TORONTO

Getting rid of the patchwork of small electricity distributing companies across Ontario and merging them into regional powerhouses will make things better for consumers, a panel of former MPPs says.

“We think there are big administrative savings,” Murray Elston, panel chairman and one-time Liberal cabinet minister, said at a Queen’s Park news conference Thursday. “The new companies will be able to streamline their capital investments ensuring we don’t have the duplication of effort.”

And while the panel wouldn’t guarantee the cost of delivering power to people’s homes would go down, they said merging the 73 local distribution companies (LDCs) into eight to 12 regional bodies would keep prices from rising as much if nothing was changed.

Elston, energy lawyer and former Tory MPP David McFadden, and Floyd Laughren, finance minister under the NDP, were asked by the government in April to look at the way power is locally distributed in Ontario and make recommendations.

Their report says consolidation will shave $1.2 billion in costs over 10 years, mostly by reducing administration and duplication.

The mergers should be voluntary and led by Ontario Hydro, which would see its distribution arm absorbed into the new entities while leaving its transmission role intact.

Requiring the boards of the new regional distributors to have a majority of independent directors would ensure Hydro One wouldn’t dominate the sector and also safeguard consumer interests, Elston said.

And he denied the recommendations — including urging the government to eliminate the 33% transfer tax on LDC sales widely seen as a brake on selling off the firms — would lead to wholesale privatization.

“Privatization and consolidation are not the same thing,” McFadden said.

PC energy critic Vic Fedeli said provided the mergers are voluntary, his party favours the recommendations and eliminating the transfer tax.

But New Democrat Peter Tabuns said the panel throws open the door to the private sector and would lead to less local input on how electricity gets delivered to consumers.

“The most important thing — and the worst thing — in this report is the opening of the door to privatization,” Tabuns said. “I think that’s bad news for Ontario and it will mean higher costs and less local control.”