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(Posted 9:30 a.m., March 9)
Chiarelli floats solution to settle dispute over suburban Hydro One customers

By Fred Sherwin
Orléans Online

The long standing dispute between the City of Ottawa and Hydro One over suburban residents being serviced by the latter may end up being resolved by an independent arbitrator if a suggestion being floated by Ontario Energy Minister Bob Chiarelli gains any traction.

Chiarelli brought up the idea during an interview with reporters on Friday.

"It certainly would be my wish that they would agree to compulsory arbitration on the price where there would be objective third party saying here's what the appropriate price is," Chiarelli said.

Hydro One currently has close to 50,000 customers within the City of Ottawa, including all of the residents living in the former city of Cumberland creating a situation where residents on one side of the street are served by Hydro One whale residents on the other side of the street are served by Hydro Ottawa.

The dispute between the two hydro utilities has been simmering since amalgamation in 2001. It was exacerbated by a series of blackouts effecting Hydro One customers in the former city of Cumberland in 2008 and 2009.

Since then Hydro One has invested millions of dollars in local infrastructure to ensure greater reliability.

In the past the stumbling block to Hydro Ottawa's acquisition of the Hydro One's customers has been the asking price. Hydro One's recent investments has only inflated the price tag. By bringing in an independent arbitrator to analyze the issue and arrive at price point that is fair to both sides, the dispute might finally get resolved.

But bringing in an independent arbitrator might prove easier said than done. Ottawa Mayor Jim Watson is already throwing cold water on the suggestion which must first be approved by Hydro Ottawa's board of directors.

"Mayor Watson cannot support a solution that does not provide up-front certainty to Ottawa rate payers on the amount that Hydro Ottawa would have to pay for the Hydro One assets. Binding arbitration would not provide that certainty to City of Ottawa rate payers," Watson's office stated through an e-mail statement released on Friday.

While in the past the difference in the end rate between the two utilities was fairly substantial, the gap has closed considerably to the point where it is now less than 10 per cent.

The key sticking point in moving forward is no so much the cost Hydro Ottawa will have to incur to acquire the Hydro One customers, but who will pat for it. There has always been two trains of thought on the matter. One option would see the cost shared by every Hydro Ottawa customer. The other option would see the former Hydro One customers pay for it themselves.

But that decision would not be left up to an arbitrator. It would be up to the Hydro Ottawa's board of directors.

(This story was made possible thanks to their generous support of our local business partners.)

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