The story
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, Hydro-Québec, Minnesota Power, DTE Energy/ITC, National Grid (the former Niagara Mohawk Power) and the New York Power Authority.
Generators
Hydro One works with the transmission and distribution network by connecting generating facilities operated by Ontario Power Generation, Bruce Power, 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 system is transformed to more than 50 kV (50,000 volts). The transmission-connected generators are registered with the Independent Electricity System Operator (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'. 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. The first chairman was Adam Beck, minister without portfolio 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 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.
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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 called "Ontario Hydro", the name by which it was most usually known.
In 1998, the Progressive Conservative Party (PC) government of Mike Harris 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, the Ontario Hydro Services Company (later renamed Hydro One), the Independent Electricity Market Operator (later renamed the Independent Electricity System Operator), 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 (IPO), however by April 2002 various groups in opposition to the plan challenged the government in the Ontario Superior Court of Justice, 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, to freeze electricity prices for residential and small business consumers. This freeze was maintained after the Liberal Party of Dalton McGuinty 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 for CA$6.7 billion in cash.
In 2018, the annual CA$6.2 million compensation paid to CEO Mayo Schmidt became a campaign issue in the 2018 Ontario election. Progressive Conservative Party leader Doug Ford promised to remove Schmidt if elected, although it was speculated that it would cost CA$10.7 million 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 CA$400,000 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 CA$9 million. His annual pension was estimated as exceeding CA$160,000. 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.
From Wikipedia’s article on Hydro One, shared under CC BY-SA 4.0.7