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A new study from the Fraser Institute reports that the average Toronto resident pays more than $200 a month for electricity, the highest in Canada. One way or another, ratepayers are funding Hydro One’s new status as an international regulated utility.

The official version of the proposed relationship between Hydro One in Toronto and its new, distant corporate sister in Spokane is tricky to decipher and somewhat contradictory.

First, the companies say ratepayers will not be hurt. “Hydro One and Avista customer rates will not be impacted by any of the costs associated with the transaction.” Furthermore, the managements of the two operating companies will remain in place.

On the other hand, the deal is expected to generate efficiencies “through enhanced scale, innovation, shared IT systems and increased purchasing power (that will) provide cost sharing opportunities.” Under regulatory frameworks, such benefits should be passed on to ratepayers, not shareholders.

Whether large cost and efficiency synergies are available remains to be seen. Maybe they’ll find a way to store Ontario’s overflow of waste electricity into little batteries and ship them by rail to Spokane. Is it really possible to generate large volume discounts on copper wire and other buying-power activities — carried out without merging managements?

The Hydro One/Avista financial deal at the top is clearly dependent on the continued monopoly regulatory regime at the bottom. A Dominion Bond Rating Service review put it clearly: “DBRS expects that the quality of the regulatory regime in Ontario will continue to remain supportive, providing the regulatory ring-fencing for the utility and allowing the company to earn a fair rate of return while covering costs on a timely basis.”