Electrical Business

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Ontario LDCs anxious for Hydro One distribution assets



March 19, 2015 – The Electricity Distributors Association (EDA) in Ontario has called for the transfer “at fair value” of provincially owned electricity distribution assets from Hydro One to local electrical utilities.

“Our association has called for the separation of transmission and distribution for a long time,” says EDA CEO Charlie Macaluso. “We have also concluded that provincial participation in distribution, in its current form, is a major barrier to efficiency improvement for the benefit of consumers.”

Should this come to pass, EDA says this would be the most significant restructuring within Ontario’s electricity system since the breakup of Ontario Hydro in 1998.

“Municipal distribution companies are built into the fabric of Ontario’s communities and provide essential infrastructure,” said EDA chair Ray Tracey. “Allowing LDCs [local distribution companies] the opportunity to unify local distribution services and remove Hydro One distribution service in a given community or region is clearly what our customers have been requesting for some time.”

EDA says its proposal would address the “fragmentation and many anomalies” in the current structure of Ontario’s distribution system. Its proposal includes expanding existing local distribution service territories to municipal boundaries and further consolidation among local utilities. Adjacent Hydro One territories, including rural areas, would be allocated to local electrical utilities. Hydro One would continue to operate the provincial transmission system, focusing on the side of its business “where its operational performance has been stronger”.

The efficiencies associated with service territory rationalization, says EDA, would include improved system planning, better utilization of existing infrastructure and equipment, enhanced ability to attract capital, and improved potential for innovation and implementation of new technologies.