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Sousa Debt and the DRC

Excellent Short Commentary by Scott Luft outlining Ontario current electricity sector debt situation. “DRC = Deceitful Recurring Charge.
There is no Stranded Debt, there is only Sousa Debt.”

Colder Air

Ontario’s finance minister, Charles Sousa, delivered a budget yesterday, and within that document described the current electricity sector debt situation:

Ontario Electricity Financial Corporation (OEFC) estimated results for 2015–16 show an estimated excess of revenue over expense of more than $3 billion, which would reduce OEFC’s unfunded liability (or “stranded debt of the electricity sector”) from $8.2 billion as of March 31, 2015, to below $5 billion as of March 31, 2016. This would be the twelfth consecutive year of stranded debt reduction.

For those that haven’t been following the Wynne government’s raid of electricity assets, a quick refresher is in order.

Ancient history: Ontario broke up it’s “power at cost” utility in 1998, revaluing assets and creating a “stranded debt” along with a corporation to oversee them with tools developed specifically to address the RSD. These tools included payments in lieu of taxes (PIL) from the electricity sector, the…

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