Give back power to the people

100 years ago Ontarians voted for hydro power over coal. McGuinty must hear citizen voices again

David Suzuki and Paul McKay
Mar. 13, 2006

Facing an imminent power crisis, Ontario Premier Dalton McGuinty appears poised to hit the political panic button and launch $70 billion in new power plant spending — half of it on nuclear reactors. It will be the largest infrastructure investment in provincial history.

But he needs to keep a cool head and first take close counsel from those who best know how to save billions and avert catastrophe: the public. The proof of that is in Ontario's past.

Exactly a century ago, Ontario faced a similar crisis.

It was utterly dependent on imported Pennsylvania coal for urban electric power, industry, street lighting, home heating, trains and tramways. That coal also cloaked cities like Toronto and Hamilton in soot every winter and smeared the summers with smog.

When U.S. miners went on strike, the coal barges stopped coming. Punishing prices followed. Everyone suffered — except a handful of millionaire moguls who then owned private monopolies on coal supply, power production, electric utility distribution, even public transit routes.

Pleas for price relief and replacement coal supplies went unheeded. The moguls, aptly vilified as "The Electric Ring," gouged on.

One, Henry Pellatt, literally built a castle with his profits a few blocks from Toronto's worst slums. Called Casa Loma, it featured 5,000 electric lights and an indoor swimming pool, bowling alley, rifle range, and roller skating rink.

The power crisis crippled Ontario's manufacturing sector, sparked a public uproar, and galvanized a Conservative premier, James Whitney, into provisionally creating North America's first government electric utility. Then, backed by municipal politicians, he initiated an unprecedented series of public referendums in dozens of cities and towns.

The sole ballot issue was whether to maintain the moguls' coal monopoly, or adopt the plan of Whitney's charismatic ally, Adam Beck. He wanted to build the world's biggest hydro power plant at Niagara, and string wires to bring its "white coal" to all of southern Ontario. With public money.

Town by town, city by city, Ontario citizens vigourously debated and then voted on how their money would be spent. They made a brilliant choice.

Niagara soon provided a clean, cheap, reliable foundation for a modern Ontario economy. It is still running, perfectly, nearly a century later. It provides the province's lowest cost power, with zero pollution.

As Ontario grew, Beck's Niagara success was replicated with some 70 other hydro plants across the province. For the first half of the last century Ontario ran solely on clean, low-cost green power.

The giant utility which built and ran them was universally admired. And premiers garnered the political benefits. It was all applause, no headaches.

That changed in the 1970s, when Ontario Hydro began building a vast fleet of coal and nuclear plants at breakneck speed.

Each was bigger and more expensive than the last. New ones were designed and committed before earlier models were operated or even tested.

Virtually no thought was given to air pollution, or nuclear waste and reactor dismantling problems.

Morphing into the kind of arrogant monopoly the public had sacked a century ago, Hydro effectively told the public to shut up and leave the job to professionals.

The phrase "energy efficiency" was not in Hydro's lexicon. Instead, it goosed power demand by rewarding the biggest users with the cheapest rates and by hiding the capital cost and debt of each new power plant from the rate base until it began operating.

The result was that power appeared to be vastly cheaper than it was and a generation of factories, pulp plants, refineries, smelters, office towers, homes and commercial and public buildings were built to consume, consume, consume.

That meant Hydro had to build, build, build. So it hired some 10,000 engineers and technocrats to design, construct and run them.

By the late 1970s, Hydro was a 500-kilovolt colossus. Yet it planned to expand fivefold, warning that peak demand would reach 90,000 megawatts by 2006. To meet that, the equivalent of 180 new Pickering-sized reactors (or comparable coal units) would be required to avoid blackouts. A new one would have to be commissioned every month. No delays could be tolerated.

Those dire predictions were demolished, however, by reality and extensive public hearings under the aegis of the Porter royal commission.

Hydro's 2006 demand projection proved to be wrong by 60,000 megawatts, or the equivalent of 120 Pickering-sized reactors costing at least $1 billion each.

Sullenly, grudgingly, Hydro cut its expansion plan by half. Some $60 billion in planned public spending suddenly evaporated. So, miraculously, did the prospect of blackouts.

Despite this second lesson in the value of public debate, Hydro pressed on with building the Western world's largest nuclear plant at Darlington.

Citing imminent blackouts, it was exempted from public hearings under Ontario's new Environmental Assessment Act. Originally slated to cost $3.4 billion, it eventually cost almost $15 billion.

When Darlington's cost eventually hit the rate base in the early 1990s, another political backlash followed.

Undaunted, Hydro floated a $60 billion capital expansion plan that was shot down in a series of extensive public hearings held under the Environmental Assessment Act — largely because of Hydro's wonky numbers and an energy conservation strategy that was all posters, no program.

Once again, public hearings saved billions.

But that was soon erased by NDP premier Bob Rae, who imposed a three-year power price freeze, followed by a Conservative premier who vowed (before even inspecting Hydro's balance sheet) to maintain it for his entire term of office.

Mike Harris kept his word. The utility debt soared to almost $40 billion. Worse, a decade of artificially low power rates relentlessly goosed demand once again — and guaranteed the crisis now facing Dalton McGuinty.

What's the pattern here? Utility technocrats and politicians all too often spend other people's money recklessly. The public often spends it far more wisely, precisely because they have to earn it first.

A century ago, Ontarians actively chose a slate of power plants that have since excelled in performance, cost, and cleanliness.

Equally important, a pragmatic, progressive premier, Whitney, was wise enough to encourage full public debate, then show his deep respect for democracy by building what citizens chose: green power plants.

Similar stakes now face the Ontario public, and McGuinty. The $70 billion question is: Will the Premier let the public call the tune, or allow technocrats and nuclear soothsayers to trump informed choice?