The people of Ontario own a generation company, Ontario Power Generation (OPG), and a transmission and distribution company, Hydro One. Historically, these two publicly-owned entities have generated a profit for the provincial government and have advanced government policy objectives.
- OPG’s low-cost electricity production has been used to mitigate rising electricity prices. The last increase in OPG’s base rates was in 2008. For the first nine months of 2013, OPG received an average price of 5.7 cents per kilowatt-hour, 45 percent lower than what other generators receive. If every Ontario generator were paid the same price as OPG for its electricity in the first half of 2013, the generation portion of a ratepayer’s bill would have been about 30 percent lower.
- Hydro One’s transmission lines are the backbone of the province’s electricity grid system and its distribution lines serve urban centers as well as the province’s low-population density and remote areas.
- Some provincial policies have favoured greater private sector participation in the renewal of Ontario’s generating and transmission systems. Some of these policies have negatively impacted the financial viability of the provincially owned companies as well as Ontario’s electricity rates.
- Ontario’s energy policies should ensure the continued financial viability of these two companies including investments that recycle and expand their valuable infrastructure assets and partnerships.
- There are some 90 non-utility generators in Ontario (hydroelectric, biomass and natural gas). These existing assets will continue to make a valuable contribution to meeting the province’s future electricity needs.