OMA alarmed by revised Hydro plan

As environmental hearings on Ontario Hydro’s 25-year, demand-supply plan enter their second year, the Ontario Mining Association (OMA) is growing increasingly concerned about the direction the plan is taking.

Recently, the utility lowered its projected growth in demand for electricity from 2.3% to 1% per year. To meet that goal, Ontario consumers would have to save 9,860 megawatts, roughly equal to the annual consumption of electricity in British Columbia, each year to the year 2014. “They’re picking a target that no one has ever achieved before,” says Peter McBride, manager of communications for the OMA. He points out that, before the recession hit, annual electricity consumption was growing by 3.5-4% per year.

“Mining companies are concerned because they effectively have no alternative to electricity,” says a recent submission to Ontario Hydro by the OMA. The organization argues that by planning for the median rather than upper limit of growth, power shortages will become commonplace.

The OMA also says that by “closing doors on energy options” such as nuclear power and relying too heavily on natural gas as an emergency backup, Ontario Hydro is destroying the flexibility to meet its mandate.

For instance, Ontario Hydro recently announced that it had terminated or deferred approvals for 53 private co-generation and hydraulic generation stations in the province.

The OMA’s third concern is price. In recent years, producers have been hit hard by rate increases double or triple the rate of inflation. The future does not look much brighter.

In 1991, Falconbridge received an $88-million electricity bill. Projected rate increases are expected to boost this bill to $98.4 million in 1992 and $110 million in 1993. Likewise, Inco’s (TSE) electricity bill is expected to total more than $73 million this year, up from $61 million in 1991.