This article is about the regulation Ontario's Liberal government made on the price of electricity. The provincial government will moderate expected price increase for large power users, which is strongly supported by two major power users Inco.Ltd and Dofasco Inc. However, the new price plan implemented on April, 2005 still requires big industries to pay 12 percent more for power. The price cap put on OPG's regulated and non-regulated assets can help it earn more profit and pay down the debt left by the former Ontario Hydro. One concern of this policy is whether it will affect the enthusiasm for new investment. Duncan, the Ontario Energy Minister, was confident that this was still a good market to invest. Mike Kuriychuk, who chairs the Association of Major Power Consumer of Ontario, thought this was good news because it ensured some stability.

In my analysis, the restructuring of Ontario electricity market will have both positive and negative effects. As business consumers pay the true cost of electricity they consume, OPG can use the profit rather than subsidy from government to service the debt and recover from hydro rate freeze. From what I learned in the class, this new price system is a compromise solution between marginal-cost pricing and profit-maximizing for monopolist. It endures that power price will not be too high but help OPG be productive efficiencies and get a fair return. It's also an incentive for OPG to offer a stable and reliable supply of power in Ontario. On the other hand, as power is an essential part for running the business, it might hurt some large industrial and commercial electricity customers. For the large power users, the prices of input will be far higher than before, which could result in reduction in the supply of products. They are forced to generate their own electricity or purchase power from alternative energy marketers. Therefore, it's important for the government to create a stable and effective power price plan.