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Hydro One Limited is an
electricity transmission Electric power transmission is the bulk movement of electrical energy from a generating site, such as a power plant, to an electrical substation. The interconnected lines that facilitate this movement form a ''transmission network''. This is ...
and distribution
utility In economics, utility is a measure of a certain person's satisfaction from a certain state of the world. Over time, the term has been used with at least two meanings. * In a normative context, utility refers to a goal or objective that we wish ...
serving the
Canadian province Canada has ten provinces and three territories that are sub-national administrative divisions under the jurisdiction of the Constitution of Canada, Canadian Constitution. In the 1867 Canadian Confederation, three provinces of British North Amer ...
of
Ontario Ontario is the southernmost Provinces and territories of Canada, province of Canada. Located in Central Canada, Ontario is the Population of Canada by province and territory, country's most populous province. As of the 2021 Canadian census, it ...
. Hydro One traces its history to the early 20th century and the establishment of the Hydro-Electric Power Commission of Ontario (renamed "Ontario Hydro" in 1974). In October 1998, the provincial legislature passed the ''Energy Competition Act'' which restructured Ontario Hydro into separate entities responsible for electrical generation, transmission/delivery, and price management with a final goal of total privatization. Hydro One was established at this time as a corporation under the ''Business Corporations Act'' with the
Government of Ontario The Government of Ontario () is the body responsible for the administration of the Provinces and territories of Canada, Canadian province of Ontario. The term ''Government of Ontario'' refers specifically to the executive—political Minister ...
as sole shareholder. Following its
initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investm ...
on the
Toronto Stock Exchange The Toronto Stock Exchange (TSX; ) is a stock exchange located in Toronto, Ontario, Canada. It is the List of stock exchanges, 10th largest exchange in the world and the third largest in North America based on market capitalization. Based in th ...
in 2015, the Government of Ontario began selling shares to the public with a final goal of 60% of the company being held by private investors. A report released on December 2, 2015, by the
Auditor General of Ontario The auditor general of Ontario () is an independent officer of the Legislative Assembly of Ontario to aid accountability by conducting independent audits of Ontario provincial government operations. The office was created in 1869. Office The ...
raised concern with the sale, indicating that
power outage A power outage, also called a blackout, a power failure, a power blackout, a power loss, a power cut, or a power out is the complete loss of the electrical power network supply to an end user. There are many causes of power failures in an el ...
s are increasing and that Hydro One's equipment is aging and "at very high risk of failing". The estimated cost of necessary repairs was $4.472 billion.


Service territory

Hydro One is a
holding company A holding company is a company whose primary business is holding a controlling interest in the Security (finance), securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own Share ...
with four
subsidiaries A subsidiary, subsidiary company, or daughter company is a company completely or partially owned or controlled by another company, called the parent company or holding company, which has legal and financial control over the subsidiary company. Unl ...
, the largest being Hydro One Networks. It operates 98% of the high voltage transmission grid throughout Ontario, and serves 1.4 million customers primarily in rural areas across the province in its capacity as Ontario's largest distribution utility.


System information

Hydro One's transmission line voltages are 500,000, 230,000 and 115,000 volts AC. Hydro One has interconnections with
Manitoba Hydro The Manitoba Hydro-Electric Board (), operating as Manitoba Hydro, is the electric power and natural gas public utility, utility in the province of Manitoba, Canada. Founded in 1961, it is a provincial Crown Corporation, governed by the Manitoba ...
,
Hydro-Québec Hydro-Québec () is a Canadian Crown corporations of Canada#Quebec, Crown corporation public utility headquartered in Montreal, Quebec. It manages the electricity generation, generation, electric power transmission, transmission and electricity ...
, Minnesota Power, DTE Energy/ ITC, National Grid (the former Niagara Mohawk Power) and the
New York Power Authority The New York Power Authority (NYPA) is a public benefit corporation owned by the State of New York and is the largest state public power utility in the United States. It provides some of the lowest-cost electricity in the nation, operating 16 ge ...
.


Generators

Hydro One works with the transmission and distribution network by connecting generating facilities operated by
Ontario Power Generation Ontario Power Generation Inc. (OPG) is a Crown corporations of Canada, Crown corporation and "government business enterprise" that is responsible for approximately half of the electricity generation in the province of Ontario, Canada. It is w ...
,
Bruce Power Bruce Power Limited Partnership is a Canadian business partnership composed of several corporations. It exists (as of 2015) as a partnership between TC Energy (31.6%), BPC Generation Infrastructure Trust (61.4%), the Power Workers Union (4%) an ...
, and a number of other privately owned companies, to it. The generators deliver the electricity they generate at hydroelectric, natural gas, wind, solar and nuclear facilities to businesses and people across Ontario. The generators have different responsibilities than Hydro One. The power from generators connected to Hydro One's high
voltage Voltage, also known as (electrical) potential difference, electric pressure, or electric tension, is the difference in electric potential between two points. In a Electrostatics, static electric field, it corresponds to the Work (electrical), ...
system is transformed to more than 50 kV (50,000 volts). The transmission-connected generators are registered with the
Independent Electricity System Operator The Independent Electricity System Operator (IESO) is the Crown corporation responsible for operating the electricity market and directing the operation of the bulk electrical system in the province of Ontario, Canada. It is one of seven indepen ...
(IESO). Transmission lines, strung between metal towers or concrete poles, are not as plentiful as their distribution lines, which are most commonly strung between wooden poles. The distribution system is connected to Hydro One's generating facilities. It delivers the electricity generated at hydroelectric, wind and other facilities to businesses and people across Ontario. These distribution facilities work at voltages of 50 kV or less. Ontario's electricity grid is made up of a 29,000 km high-voltage transmission network that delivers electricity to large industrial customers and municipal utilities and 123,000 km low-voltage distribution system that serves about 1.3 million end use customers mainly in rural service areas and smaller municipal communities in the province. More than 75% of the applications to connect small generators are in Hydro One's rural service territory along the company's distribution system. While Hydro One has connected thousands of small projects to the grid it is approaching their technical limits of the wires and equipment in some rural locations. In these areas there are two issues that limit the number of projects that Hydro One can safely connect without putting the grid in jeopardy. The first issue is the physical limits of the power lines and the second is a phenomenon called '
islanding Islanding is the intentional or unintentional division of an Wide area synchronous grid, interconnected power grid into individual disconnected regions with their own power generation. Intentional islanding is often performed as a Defence in depth ...
'. In larger areas that are densely populated, Hydro One's wires are thicker and designed to deliver larger amounts of electricity. In rural areas, Hydro One's distribution wires are smaller, thinner and deliver a smaller amount of electricity because they were designed to serve a much smaller number of customers than in large urban centers. These thinner lines deliver electricity safely and reliably to rural customers and are able to support the connection of small generation projects spread across the line, but these lines become over loaded when more electricity is fed back to the grid than the line was built to deliver. In some areas where the program is extremely popular, many generators want to connect to the same thin line but the line is not able to support the transfer of so much electricity. The second issue is about islanding. Hydro One's distribution system knows how to protect itself under certain conditions. For instance, during a storm if a tree falls on a line, the system shuts itself down, similar to a circuit breaker. This protects the company's customers and employees from accidentally coming into contact with a live electrical line; it also protects appliances like televisions from uncontrolled surges and drops in voltage. In addition, when there is a fault, the line must be dead. Also when solar panels are attached to such lines, they must also be shut down when there is a fault on the line. If they are not shut down, electricity keeps flowing from the solar panels to all points between the panels. This can create an unsafe condition called islanding, which can put at risk customers, employees, and the equipment drawing power from that line. Hydro One prevents islanding by limiting the amount of generation that the company connects in one area; this ensures that the electrical load is greater than generation at all times. Ontario has moved to smart meters, which could support even more solutions to these problems. By using the company's existing network and working with customers, Hydro One is exploring new ways to deliver the cleaner electricity which Ontarians are helping to generate.


History

Hydro One was created out of the Hydro-Electric Power Commission of Ontario (HEPC or Ontario Hydro), which was established in 1906 by the provincial ''Power Commission Act'' to build transmission lines to supply municipal utilities with electricity generated by private companies already operating at
Niagara Falls Niagara Falls is a group of three waterfalls at the southern end of Niagara Gorge, spanning the Canada–United States border, border between the Provinces and territories of Canada, province of Ontario in Canada and the state of New York (s ...
. The first chairman was Adam Beck,
minister without portfolio A minister without portfolio is a government minister without specific responsibility as head of a government department. The sinecure is particularly common in countries ruled by coalition governments and a cabinet with decision-making authorit ...
in the provincial government of Sir James P. Whitney. Beck had been an advocate for a publicly owned electricity grid. The commission's initial responsibility was to build transmission lines in order to supply municipal utilities with power. The power that was being transferred by HEPC was already being generated at Niagara Falls by private companies. Also during 1906, the company appointed Adam Beck as chairman. A year later, Beck and his colleague William Peyton Hubbard fought for the public ownership of the company. Later in 1908, HEPC purchased power from Niagara Falls and sought to transmit this power over its own lines, which at the time, had not been established. The company continued its steady growth for the next few years. and by 1914 HEPC built its first owned power generating station located on the Severn River. In the early 1920s, HEPC expanded further and became an electricity distributor itself. The company now transmitted to rural areas in addition to municipal utilities. In 1922 the company's first unit of the Chippawa hydroelectric development on the Niagara River began service. Upon the unit's completion in 1925, it was the largest generating station in the world. HEPC bought the generation and transmission assets of the Electrical Development Corporation, which was the last remaining private power company. In 1926, HEPC entered into a long-term contract with Gatineau Power Company, located in Quebec. These contracts were needed to accommodate a growing demand for power and electricity. However, these same contracts were to become a source of controversy during the Great Depression when there was an overcapacity in the system. The development of the St. Lawrence and
Ottawa Ottawa is the capital city of Canada. It is located in the southern Ontario, southern portion of the province of Ontario, at the confluence of the Ottawa River and the Rideau River. Ottawa borders Gatineau, Gatineau, Quebec, and forms the cor ...
rivers was stalled by jurisdictional complications. The development of the rivers would have allowed access to a preferred source of power. In 1939 the Quebec contracts were reinstated and the development of the rivers were continued. In the late 1940s and early 1950s HEPC took a great leap forward with development of hydro-electric potential along the St. Lawrence River. During the mid-1950s HEPC joined all its power stations and transmission systems into one network in order to become more efficient and flexible. Also during the 1950s, hydro-electric development was supplemented by the construction of thermal coal-fired power stations in Toronto. And by the end of the 1950s HEPC began construction of Canada's first extra-high voltage (500,000-volt) transmission lines. This brought power from northern Ontario to demand in southern Ontario. However, these transmission lines would only come into service in 1967. And by the start of the 1970s all of Ontario's power systems had merged, creating a province-wide grid. In 1974, the ''Power Corporation Act'' reorganized the system as a
crown corporation Crown corporation () is the term used in Canada for organizations that are structured like private companies, but are directly and wholly owned by the government. Crown corporations have a long-standing presence in the country, and have a sign ...
called "Ontario Hydro", the name by which it was most usually known. In 1998, the Progressive Conservative Party (PC) government of
Mike Harris Michael Deane Harris (born January 23, 1945) is a retired Canadian politician who served as the 22nd premier of Ontario from 1995 to 2002 and leader of the Progressive Conservative Party of Ontario (PC Party) from 1990 to 2002. Taking the PC ...
passed the ''Energy Competition Act'' which authorized the establishment of a market in electricity. In April 1999, Ontario Hydro was re-organized into five successor companies:
Ontario Power Generation Ontario Power Generation Inc. (OPG) is a Crown corporations of Canada, Crown corporation and "government business enterprise" that is responsible for approximately half of the electricity generation in the province of Ontario, Canada. It is w ...
, the Ontario Hydro Services Company (later renamed Hydro One), the Independent Electricity Market Operator (later renamed the
Independent Electricity System Operator The Independent Electricity System Operator (IESO) is the Crown corporation responsible for operating the electricity market and directing the operation of the bulk electrical system in the province of Ontario, Canada. It is one of seven indepen ...
), the Electrical Safety Authority, and Ontario Electricity Financial Corporation. The two commercial companies, Ontario Power Generation and Hydro One, were intended to operate as private businesses rather than as crown corporations. By 2001, Hydro One had acquired 88 municipal utilities. In December 2001 the provincial government announced its intention to sell Hydro One under an
initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investm ...
(IPO), however by April 2002 various groups in opposition to the plan challenged the government in the
Ontario Superior Court of Justice The Superior Court of Justice (French: ''Cour supérieure de justice'') is a superior court in Ontario. The Court sits in 52 locations across the province, including 17 Family Court locations, and consists of over 300 federally appointed judges. ...
, forcing a halt to the IPO. In 2002, an electricity market began operating. However, critics questioned, among other things, whether the market was truly competitive or could ever become competitive, given that an electricity grid is not a private good. Public dismay at an increase in prices led the government of Harris's successor,
Ernie Eves Ernest Larry Eves (born June 17, 1946) is a Canadian lawyer and former politician who served as the 23rd premier of Ontario from 2002 to 2003. A Progressive Conservative Party of Ontario, Progressive Conservative, he took over the premiership up ...
, to freeze electricity prices for residential and small business consumers. This freeze was maintained after the
Liberal Party The Liberal Party is any of many political parties around the world. The meaning of ''liberal'' varies around the world, ranging from liberal conservatism on the right to social liberalism on the left. For example, while the political systems ...
of
Dalton McGuinty Dalton James Patrick McGuinty Jr. (born July 19, 1955) is a Canadian former politician who served as the 24th premier of Ontario from 2003 to 2013. He was the first Liberal leader to win two majority governments since Mitchell Hepburn nea ...
replaced the PC government in 2003. The freeze was removed and prices were raised in April 2004, and have been increased again subsequently. In 2017, Hydro One agreed to acquire U.S. energy company
Avista Avista Corporation is an American energy company which generates and transmits electricity and distributes natural gas to residential, commercial, and industrial customers. Approximately 1,550 employees provide electricity, natural gas, and othe ...
for CA$6.7 billion in cash. In 2018, the annual compensation paid to CEO Mayo Schmidt became a campaign issue in the 2018 Ontario election. Progressive Conservative Party leader
Doug Ford Douglas Robert Ford Jr. (born November 20, 1964) is a Canadian politician and businessman who has served as the 26th and current premier of Ontario and leader of the Progressive Conservative Party since 2018. He represents the Toronto rid ...
promised to remove Schmidt if elected, although it was speculated that it would cost in severance payments under a clause of "change of control" in Schmidt's contract, which shareholders had approved in May. The PCs won the election and in July 2018, the newly elected government convinced CEO Mayo Schmidt to retire immediately. News reports indicated that Schmidt would receive a payment of in lieu of continuing benefits and would also be entitled to receive incentive bonuses for previous years' achievements, Hydro One stock with a value of approximately . His annual pension was estimated as exceeding . The government and other major shareholders in Hydro One then began the process of appointing an entirely new board of directors after accepting the resignation of all previous members. The new Board is searching for a chief executive to replace Schmidt. In the interim, CFO Paul Dobson is serving as acting CEO. In December 2018 the Washington Utilities and Transportation Commission blocked the purchase of Avista, citing concerns about the independence of Hydro One from the provincial government. Hydro One paid Avista a $103 million termination fee. In March 2025, Hydro One Networks announced that it completed the acquisition of a 48% interest in the East-West Tie Limited Partnership, which owns the East-West Tie line, a 450-kilometre line between Wawa and Thunder Bay, for CAD 261 million.


Restructuring

Ontario Hydro was restructured on April 1, 1999, into five separate entities:
Ontario Power Generation Ontario Power Generation Inc. (OPG) is a Crown corporations of Canada, Crown corporation and "government business enterprise" that is responsible for approximately half of the electricity generation in the province of Ontario, Canada. It is w ...
, the Ontario Hydro Services Company, the
Independent Electricity System Operator The Independent Electricity System Operator (IESO) is the Crown corporation responsible for operating the electricity market and directing the operation of the bulk electrical system in the province of Ontario, Canada. It is one of seven indepen ...
(originally named the Independent Electricity Market Operator), the Electrical Safety Authority, and Ontario Electricity Financial Corporation. On May 1, 2000, the Ontario Hydro Services Company was renamed "Hydro One Incorporated" and reorganized as a holding company with four subsidiaries: * Hydro One Networks Inc. * Hydro One Remote Communities Inc. * Hydro One Telecom Inc. * Hydro One Brampton Between 1998 and 2000, Hydro One acquired 88 municipal electrical utilities. Many local/municipal distribution companies were also consolidated during this time. In May 2002, the provincial government launched an open electricity market, although generating and distribution remained under control of the government. From 2000 to 2017, Hydro One directly owned the distribution utility for the city of
Brampton Brampton is a city in the Canadian Provinces and territories of Canada, province of Ontario, and the regional seat of the Regional Municipality of Peel. It is part of the Greater Toronto Area (GTA) and is a List of municipalities in Ontario#L ...
. This subsidiary operated separately from the main Hydro One corporation and operated only in the city of Brampton. Hydro One Brampton was acquired by Alectra Utilities on February 28, 2017. In August 2014, Hydro One acquired the assets and customers of Norfolk Power.


Privatization

On October 29, 2015, Premier
Kathleen Wynne Kathleen O'Day Wynne ( ; born May 21, 1953) is a former Canadian politician who served as the 25th premier of Ontario and leader of the Ontario Liberal Party from 2013 to 2018. She was Member of Provincial Parliament (Ontario), member of provinci ...
confirmed rumours that the province planned to sell 60% of Hydro One ("broadening of ownership"), essentially completing the plan proposed by the PC government decades before. Some of the proceeds from the sale of shares would be used to begin financing of Premier Wynne's 10-year plan for public transit and infrastructure projects in addition to reducing the provincial deficit. The plan was criticized by many, including Stephen LeClair, the new financial accountability officer for Ontario. LeClair warned that the sale of an entity that generated a $750 million profit in 2014 would lead to a long term negative financial impact for the province. The sale will certainly provide short term benefits, generating an estimated total of $9 billion at a time when the provincial government is "desperate for money" (according to ''
The Globe and Mail ''The Globe and Mail'' is a Newspapers in Canada, Canadian newspaper printed in five cities in Western Canada, western and central Canada. With a weekly readership of more than 6 million in 2024, it is Canada's most widely read newspaper on week ...
''), with one of the largest subsovereign debts in the world. The estimated revenue will not all be a windfall for the provincial coffers however, since roughly $5 billion is earmarked to pay down Hydro One's $8.5 billion debt. The balance of the revenue from the Hydro One sale would help meet the targets laid out by the provincial Liberal government in its April 2015 budget. Although the budget announced some austerity measures, there was no indication of any new revenue sources. Even so, the plan was to reduce the Province's estimated budget deficit by $2.5 billion to $8.5 billion in the 2015–16 fiscal year, then to $4.8 billion in 2016–17 and to have a balanced budget by 2017–18, according to Finance Minister
Charles Sousa Anthony Charles Sousa (born September 27, 1958) is a Canadian politician who has served as the Member of Parliament from Mississauga-Lakeshore since December 12, 2022. He previously served as the Minister of Finance for Ontario from 2013 to ...
. This promise was made in spite of increasing demand for government services due to an aging population, at a time when "... a slowing domestic economy are putting downward pressure on its revenue streams," according to
Ed Clark Edward E. Clark (born May 4, 1930) is an American lawyer and politician who ran for governor of California in 1978, and for president of the United States as the nominee of the Libertarian Party in the 1980 presidential election. Background C ...
, Wynne's chief advisor on government assets, as quoted in ''The Globe and Mail''. On November 5, 2015, the province began the first phase of the process, with an
initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investm ...
(IPO) of 81.1 million shares (equivalent to 13.6% of Hydro One) on the
Toronto Stock Exchange The Toronto Stock Exchange (TSX; ) is a stock exchange located in Toronto, Ontario, Canada. It is the List of stock exchanges, 10th largest exchange in the world and the third largest in North America based on market capitalization. Based in th ...
. It was the largest IPO in Canada since 2000. The estimated proceeds from this IPO were expected to total $1.83 billion. This was the first step in the long-term goal of gradually selling 60% of the utility. Three more offerings, roughly the same size, followed in 2016 and 2017. Finance Minister Sousa stated on November 4, 2015, that the Hydro One IPO was already "oversubscribed" at that time, with more advance orders than the shares that would be available. On November 5, 2015, the stock closed at $21.62, up 5.46% or $1.12 from the IPO price of $20.50, with more than 18 million shares sold. Although this is not necessarily indicative of a rosy future for the share price, Sousa was optimistic. "Every uptick on the market is an indication the future offerings will net even greater proceeds benefiting all Ontarians." However, shares dropped 3.9% on December 2, 2015, because of Auditor-General Lysyk's warning that the cost of replacing outdated transmission assets was $4.47 billion, information that might continue to depress the share price. Hydro One responded by indicating that steps were under way to increase reliability: "There are several initiatives under way to ensure investments strike the appropriate balance between reliability and cost." Some consumer advocacy groups and some analysts have raised red flags, concerned with the risk of increasing electricity costs under a privatized Hydro One. "Internal polling done for the Wynne government — released under Access to Information — found that 73 per cent of Ontarians oppose the government's plans to privatize Hydro One, the key transmission arm of the original public utility," noted Linda McQuaig in a 2016 ''Toronto Star'' opinion article. On the other hand, Brady Yauch, executive director of the Consumer Policy Institute discussed the potential benefits in an opinion piece in the ''Financial Post'', including "lower rates for ratepayers". His premise is based on the potential increase in productivity of Hydro One under private control, "something that the government has failed to do adequately", bringing high salaries into line, and reducing pension liabilities in future, with employees contributing higher amounts to their pensions. "Given the government's performance over the last 15 years, it calls for hopeful optimism ...", said Yauch. A secondary offering of 72.4 million Hydro One shares, equivalent to 14.5%, in April 2016 generated $1.7 billion in revenue for the provincial government. Crown corporation
Ontario Power Generation Ontario Power Generation Inc. (OPG) is a Crown corporations of Canada, Crown corporation and "government business enterprise" that is responsible for approximately half of the electricity generation in the province of Ontario, Canada. It is w ...
purchased 9 million of the shares, giving it a 1.5% stake in Hydro One. In May 2017, the Ontario government completed the third and final sale of Hydro One shares worth $2.8 billion. After the offering, Ontario held 48.9% of Hydro One's common shares: 47.4% directly held by the government, and 1.5% held by Ontario Power Generation. The Province of Ontario is a shareholder of Hydro One with approximately 47.2% ownership at September 30, 2021.


First Nations and Métis relations

As part of the partial privatization of Hydro One, the provincial government announced it would sell up to 15 million shares (2.5%) to the indigenous and Métis nations of Ontario for "their collective benefit". In January 2018 the Ontario government announced it had sold over 14 million shares of Hydro One to OFN Power Holdings, a partnership controlled by 129 First Nations around the province. The shares represented 2.4% of outstanding common shares, reducing the government's stake in the company to approximately 47.4%.


See also

* David F. Denison *
Electricity policy of Ontario The electricity policy of Ontario refers to plans, legislation, incentives, guidelines, and policy processes put in place by the Government of the Province of Ontario, Canada, to address issues of electricity production, distribution, and consump ...
* Helicopter AirStair *
List of Canadian electric utilities This is a list of the electric utilities in Canada. List of electric utilities by size List of electric utilities by province or territory This is a list of Canada, Canadian public and private electric utilities, by province. Electri ...


References


2005 Annual Report (PDF)


External links

* *
Historical timeline
produced by Hydro One
Distribution Rate Application

Transmission Rate Application

Ontario Energy Board

Ontario Power Generation

Ontario Electricity Financial Corporation
*   {{Authority control 1999 establishments in Ontario Former Crown corporations of Ontario Ontario electricity policy Ontario Hydro Energy companies established in 1999 Companies based in Toronto Electric power companies of Canada Companies listed on the Toronto Stock Exchange Electric power transmission system operators in Canada