Wynne Urges Hydro One to Divest its Newly-Acquired U.S. Coal Plant
Ontario Premier Kathleen Wynne is urging the province’s Hydro One utility to get its newly-acquired U.S. subsidiary out of the coal-fired power business, and hinted broadly that the message had been heard.
Wynne’s government privatized the former public utility in 2015, retaining only a minority stake. Last week, Hydro One revealed plans to acquire Spokane, Washington-based Avista Utilities for $6.4 billion. As part of that deal, Hydro One will pick up a share in the 2100-MW, coal-fired Colstrip generating station in Montana. Five other U.S. utilities also own shares in the plant, which supplies consumers in the U.S. northwest, but not in Ontario.
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Environmental groups wasted no time denouncing the acquisition. “Instead of respecting Ontario’s leadership,” in abandoning coal, the Ontario Clean Air Alliance wrote in a release, “Hydro One has slapped us in the face by going shopping for a utility that owns part of one of the largest polluters in the U.S. northwest—the Colstrip Power Plant in Montana.” The group called on the Premier “to walk her talk by telling Hydro One to either drop its deal for Avista or—at the very least—use it to help shut down Colstrip.”
The politics of electricity, and Hydro One’s place in the province’s supply system, have been hard on Wynne. But as a minority shareholder, Ontario cannot instruct the Hydro One board to do anything. A spokesperson for Energy Minister Glenn Thibeault made it clear that “Hydro One’s decisions are its own and will be based on business imperatives,” the Ottawa Citizen reports.
Speaking to reporters during a tour of high tech businesses in Kanata, however, Wynne said she had already raised the issue with Hydro One’s CEO. “I already had a conversation with Mayo Schmidt yesterday,” Wynne said. “And I said, you know, the fact is that we have a coal-free electricity grid here in Ontario, I think that’s a great thing, and I expect that that value system will be shared.”
“In fact,” the Premier added, “the validation that came back is that that’s exactly one of the reasons Avista was looking at this. So I see in this acquisition by Hydro One an opportunity for the values that we share here in Ontario, the values that have led us to create a pretty much pollution-free electricity grid, an opportunity to spread that value system.”
According to the Citizen, Avista “has estimated the cost of replacing its Colstrip electricity with a power from a gas-fired generating station (which is pretty much what Ontario did to close its coal plants) at US$250 million, money it would make up partly in reduced profits and partly by charging customers more.”