Hydro-Electric Power Commission of Ontario

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The Hydro-Electric Power Commission of Ontario was established in 1906 by the provincial Power Commission Act to build transmission lines to supply municipal utilities with electricity generated by private companies already operating at Niagara Falls. The first chairman was Adam Beck, minister without portfolio in the provincial government of Sir James P. Whitney. Beck had been a prominent advocate of a publicly owned electricity grid. In 1907, Toronto City Council approves the development and public control of hydro-electric power, thanks to the leadership and commitment of Adam Beck's ally, William Peyton Hubbard.

The son of a freed slave from Virginia, Hubbard was first elected to Toronto City Council in 1894. Together Beck and Hubbard made a formidable team, Beck fighting for public ownership province-wide, and Hubbard taking the lead at the municipal level.

The first transmission lines began providing power to southwestern Ontario in 1910. Beck was knighted in 1914 for his work in electrifying Ontario.

In the 1920s the commission began generating and distributing its own power when it was given the mandate to electrify rural areas. Besides building its own generating stations, it bought the transmission lines and generators of the largest private electricity company. In 1948, HEPCO changed its system from 25 Hz to 60 Hz.

By the 1950s the commission was operating as a single integrated system. By 1970 all but the most remote municipal power systems in Ontario were organized into a single grid. In 1953, a 230 kV interconnection with Detroit Edison in the United States known as the Keith-Waterman line was constructed and placed into service. In 1955, 230 kV interconnections with New York State were placed into service.

In the 1960's, HEPCO was the first utility in North America to utilize ultra-high voltage transmission lines. In 1967, HEPCO put into service transmission lines carrying 500,000 volts that carry power from hydroelectric sources in remote northern Ontario to high load areas in southern Ontario such as Toronto, London, and Ottawa. During the 1970's and 80's, Ontario Hydro gradually expanded the 500KV transmission system into what it is today.

In 1974 the Power Corporation Act reorganized the system as a crown corporation called Ontario Hydro, the name it was most usually known by. In many Canadian provinces, including Ontario, hydroelectric power is so common that "hydro" has become synonymous with electric power regardless of the actual source of the electricity.

In 1989, Ontario Hydro published a 4-volume study, up to the year 2014, under the title "Providing the Balance of Power. Ontario Hydro's Plan to Serve Customers' Electricity Needs." with different scenarios attempting to solve the need for additional facilities to replace aging electricity generation stations.

In 1998, the PC government of Mike Harris passed the Energy Competition Act which authorized the establishment of a market in electricity. In April 1999, Ontario Hydro was re-organized into five companies: Ontario Power Generation, the Ontario Hydro Services Company (later renamed Hydro One), the Independent Electricity Market Operator (later renamed the Independent Electricity System Operator), the Electrical Safety Authority, and Ontario Electricity Financial Corporation. The two commercial companies, Ontario Power Generation and Hydro One, were intended to eventually operate as private businesses rather than as crown corporations.

By 2001, Hydro One had acquired 88 municipal utilities. In 2001, the provincial government announced its intention to make an Initial Public Offering of stock in Hydro One. However, in 2002 the Supreme Court of Ontario found that the provincial government lacked the authority to proceed with this offering.

Ontario Power Generation remains a crown corporation, but a part of its generation capacity was privatized when Bruce Nuclear Generating Station was leased to the Bruce Power partnership starting in 2001. The lease lasts until 2018, with an option to further extend the lease up to 2043^[1].

In 2002 an electricity market began operating. However, critics questioned, among other things, whether the market was truly competitive or could ever become competitive, given that an electricity grid is not a private good. Public dismay at an increase in prices led the government of Harris's successor, Ernie Eves, to freeze electricity prices for residential and small business consumers. This freeze was maintained after the Liberal party of Dalton McGuinty replaced the PC government in 2003. The freeze was removed and prices were raised in April, 2004, and have been increased again subsequently.