News Release

Nuclear Welfare: New Harris Plan for Ontario Electricity Market

(Toronto, October 27, 1998) The Ontario government's new tax on electricity destroys the promise of competition in the electricity market. The government will be outlining a plan today to pay the bulk of Ontario Hydro's debt through transition charges - a new tax on the use of electricity.

Every Ontario consumer will pay the charge regardless of the source of the electricity. The off-loading of Ontario Hydro's nuclear debt is an unfair benefit to Genco (the generation portion of Ontario Hydro under the restructuring plan) that will effectively kill competition in the new electricity markets.

"Wind power and other sources of non-polluting electricity will be forced to pay off the nuclear debt while trying to compete with Genco which will to dominate the supply of electricity in the province," said Christine Elwell, Senior Policy Analyst, Sierra Club of Canada.

"And it gets worse. The billions of dollars of debt will be a strong incentive to sell off Hydro and public utility assets. We will be selling Niagara Falls (generating station) and other non polluting sources to pay off the nuclear debt only to be saddled with the aging unreliable nuclear reactors and dirty coal plants," she continued.

The debt will be held by a "debtco", one of the three companies set up by the government to replace Ontario Hydro. It will not only collect this 'debt tax' but receive the proceeds from the sale of Hydro assets. Continued reliance on nuclear power also commits the province to the use of large scale coal plants to supply peaking and replacement power.

The Sierra Club of Canada and the Campaign for Nuclear Phaseout have advocated the phase out of nuclear energy and its replacement with non-polluting renewable sources. Fair competition and fair distribution of Hydro's debt would allow new sources to come on stream.

"Clearly, Ontario's commitment to nuclear power, has been a costly environmental and economic mistake. There is no need to repeat it,"  said Kristen Ostling, National Coordinator, Campaign for Nuclear Phaseout.

Today's stranded debt announcement seriously undermines the development of non-polluting renewable sources and puts at risk Ontario's population and environment. All suggestions for protecting the environment through fair market mechanisms have been ignored in the government's rush to create a false competitive market. It continues the mistakes of past governments and
commits the people of Ontario to generations of unnecessary expense and danger.

"It's time to end nuclear welfare in Canada, not start a new round," said John Bennett, Director Energy & Atmosphere, Sierra Club of Canada.

For more information, contact:

John Bennett, Christine Elwell (613) 241-4611

Copyright Sierra Club of Canada, 1998