Local electricity customers soon could be purchasing power from a new distributor as public utilities commissions in Northwestern Ontario gearing up for the deregulation of Ontario Hydro
Open access to electricity distribution means businesses will be going door-to-door selling electricity. And the Northwest Energy Corp. is hoping to get the jump on that market.
Last week, the NEA —the aggregation of 11 utilities from the Manitoba border to Schreiber—became incorporated in a co-operative effort to take on the duties outlined in the White Paper.
And as looks to enter into long-term contracts, the NEA is looking to area municipalities for renewed support.
“[The NEA is] a new deregulated body that will take the place of Ontario Hydro for the distribution of power,” Fort Frances Mayor Witherspoon explained at Monday night’s council meeting here.
“We are consistent with the Ontario Business Corporation Act. We are consistent with the direction the present government wishes to pursue, and that’s commercial rationalization of the utility business,” Fort Frances PUC chairman Doug McCaig told council.
And he stressed they were much more effective as a combined body rather than going it alone.
The big advantage to joining forces, McCaig noted, would be cheaper rates because of economies of scale. Right now, the NEA has some 75,000 customers (3,700 are in Fort Frances). But Ontario Hydro is “very interested” in joining the group, which would bring their rural customers on board, putting them over the 100,000 mark.
“The ideal size for economies of scale is approximately 100,000 to 150,000 customers,” noted McCaig.
Each utilities commission still will set its own rates and run its business as usual, with its goal to maintain a customer-oriented service.
“This is probably the most important thing of all,” McCaig stressed.
Services once provided by Ontario Hydro—billing, collecting, training—could take place in Northwestern Ontario.
There also is the option to form partnerships with larger users—such as paper mills and saw mills—to buy electricity at a cheaper rate. That could lead to someone putting a hydro plant up here.
While Ontario Hydro will remain a player, McCaig said they also were talking to Manitoba Hydro, International Falls, and the private sector about other partnerships.
Fort Frances, though, could have its own role to play. It’s location makes it an access point to the U.S. and Manitoba.
“We could probably, in a very short time, develop a line that would carry enough load to facilitate the whole of Northwestern Ontario,” McCaig noted.
“[But] we’re not going to jump on it all at once,” he assured.