Oh, don't get me wrong. Electricity generation in this province is a disaster.
who hired this guy?
- Thread starter Dirty Frank
- Start date
Snobike Mike
Banned
Actually, If the Libs are so wonderful why haven't they solved the problem? Instead they have been literally burning taxpayer cash on the street corner all the while diverting focus to TO's Crack Mayor.
You can always go back into history and attempt to blame some other party to suit an agenda, but the fact remains that the Libs are in power and they've been so for a long time. Who cares what Hudak may or may not say, he isn't in power. The Libs are in power so they own this.........
I don't know that I agree. The massive, monolithic bureaucracy, that was Ontario Hydro, might have given us cheap electricity, but at what overall cost? Surely you recall the tales of ridiculous compensation packages and iridium handshakes, on the way out the door? Something had to be done as money was being ****** away, that should have been used to replace aging infrastructure. Do I agree with the selling off of public assets? No, but neither do I agree with paying people who have screwed us over millions and millions of dollars, just so they'll go away.
The Liberals have done nothing to fix this problem. After OH was broken up, it was unfixable - electricity generation in this province will never again be a single public utility - no government will ever take that on again. By the way, OH was created back in the day exactly because of the type of gouging that we are seeing today - the wealthy could afford electricity, while the unwashed masses could not. I guess those who forget history, are doomed to repeat it.
At what overall cost? Compare the electricity rates back in 1999 to what they are today. Ontario was amongst the cheapest in N. America back then, now we are heading toward being the most expensive. I don't quite understand this overall cost argument - just look at the rates then and now. As for paying people millions for buyout packages - that is not restricted to publicly owned entities like OH.... it happens in private industry as well, only on a much larger scale. And just for interests sake, lets throw in some compensation numbers. In the OH days, each of the divisions of the company had vice presidents who got paid around $250K/year. After the breakup into separate entities (OPG, Hydro One, Kinectrics, etc.) all of a sudden each of those VP's were hauling in $1M+. Not sure I see how that was beneficial to the electricity consumer either.
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I don't know where you got the idea that electricity was subsidized when Ont. Hydro was around. It is not true - in fact, the opposite is true. OH, in spite of selling "power at cost" usually managed to make about a billion dollars a year of "profit" which went back into the provincial government coffers. It is true that the provincial government guaranteed Ont. Hydro's debt, thus allowing them to borrow at a much lower rate, which translated into lower electricity rates for Ontario electricity consumers -maybe you regard that as a subsidy?
Snobike Mike
Banned
But a subsidy that costs no one anything a win-win for the people of Ontario. I fail to understand this as a bad thing.
Snobike Mike
Banned
I never qualified it as good or bad, simply that having a guarantor, in this case the gubment, which causes your costs to go down is indeed a subsidy.
If it truly is without any strings/costs attached then that would be a good thing. Of course having artificially low electricity rates causes great pain when the rates return to true market cost/value and causes outrage amongst "customers"......
You may call the provincial debt guarantee a "subsidy" but the truth is, it did not cost one penny to offer this guarantee, and it saved the electricity consumers a boatload of money.... so what could possibly be wrong with that?
So what if the rates were "artificially low"? The mantra of Ontario Hydro was "power at cost"... NOT "power at the highest price the market will bear." I fail to see the problem with the rates being "artificially low" as long as the cost of producing the electricity was covered... and it was. It is important to remember that these low electricity rates built this province into an economic powerhouse and now, high electricity rates are killing it.
Another point... don't you think the guaranteed grid access and guaranteed rates of $150/MW for wind and up to $750/MW for solar amounts to a subsidy to these private power producers? Except this time, it is totally at the expense of the electricity consumer.
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kwtoxman
Well-known member
Ontario Hydro was rarely making an annual profit, in the last 10-20 years of it's existence. And its accumulated debt became huge. Huge. So down in flames goes the suggestion that OH was better.
Ontario Hydro had $38.1 BILLION in debt when it was broken up. http://www.oefc.on.ca/debtmanage.html The link also shows the repayment is going incredibly slow. That means lots of interest payments that essentially come from taxpayers.
It's also nonsensical to blame tories for the problems, especially the most recent liberal fiascos on the file. Various issues extend to all governing parties through 1972 to present.
All of ON is in la la land. The deficit and debt is just crazy. And continually ignored by the sheep voting the liberals that are happily ignoring it as well. http://viableopposition.blogspot.ca/2012/03/ontarios-fiscal-history-it-is-not.html
Ontario Hydro had $38.1 BILLION in debt when it was broken up. http://www.oefc.on.ca/debtmanage.html The link also shows the repayment is going incredibly slow. That means lots of interest payments that essentially come from taxpayers.
It's also nonsensical to blame tories for the problems, especially the most recent liberal fiascos on the file. Various issues extend to all governing parties through 1972 to present.
All of ON is in la la land. The deficit and debt is just crazy. And continually ignored by the sheep voting the liberals that are happily ignoring it as well. http://viableopposition.blogspot.ca/2012/03/ontarios-fiscal-history-it-is-not.html
GP_RZ
Well-known member
I totally agree!!! they seem to really support the fiberals.
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OH was not set up, nor were the rates set so that a profit was made, but for most of the years you mentioned they still made substantial sums over and above the cost of production, which went into the provincial coffers. That quote you included (from Canadaenergy.ca) seems to include several untrue pieces of information, but they have not included their sources of information, so how can we take that as gospel truth?
There is little question that the political meddling in the electricity of this province has produced disastrous results for consumers, but it was Mike Harris who broke apart Ontario Hydro and set the stage for all the misguided measures that have happened since (including the Liberals' idiotic Green Energy plan.) Because of this, it is entirely reasonable to lay the blame for this mess squarely on the doorstep of Mike Harris and the Ontario PCs. The breakup of Ont. Hydro has caused rates to skyrocket because the rates were "artificially low" according to the standards of the free market.
No doubt, the accumulated debt was large. It was larger than it had to be by far due to the political interference in the later year of OH's existence. The politicians balked at the cost of Darlington and their politically motivated on-again/off-again delays when Darlington was being constructed caused the price of the plant to nearly double. In addition, there were political machinations at work to devalue the assets of Ontario Hydro, so those assets could be sold off to the private sector for bargain prices. I seem to recall that at one point, the provincial government ordered OH not to raise rates for a year or two, so the difference between what they needed and what they were allowed to charge became the "unfunded liability" that OH owed when it was split apart. That is what we are paying off in our debt retirement charge on our electricity bills.
http://www.madhunt.com/letter-smith-20131204.html
http://www.therecord.com/news-story...alary-cap-for-public-sector-chief-executives/
If Hydro doesn't make a profit, how do they manage to pay millions in bonuses and severance payouts?
Corruption, greed and deception.
http://www.therecord.com/news-story...alary-cap-for-public-sector-chief-executives/
If Hydro doesn't make a profit, how do they manage to pay millions in bonuses and severance payouts?
Corruption, greed and deception.
vociferous
Well-known member
bonuses are what keep certain organizations (i'm looking at you mega-charities as "non-profti"
kwtoxman
Well-known member
Try to find a single piece of third party information showing that OH was providing money (profits as you would say) to the Government of Ontario. I've searched. There is nothing, nada, zip. Not find a single thing I can find saying that with the millions of ON related pages and reports out there. This article directly refutes your statements too. It talks about the pre 1998 Power Corporation Act, where Ontario Hydro had paid no corporation taxes or dividends. http://www.thestar.com/opinion/editorialopinion/2010/07/30/why_you_pay_so_much_for_hydro.html So let's use basic logic, which shows the weight of evidence overwhelmingly supports the fact that OH did not pay dividends.
Attack my info source?? Really? You have provided no information or source to substantiate your claims. And yet your first response post is to attack an independent source I found contradicting you. And using conjecture as well. Optics = bad. I would suggest you provide the source for your info first before attacking. And my information makes common sense when combined with the basic debt knowledge of OH, found at the link from the Gov On Finance. How do you think OH got to over $38 billion in debt? By making money and being profitable? If so, then I guess we're all living wrong.
Maybe your thinking about the sneaky way of reporting income that OH did. OH liked to spout some #s that showed profit, but with the following caveat "INCOME BEFORE FINANCING CHARGES, CORPORATE WRITE-OFFS AND DEFERRED PENSION ASSET ADJUSTMENT". That's rather important stuff. Plus what about the debt!? Would have been nice to pay actually pay some of it down, like normal behaviour. But they never behaved normally.
Harris split up OH because they weren't being accountable to their debt and spending. The newer smaller units could never even handle the debt they actually owed, so they were given a portion for which they are now accountable for, which is better than it was before. Although the provincial assumption of over half that total debt has been barely dented after all this time by the libs, and in some strong economic years for the province pre 08. Just minimal progress. Hilarious to see people here blaming Harris for the liberal record. Too funny.
Here's some incontrovertible evidence on OH annual profitability, or should I say losses, lol. And it shows that OH was not profitable. This a report from OH on the last five years of existence showing net income. Check out page 64 of the report. The bottom shaded area shows actual net income (profit or losses). What one sees is that even in these last years without the huge costs mentioned that happened earlier, when you sum the net income over the five year period, it is still an operating loss of over $5 billion dollars.
http://www.oefc.on.ca/pdf/ENGFINAL.pdfHere's another paper showing how OH was losing money. http://www.hks.harvard.edu/hepg/Papers/Adams_Ontario_012998.pdf (Read the last full paragraph on page 2). Or is Harvard another disreputable source on top of the other three?
Want to get more nauseous on how the file was handled by the libs?
Look at all the new charges added when OH ceased to exist. It makes some sense the tories added a bunch early on, frankly because the province assumed over $20 billion in debt from these new organizations, and these new organizations should frankly to help pay that back (through those mechanisms). Then the libs added a bunch more charges too when they get the chance, with some obvious tax/cash grabs. http://www.thestar.com/opinion/editorialopinion/2010/07/30/why_you_pay_so_much_for_hydro.html
And what about all that debt and the extra charges the taxpayers are coughing up. Seems the debt retirement charge should have paid off the intended debt already. But it turns out that hasn't happened.
http://webcache.googleusercontent.c...sed_in_ontario.html+&cd=4&hl=en&ct=clnk&gl=ca
Debt elmination plans by the government. A joke, at the taxpayers expense.
http://www.cleanairalliance.org/files/nukedebt.pdf
Wow, look at all how much money has been spent and the amount of debt reduction. At this rate, it will be 100 years to pay it off. Thx libs and boomers. Great stuff.
http://opinion.financialpost.com/20...er-trip-still-stranded-after-all-these-years/
Some spin in this article, so beware of that, but the #'s don't lie and show just how much of an effect the libs green energy plan, and overall power capacity planning, is costing taxpayers.
http://opinion.financialpost.com/2013/05/01/turning-water-into-debt/
I'm no longer in ON. My electricity rates are lower significantly lower than ON, and that is before your 42% increase over the next 5 years. Wow.
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First off, let me compliment you on your research! It always saddens me to see the electorate being led like sheep to the slaughter because they have no interest in things that vitally affect their lives. Good on you for showing an interest and doing your research (although I hardly consider a paper written by Tom Adams of Energy Probe to be non-partisan - even if it was delivered to the Harvard Electricity Policy Group.)
Don't all companies report income this way? About the debt...OH took on debt for two reasons. 1 - to build generating stations (nothing wrong with that), and 2 - to keep rate increases down as mandated by the government of the day (not sure if it was the Libs or the NDP at the time but it amounted to political interference that ultimately contributed to the demise of Ont. Hydro at the hands of the Harris government.)
I've never been one to believe in conspiracy theories until the subject of the privatization of OH came along. It was reported to be the largest public share offering in history at the time. Bay Street was salivating over the commissions they would make on the IPO of Ontario Hydro on the TSX. One must wonder why certain things happened during that period... like a Bay St. executive (Farlinger) being hired as the Chairman of OH, like the World economic forum being held in King City around that time (to exert pressure on the government to carry through with the privatization), etc. Luckily, the Harrisites failed in their quest to totally privatize Ont. Hydro, due to huge public pressure. They opted instead for the slow death approach and the Liberals have done nothing to stop it.... in fact, they seem to have embraced it wholeheartedly! As it turns out, the demand for electricity is fairly inelastic (moreso than the Hwy 407 tolls, I venture) so anyone who got control of the new private company could virtually charge whatever they wanted for the electricity. History has shown that in jurisdictions that privatized their electricity systems (most notably California and Alberta) the generating companies did not act in the public interest... they acted in ways that generated the most profit. These actions amounted to shenanigans such as shutting down generating capacity to create artificial shortages which drove the spot price of electricity through the roof. Alcan, which had their own generating stations due to their enormous electricity consumption, was known to shut down their smelting operations and divert their electricity production to the grid because prices on the spot market were so high. This seems like a very poor use of resources overall (but whatever is good to maximize profit, right?)
It is not so irrefutable after all... I haven't read the entire report, but on pg 15, you will note that the Nuclear Performance Advisory Group delivered their report to the OH Board of Directors in 1997, which subsequently led to a devaluation of OH assets by $6.58B (pg 31). If one removes this huge write-off from the equation, it can be seen that over that 5 year period, OH contributed profits of over $1.31B to the provincial coffers (even after the huge write off of $2.56B that occurred in 1996.) This devaluation also led to a larger amount of "stranded debt" on the books. What an elaborate shell game! Why were the assets devalued to such a huge extent? I dunno... maybe to make them more affordable for private interests to purchase them? There are many unanswered questions.
Bottom line... The citizens of Ontario once owned a very valuable asset in Ontario Hydro that was destroyed by politicians who, it seems, were more interested in serving the interests of their big money buddies than the citizens of Ontario. Anyone who agrees that the privatization of OH was a good thing, would undoubtedly agree that privatizing other essential services such as our water supply, or perhaps health care would be a good thing. Sometimes, publicly owned monopolies serve the public interest better than the competitive marketplace - especially when it comes to services that we deem to be essential.
Don't all companies report income this way? About the debt...OH took on debt for two reasons. 1 - to build generating stations (nothing wrong with that), and 2 - to keep rate increases down as mandated by the government of the day (not sure if it was the Libs or the NDP at the time but it amounted to political interference that ultimately contributed to the demise of Ont. Hydro at the hands of the Harris government.)
I've never been one to believe in conspiracy theories until the subject of the privatization of OH came along. It was reported to be the largest public share offering in history at the time. Bay Street was salivating over the commissions they would make on the IPO of Ontario Hydro on the TSX. One must wonder why certain things happened during that period... like a Bay St. executive (Farlinger) being hired as the Chairman of OH, like the World economic forum being held in King City around that time (to exert pressure on the government to carry through with the privatization), etc. Luckily, the Harrisites failed in their quest to totally privatize Ont. Hydro, due to huge public pressure. They opted instead for the slow death approach and the Liberals have done nothing to stop it.... in fact, they seem to have embraced it wholeheartedly! As it turns out, the demand for electricity is fairly inelastic (moreso than the Hwy 407 tolls, I venture) so anyone who got control of the new private company could virtually charge whatever they wanted for the electricity. History has shown that in jurisdictions that privatized their electricity systems (most notably California and Alberta) the generating companies did not act in the public interest... they acted in ways that generated the most profit. These actions amounted to shenanigans such as shutting down generating capacity to create artificial shortages which drove the spot price of electricity through the roof. Alcan, which had their own generating stations due to their enormous electricity consumption, was known to shut down their smelting operations and divert their electricity production to the grid because prices on the spot market were so high. This seems like a very poor use of resources overall (but whatever is good to maximize profit, right?)
Here's irrefutable evidence showing that OH was not profitable. This a report from OH on the last five years of existence showing net income. Check out page 64 of the report. The bottom shaded area shows actual net income (profit or losses). What one sees is that even in these last years without the huge costs mentioned that happened earlier, when you sum the net income over the five year period, it is still an operating loss of over $5 billion dollars.
It is not so irrefutable after all... I haven't read the entire report, but on pg 15, you will note that the Nuclear Performance Advisory Group delivered their report to the OH Board of Directors in 1997, which subsequently led to a devaluation of OH assets by $6.58B (pg 31). If one removes this huge write-off from the equation, it can be seen that over that 5 year period, OH contributed profits of over $1.31B to the provincial coffers (even after the huge write off of $2.56B that occurred in 1996.) This devaluation also led to a larger amount of "stranded debt" on the books. What an elaborate shell game! Why were the assets devalued to such a huge extent? I dunno... maybe to make them more affordable for private interests to purchase them? There are many unanswered questions.
Bottom line... The citizens of Ontario once owned a very valuable asset in Ontario Hydro that was destroyed by politicians who, it seems, were more interested in serving the interests of their big money buddies than the citizens of Ontario. Anyone who agrees that the privatization of OH was a good thing, would undoubtedly agree that privatizing other essential services such as our water supply, or perhaps health care would be a good thing. Sometimes, publicly owned monopolies serve the public interest better than the competitive marketplace - especially when it comes to services that we deem to be essential.
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Thank you for this new addition to your post! When I posted my original comment, I said that we should search for the root cause of the high electricity rates we are paying in Ontario. I made the assertion that the root cause of the high rates were the breaking up of Ontario Hydro and the introduction of a competitive marketplace for electricity. Who did this? The Ontario PC government and their "Common Sense Revolution". Rather than refuting my stance, the article you posted here backs it up. Thank you for finding this article to support my case.
Ontario Hydro was a Crown Corporation with the Ontario government as the sole shareholder. Where do you think the "profits" went? As with any company, the profits went to the shareholder. The OH final financial report you linked to in your post shows that profits were substantial (except for those years where they were busily writing down the value of the assets so they could be sold off at fire sale prices.)
In order to introduce a level playing field for competition to exist, all these extra taxes were instituted - it is no different than what any other business has to pay. This was also the reason why the Ont. Government assumed some of OH's debt - so the successor companies would not be made uncompetitive. There was another way to go about it, though.... the playing field could have been based on the field that OH was playing on pre-privatization - a field that existed for the good of the public and not for the good of profits. Sadly, the Tories chose the money-grab rather than going down the path that would have benefitted Ontario electricity consumers.
Ontario Hydro was a Crown Corporation with the Ontario government as the sole shareholder. Where do you think the "profits" went? As with any company, the profits went to the shareholder. The OH final financial report you linked to in your post shows that profits were substantial (except for those years where they were busily writing down the value of the assets so they could be sold off at fire sale prices.)
In order to introduce a level playing field for competition to exist, all these extra taxes were instituted - it is no different than what any other business has to pay. This was also the reason why the Ont. Government assumed some of OH's debt - so the successor companies would not be made uncompetitive. There was another way to go about it, though.... the playing field could have been based on the field that OH was playing on pre-privatization - a field that existed for the good of the public and not for the good of profits. Sadly, the Tories chose the money-grab rather than going down the path that would have benefitted Ontario electricity consumers.
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So where did all of that debt come from and who considers the value of a corporation, without looking at both assets and liabilities? If I own a $500K house my net worth isn't $500K+ dollars, if I have $450K of mortgage debt. Because the cost hasn't yet been paid in no way means that the cost doesn't exist. Those costs go waaaaaaaaay back.
