Ontario Hydro monopoly to end

The 90-year monopoly on Ontario`s electricity sector held by Ontario Hydro will end in 2000 under legislation passed by the province`s government. Bill 35, passed in late October, will see the break-up of Ontario Hydro and the reduction of its market power as the industry opens up.

Ontario Hydro will be split into three separate agencies to handle generation, transmission and selling of power. Competition will be introduced in the generation and retail markets allowing consumers to pick their suppliers for the first time.

The utility`s successor generating company (informally called Genco (will have to reduce its wholesale market share to 35 per cent of generation within ten years. Ontario Hydro currently generates almost 90 per cent of electricity in the province. A price cap on Genco`s wholesale revenues is also likely.

Genco will also be forced to divest at least 4000 MW of non-baseload fossil-fired generating capacity within four years of competition start-up slated for mid-2000. Ontario`s finance ministry has valued the utility`s generating assets at C$5bn with debt of around C$2bn.

Environmentalists and consumer groups have expressed concern at the new competitive era, but Ontario`s government believes that it will be an economic stimulant.