Ontario to consolidate two energy agencies

Energy Minister Chris Bentley argued that the merger of Ontario Power Authority (OPA) and the Independent Electricity System Operator (IESO) would save Ontario ratepayers about $25 million a year and allow for a more efficient approach to planning as Ontario integrates new renewable energy projects into the grid and shuts down its last coal-fired plants by the end of 2014. The minister would not predict any savings on hydro bills yet.

Both organizations are planning agencies and do not produce or distribute electricity for consumers. The OPA handles long-term planning such as new power plants and the IESO manages the province’s day-to-day energy needs.

The new entity will have to be approved by legislators at Queen’s Park. Both Ontario opposition parties have earlier expressed their positions. Progressive Conservative Leader Tim Hudak had promised to close the OPA during last year’s election campaign. The New Democrats called for agency consolidation as part of their budget demands. The government needs NDP support for the budget as PCs has vowed to vote against it in the upcoming vote on April 24.

The announcement about the merger follows the launch of the Distribution Sector Panel by the government, which is tasked to review the Ontario energy sector in order to find efficiencies in consultation with municipalities, local distribution companies, electricity distributors association and other energy experts. The Panel is expected to report back to the Minister of Energy within a year.