How much is the debt and how long must we continue to pay the debt retirement charge (DRC)?
In the years prior to restructuring in 1999, Ontario Hydro had borrowed money to build new generation plants and expand transmission and distribution networks. The interest and principal on this debt was to be paid by the revenues earned from the sale of electricity. The total amount of the debt left by the former Ontario Hydro, including other liabilities, was $38.1 billion. Of that total, $17.2 billion was assigned to Ontario Hydro’s successor companies – Hydro One and Ontario Power Generation (OPG). The remaining $20.9 billion was defined as ‘stranded’ debt. This amount was later reduced by $1.5 billion through the transfer of other assets. Responsibility for managing the stranded debt was assigned to the Ontario Electricity Financial Corporation (OEFC). Part of the net income of OPG and Hydro One goes toward paying the debt, as do payments in lieu of taxes by OPG, Hydro One and local distribution companies. On April 1, 1999, the stranded debt amounted to just over $19.4 billion. Ac
