Ontario announces $2.3 billion expansion of grid infrastructure

Ontario's Minister of Energy and Infrastructure George Smitherman announced yesterday that Ontario will direct Hydro One to spend $2.3 billion to expand transmission and distribution infrastructure in the province over the next 3 years. The projects are intended to "unlock significant potential opportunities for greener, cleaner electricity in all parts of the province."

The announcement constitutes step 4 of the Minister's 10-step countdown of measures to help Ontario transition to an economy powered by green energy. Steps 1, 2 and 3 were announced earlier this month. The remaining 6 steps will be announced later this month.

The Minister's announcement did not mention whether the government would provide any special funding for the projects. Absent such funding, much (if not all) of the cost of the upgrades will be passed on to electricity customers. In anticipation of projects of this size and nature, the Ontario Energy Board is in the midst of a process to identify more "innovative" approaches to cost recovery for such projects.

The infrastructure upgrades are expected to create 20,000 jobs over three year. This could be viewed as a major move towards fulfilling the government's promise that the Green Energy Act would create 50,000 green collar jobs. However, it is unclear what proportion of these 20,000 jobs are jobs that will endure after construction of the grid enhancements is complete.