The Parkdale-Liberty Villager

It's a decision that could be made without reducing services, increasing costs to customers or cutting staff. It doesn't involve controversies such as advertising in parks or privatizing waste collection. Worth a look, don't you think?

Here's the concept: sell Toronto Hydro.

Owned entirely by the city, Toronto Hydro delivers our electricity, operates the largest wireless Internet zone in Canada, owns a network of fibre optic cables for data transmission, plus has other business operations.

Recently the value of this utility was estimated in the $2.5 billion to the $3 billion range. In exchange for its investment, last year Toronto received about $113 million in dividends and interest. That's a return of about 4.5 per cent.

If managers on Bay Street were faced with this level of performance, they would quickly find investments with higher returns.

Those who have studied Toronto Hydro share the same view.

The Mayor's Independent Advisory Panel advises that, "If monetized it could single-handedly eliminate the majority of the city's existing debt as well as a significant proportion of its annual debt servicing costs."

The few large municipalities still owning utilities have come to the same conclusion.

The City of Mississauga has hired specialists to find out the worth of its Enersource Hydro Mississauga. Edmonton sold its utility, putting funds into an interest-bearing long-term fund. Part of Hydro Ottawa is for sale.

But even if the sale is good financially, there is the question of whether divesting is in the public interest.

The greatest worry comes from consumers who fear their rates will rise. The real answer is that council doesn't control rates now. Hydro operates within tight provincial regulations that establish the rates, standards, conduct and levels of service. Those who mistakenly believe hydro takes orders from the city should have seen the debate last term when hydro fought council's request to increase payments.

Council's three positions on hydro's 11-member board are more window dressing than instruments of control. With a doubt, changing hydro's ownership will not mean a rate increase for users.

Environmentally sensitive types have expressed concerns that losing the city as a shareholder might slow hydro's environmental initiatives such as a proposed wind farm or the use of lake water for air conditioning. On the contrary, a fully independent hydro board is more likely to approve a lake-based wind farm within sight of Toronto's vocal homeowners.

There remains the issue of whether an independent utility would honour contracts with existing bargaining units. Effective legislation on successor rights insures that workers are protected.

More importantly for the average Torontonian, removing the dead hand of hydro's debt will allow the city to undertake new capital projects while keeping debt well within prudent limits. Instead of cutbacks, there is the real prospect of significant civic job creation in building community centres, stations for emergency services and repairing infrastructure including transit.

So what's the catch? Only inertia.

According to the experience of other large municipalities and the advice of the mayor's own Independent Advisory Panel, there is value in examining the city's ownership in its utility. Unlocking its value for Torontonians has the potential to restore our infrastructure, enhance our quality of life and to create jobs.