ON THE LEVEL — Ontario Hydro needs a Bill James

Ontario Hydro, that giant Crown-owned utility, is creating quite a headache and dilemma for Falconbridge Ltd., its largest buyer of industrial electricity.

The big mining firm, suffering from what it deems excessive year-after-year increases in power costs, is considering building its own 100-MW gas-fired generating plant to supply the sprawling Kidd Creek mining and metallurgical complex at Timmins, Ont. Falconbridge claims this would be cheaper. Last year’s hike was 11.8%, boosting Kidd Creek’s power bill to $58.5 million, with another 7.9% increase coming. That’s more than 30% in three years, well

above the rate of inflation.

Installing its own plant would cost Falconbridge about $100 million, a third of what Hydro needs to supply the same amount of nuclear power. Other big power users also contemplate abandoning the Ontario government’s power-at-cost Hydro ship. Kingston is seriously considering a large gas-fired electric co-generation plant as is Toronto. Steam from these would be used to heat Queen’s University and the University of Toronto respectively. Ontario Hydro unquestionably faces serious problems and certainly can’t afford to be losing any big customers. With a glut of power on hand, it is in a financial straitjacket.

Long-term debt exceeds $32 billion and it is still borrowing more than $4 billion annually to finance the huge Darlington nuclear plant, labelled whipping boy for its current woes. Its cost soared $300 million this year to $13.8 billion and climbing, nearly double the original estimate. But the roots of Hydro’s high costs run deeper than its nuclear program. Once independent, this firm is now deeply in government clutches. And like any government-run business, costs mean little.

Being a monopoly, it has developed a bloated administration which enjoys an extravagant lifestyle — like the $1-million revamping of its executive boardroom. Even the province’s own Energy Board reports Hydro’s average wages — $67,000 — 12% higher than comparable private sector jobs. It has close to 30,000 employees, some 6,000 in a palatial head office establishment on Toronto’s posh University Avenue.

At the head is Marc Eliesen, awarded the chairmanship by his close friend Premier Bob Rae — both are members of the New Democratic Party — shortly after being inadvertently handed the reins of power by a disgruntled electorate.

Whether or not it’s the heat and pressure of his job, Eliesen is moving on to lotus land where he has accepted a similar post with B.C. Hydro, also under an NDP government. Rae has yet to announce his successor.

Wishful thinking, perhaps, but it would be like a breath of fresh air if he were to forget politics and appoint a down-to-earth proven businessman not afraid to clean house — the likes of a Bill James.

Wouldn’t that be ironical, for it was James who turned Falconbridge around and put it into the Kidd Creek picture in the first place. Financially independent but appreciative of challenges, he had the guts to walk into the Denison Mines’ mess, slashing that company’s debt down to size. What a field day he could have at Hydro. It’s doubtful if he would have been coerced under government pressure into gifting $65 million to the Northern Ontario Heritage Fund from the Hydro treasury for the Elliot Lake community.

Ontario’s power costs simply must be held in check if the mining industry is to retain its all-important export markets. For it’s a highly competitive and shrinking trading world it now faces, especially with a flood of cheap metals flowing out of Russia.

The writing is on the wall for mammoth Hydro. It must trim costs and become more efficientof cheap metals flowing out of Russia.

The writing is on the wall for mammoth ting is on the wall for mammoth is on the wall for mammoth Hydro. It must trim costs and become more effimany employees, costs too much to operate, has soaring administrative charges and overcharges its customers, says a recent report by an independent consulting firm. They pay more for electric power than any of the nine American and Canadian utilities of similar size which the report compares.