation and climate change.

The need to conserve energy was at the heart of the 2013 review of Ontario’s Long Term Energy Strategy.  “Conservation First: A Renewed Vision for Energy Conservation inOntario” prioritized the development of a smart grid, which would create more opportunities for connecting small-scale distributed and renewable energy generation projects to the power transmission grid.

When we think of our electrical system, we most likely visualize energy flowing one-way:  from where it’s generated to where it’s used.  In a smart grid, energy and information flow in multiple directions, creating flexibilities in grid management for both electrical generators and consumers.  Indeed, the traditional notion of “consumer” will be turned on its head in a robust, distributive smart grid, where private homes and businesses also act as mini power plants, producing their own renewable electricity through solar, wind or biomass, and selling it to the grid at a profit (for more information on Smart Grids, see: "Smart Grid: the Future of the Electric Power System. An Introduction to the Smart Grid", enbala Power Networks, September 2011).

Smart meters which monitor the time of use of electricity are probably the most familiar component of the emerging smart grid.  With real-time monitoring capabilities, home owners and businesses can better manage their electrical needs.  Grid operators can also better manage the flow of electricity to match power generation to consumer use, especially during peak hours when power is at premium.

Achieving a greater balance between energy production and energy consumption helps with conservation.  Conserving energy will go a long way to help Ontario reduce carbon emissions, especially during the high-use times when natural gas peaker plants come online for a needed energy jolt.  In 2012, electrical generation was the fourth largest source of greenhouse gas emissions in the province (see: "Ontario's Climate Change Update 2014", Ontario Ministry of Environment and Climate Change, 2014).  Turning the existing grid into a true smart grid will also create jobs and save electricity users money in the long run. 

How might the sale of Hydro One impact the creation of a conservation-focused smart energy grid?  By taking control of Hydro One out of the public’s hands, other interests will come into play when it comes time to determine the future of the grid.  Higher profits from increased electrical consumption might be a more significant motivation for private investors than a focus on conservation, which by its very definition is about consuming less energy.  With profits motivating decisions, rather than sound public policy, a lever of control will be irredeemably lost.

The government says it will use the proceeds from the sale of Hydro One to improve public transit – an effort which will likely lead to lower greenhouse gas emissions from the transportation sector.  But is building better transit really contingent on the privatization of Hydro One?  In 2013, two advisory panels recommended the government use other revenue tools, including gas taxes and user fees, to fund new transportation initiatives, including transit (see: "Investing in Our Region, Investing in Our Future", Metrolinx, May 2013, and, "Making the Move: Choices and Consequences", Transit Investment Strategy Advisory Panel, December 2013), .  The Liberals, in a minority government situation in 2013, balked. But now with a majority, there is no good reason to ignore other revenue streams and rush into the sale of our public utility, potentially jeopardizing needed conservation efforts.

The public interest in conserving energy to reduce costs and fight climate change appears to be better served with our transmission utility remaining in public hands.  With future electricity rate increases all but inevitable, the public needs to know if we’ll be paying more to fund corporate profits, rather than investing in conservation efforts which reduce electricity consumption and carbon emissions.

(opinions expressed in this blog are my own and should not be interpreted as being consistent with the views and/or policies of the Green Parties of Ontario and Canada)

Originally published as "Hydro One sale bad for fight vs. climate change", the Sudbury Star, Saturday, May 30, 2015 (print and online), without hyperlinks.