Town going into hydro business

Fort Frances will be in the electricity business before the year is out after town council accepted three recommendations from the Bill 35 committee.
The provincial bill requires all electric utilities in the province to incorporate by Nov. 7, which means they no longer will be subsidized provincial entities but for-profit corporations known as “local distribution companies.”
“The first recommendation we had was to retain local control and ownership of the utility and not proceed with the sale of its assets,” said Bill 35 committee member Mark McCaig, who presented the recommendations to council Monday night.
Municipalities have the option of selling or retaining their shares in the new corporations and, as recommended by members of the Bill 35 committee, council agreed to retain control and ownership of the utility by keeping the town’s shares.
McCaig, the Business and Technical Administrator of the local Public Utilities Commission, said the company will be in good shape and a profitable venture for the town.
“We’ve been able to maintain a capital program which will refurbish the whole network once it becomes fully depreciated,” he noted. “We have a very reliable system, we have a very clean, very esthetically appealing system.
“That’s one thing we can retain control of. We’ve always ensured that we can have the best system reliability for our customers in Fort Frances,” McCaig stressed.
The utility is estimated to be worth $3.7 million.
Fort Frances residents already pay the lowest provincial electrical rates. For an average bill of 1000 kW, people here pay roughly $61 compared to a provincial average of $83.
The committee suggested retaining local control would make it easier to maintain those low costs.
The second recommendation accepted by council was that the incorporation of the utility go ahead in order to meet the Nov. 7 deadline.
The third was that the current elected members of the Bill 35 committee be approved as the inaugural board of directors of the new incorporated entity–for a period of one year–in order to ensure a smooth transition.
All members of the committee have been poring over information and attending seminars in order to understand the changes.
The company’s board of directors will be Coun. Roy Avis, Coun. Deane Cunningham, Mayor Glenn Witherspoon, PUC chairman Doug McCaig, and PUC commissioner Larry Cousineau.
Bill 35 opens a competitive market allowing other private electrical companies to compete for consumers. An electricity tax, or “customer transition charge,” will be applied to all consumers to pay for a stranded debt.
“There’s going to be new taxes added to the electrical bills to pay off the big debt of Ontario Hydro,” explained McCaig.
The details of those charges have not been released but the stranded debt is estimated to be up to $23 billion.