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Ontario Ponders Electricity Reform: Still Optomistic Despite Setbacks, Bad Press

Fortnightly Magazine - July 1 1998

which is almost all of eastern Ontario. Forty percent of the grid was on the ground, destroyed, so we like to think that our response was very good, in comparison to our neighbors in Quebec. They had a tougher time of it, but also, frankly, the response, I don't think, was as good as it could have been. Everybody's doing their postmortems right now, trying to figure out how we can improve things in the future.

It very much brought home the lesson that 100-mile chains of transmission wire conduit isn't the preferred option in the future. I think with the new opportunities in the competitive market there's an immediate opportunity in eastern Ontario to establish cogeneration or renewable forms of electricity or generation closer to the customers. One of the questions asked in this area was would this blackout Toronto? And we said, probably not. An ice storm in this area wouldn't have the same effect because the generation is very close to the customers; most of the cables are underground coming into the major cities.

We were out in Alberta recently when they had [a meeting] of the Independent Power Producers Society of Alberta. Certainly the talk out there was looking to invest in Ontario with respects to cogeneration closer to the source. [One] company was showing a new 75-kilowatt cogen turbine. And they're looking into flare gas right now. It's the type of technology that I think we'll see more and more. We have a lot of pulp and paper companies in Ontario who would also like to get into the business, and cogeneration and gas is the preferred option for many of them.

Is the overall goal of Ontario's restructuring effort to fix the current industry, to shore up the nuclear plants, or do you want to go in a new direction?

They're kind of separate issues at the moment, because of the way things have played out. The overall plan is to move to a competitive market while fixing the problems of the past. The economics of bringing back our nuclear units very much depends on the market after the year 2000. We have no way of predicting any better than anyone else the price of electricity after the year 2000, although we think that because we've run a monopoly for 91 years that there are tremendous savings to be found. Seventy percent of the cost of electricity is the generation side, and we think there are opportunities for savings there.

These [units] are supposed to last for 40 years, and they're not lasting as long as they should. The federal regulator, all of Ontario Hydro and its internal safety regulators, they're not happy with the performance levels - they've been running at 50 percent [efficiency], and I'm told these should run at 80-plus or 90-percent efficiency. At Bruce A, where there are four reactors, [Unit] 1 has been out of service for a long time; Units 3 and 4 have been up and down so much in the last couple of years we decided to lay