Quote:
Originally Posted by 1overcosc
Oops, got that one wrong.. but many local utilities in the province are privately owned. Cornwall's is one.. it's owned by Fortis.
As for rejected rate increases, Hydro Ottawa had a bunch not too long ago. It happens a lot. The OEB does not blindly approve anything utilities ask.. it's quite a rigorous process to get rate changes approved.
Except any rate increase for salary expenses.. will go to salary expenses. Private utilities have a massive incentive to reduce wage bills as cutting costs is the only way for them to grow their profits. Once the government's stake falls below 50%, Hydro One is no longer subject to the Charter of Rights and Freedoms and the resulting requirement to bend over to unions effectively imposed by Saskatchewan Federation of Labour v. Saskatchewan, among other court decisions based on association rights. That alone will give them way more power against the union than the company does has now.
|
Saskatchewan Federation of Labour v Saskatchewan took away the government's ability to impose contracts unilaterally. Hydro One is still bound by the labour laws of ontario, which require, among other things, the employer to bargain in good faith. However, unlike a competitive market (where an employer can threaten to move to Mexico) a regulated monopoly doesn't have a whole lot of leverage over its workers in the collective bargaining process.
Look at it this way. If it was the case that hydro one is going to be able to cut its payroll and put those savings into profits, then one would expect Hydro One to be outperforming the market. That is not the case, Hydro One has gained 11% in a last year while the TSX index has gained 29%. The market is pricing the stock like a preferred share that pays a steady dividend.
Either way, my initial point is still true, the province monetized future dividends to fund transit, which means hydro customers have to pay more than if those dividends had been instead uses to lower rates.