Perspectives on industry restructuring

An industry association perspective on restructuring in the electrical industry was offered, placing the ongoing debate about deregulation and competition in the industry in Ontario into a Canadian and a global context. It was found that the move towards deregulation was a global phenomenon, fuelled by the emergence of increasingly open and highly competitive global markets, heightened consumer expectations, and new technologies and convergence. Examples from the U.K., Norway, Australia, New Zealand and the United States were cited to indicate the spread of this trend. Canadian utilities, among them B.C. Hydro, Nova Scotia Power and the Alberta utilities being prime examples, also have restructured recently into separate generation, transmission, distribution and consumer service units to better react to changing market needs. Alliances with other utilities or competitors in the energy sector to pursue business opportunities outside traditional markets, are also not uncommon. Therefore, it was only a question of time for Ontario Hydro, the largest Canadian electric utility, to come under public pressure to follow the national and global trend. The MacDonald Committee recommendations provide the foundation for radical change for the industry. If and when implemented, they could have a major impact on how the electricity sector in Canada will operate in the years to come. Sound decisions by the Ontario government as to the appropriate regulatory model may also determine the province's ability to compete in the unfolding restructuring of electricity markets throughout North America