In his column, Bruce Wark asks if it would be possible to set up a provincially owned power corporation that would issue bonds in exchange for the shares now held by private investors (“People power,” Editorial, April 1). While this may be possible, I would ask why would we want to?
We’ve been there and done that, Bruce, and that is why we are where we are. When Nova Scotia had its crown company NS Power operating the electrical utility in our province, we accumulated a debt of $2.245 million. When the privitization took place this debt was transferred from Nova Scotia taxpayers to those persons who purchased the shares of the new Nova Scotia Power.
I believe that I, together with the thousands of Nova Scotians who purchased the shares initially or subsequently, are pleased to enjoy, especially at this time of year, the eight percent federal dividend tax credit we currently receive. And the good news is that the opportunity remains available for anyone who wishes to partake.
The New Brunswick government, in its signing of the MOU with Hydro-Quebec, was attempting to do what Nova Scotia had done in 1992 and to eliminate the $4.8-million deficit accumulated by their crown NB Power company. Perhaps they may have been more successful if they had followed what Nova Scotia had done. Governments do not have good track records operating electric utilities.
In recent years the failure of Ontario Hydro left Ontario with a $22-million debt and an electric system with many problems. The Bruce nuclear plant with an output of 6200Mw was in shutdown for reasons of neglect or incompetence. The government, understanding the critical importance of the ouput of this station to the energy needs of Ontario, transferred the ownership and the responsibility for its refurbishment and restart to a private consortium. The result has become a success for everyone. The now investor-owned Bruce Power Station is a prime example of what good business operators can accomplish. Perhaps there is a lesson here with respect to the problems at NB Power’s Point LePreau rehabilitation.
Yes, there is a role for governments in “people services,” but the operation of electric utilities is not one of them! —Bill, Halifax
This article appears in Apr 8-14, 2010.
Bill: I would argue that democratically elected governments should be responsible for essential public services such as electric power. Selling the power grid to private owners with a near monopoly may have been good for shareholders who reaped profits and tax breaks, but as I pointed out in the editorial, not so good for Nova Scotia consumers who had to live with the blackouts that resulted from cost-cutting measures.
The experience in other provinces is noteworthy. Here is an excerpt from a CUPE report, entitled “Deregulation, privatization and the Ontario power failure” describing what happened in Alberta when the Klein government decided to deregulate the power system:
“In the year 2000, the government of Alberta deregulated electricity and from June to October, the price of electricity rose from 5 cents to 25 cents per KwH. The government subsequently instituted a rebate program for businesses and householders, costing taxpayers $2.3 billion. Dr. Marjorie Griffin Cohen summed up the situation in Alberta as follows:
“‘Before deregulation Alberta had one of the cheapest and most reliable electricity systems in North America. After deregulation it experienced regular brown-outs and was the third most expensive jurisdiction in North America after California and Hawaii.’
“The Klein government put in a rate freeze just before a provincial election, claiming it would be there for many years, and then cancelled it about a month after he won re-election.”
http://cupe.ca/PrivatizationUtilities/ART3…
Or how about this headline — one of many — from the Calgary Herald of March 28, 2001:
“Albertans stuck with $3B tab
Consumers unlikely to recoup losses in deregulation of power, report concludes”
http://www.ontariotenants.ca/electricity/a…
Anyone interested in the troubles that befell Ontario can read about them in the CUPE report. Here is one small sample:
“In May 2001, the Conservatives opened up Ontario’s power market to competition. In less than six months, the market was in chaos, prices were skyrocketing and threatened power shortages were looming on the horizon.”
http://cupe.ca/PrivatizationUtilities/ART3…
I realize that what happened in Alberta and Ontario is not identical with what happened here. At least, we maintained some regulatory oversight, although I should add that our regulations guarantee that NS Power will prosper. I repeat, electricity is too vital, both for running our society and as a tool for economic development, to be sold off or deregulated so that investors can make tidy profits.
I question why the present running of NS Power is taking Millions of dollars out of N.S. every year.
Yet OP you seem to think, the Govenrment couldn’t run this business to break even.
THat’s so unbelievable it isn’t really worth a debate.
We Nova Scotians were done a huge disservice by the Government at that time who to get out of a couple of million dollars in debt sold out a billion + dollar infastructure to private interests that rape us year after year. I think we should buy it back for the pittance we were paid for it & run it ourselves…use the hundred & sixty odd million in profit every year for the good of the province, not the good of outsiders who put there ever increasing profit line by holding us for ransome because they have a monopoly ! A monopoly so broad that if I produce electricity on my own property, I cannot sell it to my neighbor, but am required by law to sell it at a reduced cost to NS Power !
That is 100% bullshit, the Government doesn’t want to change this…but maybe its time we the public force our lawmakers to make monopoly of any kind illegal.