"Sheriff Ford is right—it’s high-time the electricity sector started treating consumers like valued customers rather than captive ratepayers.”
The CEO is reacting to Premier Doug Ford’s move to force the resignation of Hydro One’s CEO and board, and to his government’s cancellation of a large number of renewable energy contracts.
Better to head for the hills than become a target, he reckons.
The fact that the government was too quick on the draw and that there are industry casualties but no customer savings is now, sadly, beside the point. The Premier was bent and determined to make a statement—there’s a new Sherriff in town; he’s here to protect the ratepayer; and, electricity prices are going down.
Sherriff Ford is right—it’s high-time the electricity sector started treating consumers like valued customers rather than captive ratepayers.
The thing is, modernizing the electricity sector ain’t going to be easy. Successive governments failed because there are a lot of cantankerous characters in the electricity sector and they don’t like change.
Ontario’s Local Distribution Companies (aka LDCs) are highly regulated monopolies that make their fortunes by generating and delivering electrons. Some LDCs want to help the customer save money, but the Regulator lays-down the law when it comes to making returns. LDCs simply aren’t incented to help customers reduce their bills.
The Regulator (aka the OEB), well, it regulates everything that goes down in the electricity sector… just like the telecommunications regulator did in the good-old-days before wireless disrupted the market. The Regulator is wary of new-fangled technologies like solar electricity and battery storage—useful technologies for customers looking to save money on their bills.
The System Operator (aka the IESO)—the electricity system’s air traffic controller—doesn’t take kindly to anyone interfering with the way it operates the wires. Period.
And then there’s the Private Sector. The Private Sector is complicit in not helping customers save money because it settles for government subsidies even though solar energy is increasingly the cheapest form of electricity around the world.
The reason solar is not the cheapest option in Ontario is because there’s too much red-tape and no private sector financing options available to customers. In other jurisdictions, homeowners fill out a one-page form and solar is installed the following week. It’s no different than installing a water heater or furnace.
As for financing—permit the Private Sector to bring forward options to Ontarians. In the US, homeowners and businesses can lease the equipment or even “rent-out” their rooftop to companies who will guarantee a 15% reduction on their monthly electricity bills in return for permission to build a mini-generating station on their roofs.
Lastly, there’s the Ratepayer (aka The Customer). The Customers are frustrated because they pay bills that make no sense and because they aren’t given options to manage their own affairs.
The Customers are being held for ransom by LDCs that do the bidding of the Regulators in a sector where the System Operators control everything beyond the picket fence.
Premier Ford’s commitment to restructure the electricity system represents an unprecedented opportunity to modernize the electricity sector. If he’s going to succeed in lowering costs while protecting the customer however, all stakeholders need to step-up:
- Consumers want choice – the LDCs and the Private Sector need to be empowered to offer it to them;
- The Regulator needs to see de-regulation as a good thing, paving the way for next-generation technologies like solar electricity and battery storage; and
- The System Operator needs to create an “energy operating system” for consumers rather than a system operated by command-and-control.
There’s a new Sherriff in town aiming to protect the Customer. He’s signalled that nothing will stand in the way of bringing down costs.
This is no time to head for the hills. Rather, the Private Sector needs to stand with the Sherriff and bring out the big guns… private capital, next generation technologies, and customer-centric services.
Giddy up !