To visit the Windsor Transformer Station near Wellington and John is to take a walk into the history of electrical power. Toronto Hydro built the station in 1950, when Louis St. Laurent was prime minister and Harry Truman was in the White House.

Apart from an expansion in 1968, the station has remained much as it was then. Rows of lockers in battleship grey line long, tiled corridors. The lockers hold giant circuit breakers that guard Toronto's power grid against damaging short circuits or power overloads, just as the circuit breaker on your basement switch box protects your home.

Supervisor Mario Arruda advises a visitor not to bump into the lockers. He might just knock out power to some downtown office building.

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"Most of this equipment is 60 years old," he said. "It's at the point where it needs to be replaced."

Like much of Toronto's infrastructure – water pipes, sewers, bridges, expressways – its electrical grid is an artifact of another era. It was built out in the post-war-boom years of the fifties and sixties. Now, it is old, often unreliable and badly in need of renewal.

Toronto Hydro, the publicly owned utility that distributes power to 700,000 customers in Canada's biggest city, says that nearly half of its equipment is past its "useful life," or will be within 10 years.

The cost of rebuilding is enormous. Hydro reckons the equipment that needs renewing has a replacement value of $5-billion. To pay the bill, Hydro applied for a special rate increase that would raise the tab for the average customer by $5 a month. Earlier this month, the Ontario Energy Board turned it down flat, saying Hydro had failed to prove it needed the hike to do the job.

In response, the utility made one of the most dramatic gestures in its century-long history. It staged what amounts to a corporate strike and abruptly stopped work on all renewal projects, throwing hundreds of contractors out of work and warning it might have to lay off 20 per cent of its own work force of 1,700.

Whoever is in the right, Hydro or the OEB, the high-level dispute cast a spotlight on the state of Toronto's vital power grid. Both sides agree it needs heavy investment to keep the juice flowing as smoothly as customers have come to expect.

Outages are a way of life

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Electricity is the lifeblood of a 21st-century city. Energy-gobbling condos are popping up all over town. Plugged-in city dwellers rely on their electronics for work and play.

But Toronto takes its grid for granted. Most of us are oblivious to the web of power lines, transformers and breakers that keep the city humming night and day. Except, of course, when it fails.

The huge blackout that plunged northeastern North America into darkness in 2003 was a reminder of the complexity and fragility of the grid. Toronto got another reminder when a circuit breaker exploded in an Etobicoke transformer station on a steamy summer day in 2010, affecting power to 250,000 homes and many downtown office buildings.

Other warning signs abound. In the last month alone, there have been at least two significant outages. An underground cable failed in the Finch and Neilson Road area, affecting 150 homes. When crews fixed the cable, it failed at another point along the line, and repair crews had to go in again.

In the downtown east end, a fire in an underground vault knocked out power to several blocks. The equipment in the vault was old and scheduled to be replaced. One building, 33 Princess St., was without power for 26 hours.

In some areas, regular outages are a way of life. Don Mills homeowner Dan Servos says that his neighbourhood suffers five to 10 a year, mostly as a result of aging transformers on hydro poles or of tree branches hitting old, exposed power lines. Some outages have lasted up to 24 hours. Others have knocked out the heat on cold winter nights. The problem is so well-known that thieves have started to take advantage of the blackouts to rob houses. Mr. Servos lost property worth $20,000 in a 2010 break-in.

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"I just can't imagine in a modern society how we're not able to keep our power networks current," he says. "Why haven't we made it a priority?"

The city's budget chief, councillor Mike Del Grande, says he has had two transformers blow on his Scarborough street. Anticipating trouble with the grid, he bought a gas-run portable generator a decade ago and runs his house off it when the power goes off.

Hydro says that 40 per cent of outages are caused by defective equipment, not stormy weather, downed trees or other events.

Though the utility has spent $400-million a year for the past two years on repairs and upgrades, says Blair Peberdy, a Hydro vice-president, "we've just been treading water because conditions on the grid have been worsening. Now stuff is popping up all the time. It's almost like Whac-a-Mole."

At this rate, he says, more serious or widespread power failures are inevitable. "It's not a question of if they're going to occur, it's when."

Aging work force, aging equipment

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A few hours touring the key components of the grid with Hydro workers shows why. At the Windsor station, the vintage air-blast breakers in those grey lockers, installed in 1956, are well past the end of their natural life. When a part breaks, Mr. Arruda has to cannibalize one of the spare breakers that stand like great metal insects in the station corridors. The companies that made the parts long ago went out of business.

Mr. Arruda, 51, is as much museum keeper as engineer. He has worked at the station since 1981. The only significant "new" equipment installed in all that time was a set of switchgear in yellow lockers near the station's entrance. That was in the early 1980s.

In the basement, he shows off another historical curiosity: snaking lengths of thick lead cable that bring in power from Niagara Falls and Ontario nuclear plants to keep Toronto's lights on. Many of the paper-insulated cables are spliced together with big sausage-like masses of lead that must be moulded by hand. Toronto Hydro still instructs young apprentices in this ancient art, because so much outmoded lead wiring is still in use – 1,300 kilometres worth. It too must be replaced.

Across town in the east end, mechanic Susan Green stares down into a transformer vault underneath a metal grill in the sidewalk. There are 16,200 such vaults around the city. Transformers take the high-voltage power that comes from stations such as Windsor and "step it down" to the lower voltage that flows into your house to run the toaster.

Throughout the city, old transformers are rusting in their vaults under the sidewalks. If oil leaks out and water gets in, they can burn or even explode. "Sometimes they don't go quietly," says Ms. Green.

Another big problem is what Hydro calls "underground direct buried distribution." Decades ago, when the city's suburbs were spreading, engineers started using a new kind of cable that could be buried directly in the ground without first laying ducts for it to travel through. In the early 2000s, Hydro realized the cable was corroding after years of freezing, unfreezing and being exposed to underground water.

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In suburbs like Scarborough and Etobicoke, the company is struggling to replace 1,000 km of the cable. The trouble is that, because there are no ducts, workers can't just go down manholes, pull the cable out and put new cable in. They have to dig all of it up, plowing up streets and lawns.

Overhead wires are the most visible and vulnerable part of the grid. Many are old, sagging and fraying. On College Street near Ossington, lineman Jim Cranswick points out the tufts of black insulation hanging from the old wires, making them prone to short-circuit if a branch or another wire comes in contact. Square frames of timber, a signature of the streetscape in the older parts of the city, hold aging overhead transformers. Three-quarters of overhead circuits are of this antiquated box design.

The poles themselves are often decades old. Mr. Cranswick was climbing one on a ladder three years ago when "all I heard was a snap and down I went." He broke his wrist and three ribs. It turned out that the core of the pole had gone to pulp with age.

Now, thanks to the dispute with the energy board, Hydro's renewal effort has gone into suspended animation. Mr. Cranswick was in the midst of replacing old poles and wire along College Street when the stop-work order came in from Hydro's art deco headquarters on Carlton near Yonge this month. "We were all gung-ho" to finish the project, he says. Now his construction crew has been put on ordinary maintenance, waiting, like many Hydro workers, to see whether money will start flowing again to fix the city's superannuated power grid.

THE BATTLE FOR RENEWAL REVENUE

It isn't always easy being a monopoly. When Toronto Hydro wants to invest in upgrading its aging equipment, it can't simply raise the price it charges customers, as a private company in an open market might do. Nor can it go to city council to approve an increase in rates, as the city water department did in November, 2011, when it asked for (and got) hikes of 9 per cent a year to cover the cost of replacing aging pipes.

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As a regulated monopoly, Hydro must run everything past the Ontario Energy Board, which oversees the electricity and natural-gas sectors for the provincial government. Usually, those applications are dry affairs featuring thick briefing books and reams of statistics. This time, the rate-setting process has turned into a battle royale.

Hydro says it is being hobbled by the board's decision to deny the utility a special rate increase to pay for overdue system upgrades. The increase would have allowed the utility to spend about $500-million a year on renewal for the next three years. Without that money, Hydro says it must go into what chief executive Anthony Haines calls "survival mode," halting most long-term spending.

Critics call that scaremongering. Consumers groups note that the energy board found that Hydro's claim of a crumbling electrical system was "not sufficiently credible." The OEB itself says it approved capital spending of $350-million in 2010 and $378-million in 2011 and that Hydro can apply to spend even more under what it calls an Incremental Capital Module, an allowance for special circumstances. In a final swat at Hydro, the board found that its rates are the highest in Ontario while its spending per customer was among the poorest.

Hydro responds that with its high-rise downtown core, its electric-powered streetcars and subway, its power-gobbling hospitals and its sprawling suburbs, Toronto simply can't be compared to Guelph or Kingston. It has special work-force problems too: the average age of its workers is 55. Many will soon retire, so Hydro must spend heavily to train up new recruits.

In a letter to the energy board last week, Hydro chair Clare Copeland said that the utility would be asking the board to review its ruling. The battle continues.