Possible consolidation of local energy sector has council concerned

North Bay City Council saw representatives from North Bay Hydro making a presentation on Monday evening regarding the corporation.

Chief Operating Officer Todd Wilcox stood at the podium before council and detailed his concerns regarding a study that was underway at the Provincial level.

The review is targeting efficiencies only in the municipality's portion of the utility's costs.

Wilcox is concerned that North Bay Hydro would be diminished in capacity in light of provincial cutbacks.

With redundancies being the target of the Ontario Premier as of late, Wilcox fears the company will be consolidated or privatized by the Provincial Government to offset the higher electricity costs now on the bills being mailed to homeowners.

During the presentation, it was pointed out that the 18 cents of every dollar spent on hydro that goes to the North Bay branch is the only part under review at the provincial level and would really like to see the other 82 cents come under the same scrutiny in order to maintain the efficiencies of cost.

“Although we think that important that we look at our side, we think if you want to have a meaningful impact, we need to look at the entire costs of electricity,” says Wilcox.

“There are more efficient ways to do it and we need to discuss those things as an industry if we want to reduce costs.”

Citing initiatives in recent past by Provincial Hydro such as Smart Metering and the adding of HST, Wilcox says the costs of electricity have only gone up and up.

“Smart meters have added a cost, some of the other commitments made in the long term contracts have increased costs so I don't think this will reduce costs, not necessarily by itself," he says.
Wilcox says he's worried that the lack of local ownership in the utility will mean reduced service, higher costs, money in the community being invested in projects outside the community and an erosion of local communities’ infrastructure.

“If you don't own it, you have no control over it, so if it's owned by someone else, the investment could go elsewhere and you could be paying, here, in your rates and improving somebody else's infrastructure in the province or out of the province,” he says.

Wilcox says this is part of the trust issue that really points to the concern that this study will see demise in the organization of North Bay Hydro and an increase in costs once again to the consumer.

“I think that the panel that's going through the process, they haven't developed their mandate nor their model for review and all initiatives by the province, in the last 24 months, in electricity sector, has resulted in higher costs, not lower costs so I am concerned about the overall approach and just because of that track record,” he says.

City Council is concerned that the economic impact of losing North Bay Hydro to consolidation would be another difficult cutback to bear.

Mayor Al McDonald spoke of the excellent work North Bay Hydro provides to the community, citing a million dollars a year donation to the hospital as well as a half million dollar dividend to the City as just a few of the local utilities branches good deeds.

McDonald, fearing the province will legislate the sale of local utilities back to the province, is concerned for the loss the community would see if this were to happen.

“They invest in our infrastructure, they work with our business's and our educational institutes, they've shown leadership, they're very efficient in what they do, our rates are lower than Sudbury's, they're 50 percent lower than Hydro One,” he says.

McDonald, with obvious concerns regarding trust, cites the review as the signal that the local utility is on the chopping block, especially in the light of what has gone on with the ONTC.

“We welcome the review but let's be upfront and say if one of the recommendations is to consolidate the local distribution companies such as North Bay Hydro, that it's voluntary, not mandatory, says McDonald.”

“We're very strong on that.”

With the Ontario Government having implemented an alternative energy program that favors small individual energy producers being paid enormously large sums of money for clean energy, many critics feel the system has been corrupted and equity gone.

Councillor Dave Mendicino highlights the point that much of the cost of electricity for businesses in the province go toward funding alternative energy sources of electricity.

“We've heard much about companies being charged a lot of money to pay for the province's energy initiatives, some up to 40 percent of their energy bill going towards (it),” says Councillor Mendicino.

Mendicino noted that every residential user also pays for this adjustment, to the tune of 600 dollars a year on average.

“This is all about money for the province,” he says.

Mendicino says that he will be bringing a motion forward to council in a few weeks to send a message to the province, loud and clear, that under no circumstances does the Municipality want North Bay Hydro sold or amalgamated and want it kept under its current structure.

“It's one of the best run Hydro companies in Ontario, in our minds, and we want to keep it the way it is,” he says.

“We certainly have no interest in selling North Bay Hydro.”