IPPSO statement on the end of the price freeze, October 31, 2003

For immediate release: October 31, 2003

Power producers welcome move to realistic prices

“The Ontario government has sent out an important signal by setting the province on a course toward realistic electricity prices,” said John Brace, President of IPPSO, the Independent Power Producers’ Society of Ontario. “Not only will this help ease the provincial deficit and encourage efficiency, if properly implemented it will improve the climate for investment in new and innovative energy technologies.”

Premier McGuinty seems to be taking a middle path which sees prices approximating the full cost of power, but which also smooths out the ups and downs and shows sensitivity to smaller consumers who would be particularly hurt by sudden changes.

“We have never objected to the idea of government providing limited special protection to small and particularly vulnerable energy consumers, but wholesale rate subsidies is a wasteful way to protect the vulnerable,” Brace added.

“The price cap was having a negative effect on the industry not just because it made it harder to find customers, but because it raised the spectre of a future of unpredictable government action that might constrain the industry - and the very real risk of insufficient supply.”

IPPSO Executive Director Jake Brooks added that, “Subsidizing electricity rates was unsustainable, to say the least. The rate freeze actually encouraged imports and the use of more polluting technology.”

“When consumers see the full cost of the power they use, they learn to use it more wisely, and a whole host of new and innovative energy alternatives become more economic, from gas conversion to renewable energy. With one move, ending the freeze will make the economy more efficient, reduce pollution, and attract investment in cleaner technology. We’re pretty sure the government has more pressing uses for the money than subsidizing inefficient energy consumption.”

Brace cautioned however that many details remain to be clarified and said, “We look forward to working with the government and with other stakeholders to create the conditions necessary for investment in generation in Ontario.”

IPPSO is a non-profit organization representing more than 100 companies involved in the generation of electricity in Ontario, including generators and suppliers of services, equipment and consulting services. IPPSO members produce power from co-generation, hydro-electric, gas, coal, nuclear, wind energy, waste wood and other sources. IPPSO's members currently produce more than 95% of the electricity consumed in Ontario.

For more information, contact:
Stephen Probyn, Director 416-777-2800
John Brace, President, 416-962-6262
Jake Brooks, Executive Director, 416-322-6549
Rob McLeese, Past President 416-366-4820

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Independent Power Producers' Society of Ontario, PO Box 1084, Stn. F., Toronto, Ontario M4Y 2T7 Canada, tel. 416-322-6549 fax 416-481-5785 e-mail: ippso@ippso.org http://www.newenergy.org

For queries or suggestions, please forward to:

IPPSO, PO Box 1084 Station F, Toronto, Ontario, M4Y 2T7 Canada.
Street address: 163-C Eastbourne Ave., Toronto, Ontario M5P 2G5
(416) 322-6549 fax 416-481-5785 e-mail: ippso@ippso.org

Last update: October 31, 2003 URL: http://www.newenergy.org