The Consensus Accord

September 20, 2013

A group of 38 small and medium-sized municipally-owned Electricity Distributors from around the province has released a Report entitled ‘The Consensus Accord’ that outlines necessary changes in the Electricity Sector with a focus on ‘putting the customer first’. The Report is in response to a government sanctioned report released in late 2012 by a group of ex-politicians that called for the forced merger of Local Distribution Companies (LDCs) in to 8-12 mega-utilities.

Niagara-on-the-Lake Hydro was an active participant in the Accord and is pleased with the final recommendations. President Jim Huntingdon states “We had to address the government’s Panel Report. The Panel’s research was shallow, misguided and highly subjective. Acting on the recommendations would ultimately lead to decreased service levels and increased costs to the customer. Ontarians are still paying down the Debt Retirement Charge from the last mega-utility.”

Ontario currently has about 74 Local Distribution Companies and the provincial panel painted this structure as unique and inefficient. While unique in Canada, small municipal utilities are more prevalent in the United States and clearly have lower rates than the large investor-owned companies. The Chair of Niagara-on-the-Lake Hydro’s Board of Directors, Jim Ryan, states “Small and medium-sized municipal utilities have a proven track record of operating efficiently with low rates and high customer service levels. Smaller, locally-owned companies can and do remain more accountable to the customers in their communities.”

The Consensus Report reveals that Local Distributor Companies contribute to about 20% of Ontario Electricity customers’ bills and are already subject to high levels of regulatory control. The other 80% of the bill has been rapidly rising primarily due to government policies such as Smart Meters and the Green Energy Act.

One of the key recommendations of the Consensus Accord is to enable municipal utilities to purchase the provincially-owned Hydro One assets at fair market prices to naturally develop shoulder to shoulder utilities. Proceeds from the purchase of assets should be utilized to pay down the Province’s staggering debt. Voluntary amalgamations should be granted where proven benefits to the customers and both parties are clearly evident.