The Federation of Northern Ontario Municipalities (FONOM) said electricity could get much more expensive for many Northerners.
“A new northeastern Ontario regional electricity distribution utility as proposed by a provincial panel that consolidates municipal utilities with Hydro One could mean significantly higher costs and decreased levels of service,” said FONOM president and Kapuskasing Mayor Al Spacek in a statement.
The panel recommended the creation of eight to twelve centralized regional electric distribution utilities across Ontario, with one serving the northeast.
“The municipal utilities serving the northeast are profitable and have low rates. Hydro One has much higher rates, much higher debt levels and higher costs,” said Spacek. “This would drive up average rates for all customers. Under the panel’s proposal, all municipally-owned utilities would be forced to give their assets to the new regional entity.”
Hydro One, which serves the rural and remote parts of northeastern Ontario, would also give up its assets to the new regional utility.
“Across the entire north municipal utilities serve 434,000 customers out of a population of 531,000,” said North Bay Hydro Chief Operating Officer Todd Wilcox. “With this model 434,000 people could see their rates increase. This could translate into over $300 per year in higher costs for a residential customer in a northeastern Ontario urban area.
Spacek said the nearly $3 billion of Hydro One debt would be transferred from the province to the new regional distribution utilities and to customers in the northeast. “This shell game does not benefit us here in the North.”