Thursday, October 18, 2007

An opportunity in hand is worth two in council

News that Chatham-Kent Energy has opened bidding on city-owned London Hydro with a $245 million offer through a public letter to Mayor Anne-Marie DeCicco-Best (PDF) will touch off concerns in some quarters over the loss of local public ownership or control of an essential utility — Controller Gina Barber unsuccessfully urged Board of Control to reject even considering a sale. But when control of the utility by a public that is generally disinterested in its operations except to quietly receive service without intrusion or undue notice is limited to the election once every four years of a council that in any case directs itself and city staff to act almost strictly as a disinterested stakeholder to an independent London Hydro executive, neither control nor ownership suggests itself as any inherent benefit to the public. The hands-off approach of council and staff to the utility minimizes politicization of its operations, which should be considered a plus for service provision except by the most hard-core of municipal-level nationalists. Would Londoners notice a difference in service or value from another publicly-owned utility, or a privately-owned one for that matter? Not likely, and no suggestions to the contrary are really ever made except for appealing to worn emotional clichés about public ownership. The value to the public, however, of public ownership is usually always only symbolic, and in the case of a utility on whose operations the public has no influence or impact except as a customer, it is strictly so. And when the representation of the symbol is London's council, it's a decidedly weak symbol to begin with.

The prime consideration for council should be whether taxpayers receive an appropriate compensation for the sale of London Hydro's assets — estimated in 2005 at $246 million. That sum, or higher, would retire a significant amount of the liabilities city hall has incurred over the past decade, but the pitfall for Londoners is that some or most of the proceeds from a sale would be used for the same kind of projects that condemned Londoners to those liabilities in the first place — performing arts center, anyone?

1 Comment:

Jake said...

I think we should sell London Hydro because the money earned from the sale would nearly wipe out the $300 debt. That would in turn free up millions in interest payments to cut taxes and fix our crumbling infrastructure. London Hydro gives the city $10 million per year in dividends while the interest fees on the debt would be more than that.

However, like you said, if they did sell it, the first thing that they will do with the profits is build a PAC. Little would go to reducing our debt load.