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Not long ago, a provincial premier championed the sale of a utility, in part to raise the money needed to build a better electrical grid and kickstart economic growth.

The premier was Newfoundland's Joey Smallwood, the year was 1949 and the utility is now known as Fortis Inc. From humble roots bringing power to remote fishing ports, St. John's-based Fortis grew into a North American leader in natural gas and electrical distribution, with $48-billion in assets.

More recently, Ontario Premier Kathleen Wynne embraced privatization, putting $9-billion in provincial coffers by selling a majority stake in Hydro One Ltd., which borrowed a page from the Fortis playbook this week by dropping $4.4-billion on a U.S. acquisition.

In Mr. Smallwood and Ms. Wynne, the rest of the premiers have role models to consider as they contemplate the essential but increasingly expensive issues that come with trying to power a province. At Fortis, and now at Hydro One, private-sector investors are stepping up to solve a critical public problem: They are putting up the cash needed to keep the lights on.

Glance at a map of Canada and you see both the opportunity and challenge that come when trying to pump more reliable, renewable power into the grid. There are rivers suited to massive hydroelectric plants, but most sites are far from the population centres that need the juice.

That dynamic means Manitoba Hydro will drop $6.5-billion to develop the Keeyask hydro project near Hudson Bay, then spend another $4.7-billion on transmission lines that will carry the power to cities in the south. At Hydro-Québec, they are budgeting $13.3-billion over the next four years for projects that include the government's Plan Nord developments, located half a province away from the bulk of the utility's consumers. And BC Hydro, along with the province's newly installed NDP government, are deep into development of the $8.8-billion Site C facility on the Peace River, a 14-hour drive from Vancouver.

At these government-owned utilities, the money to pay for megaprojects comes from customers, public funds or debt markets. And development decisions can be driven by political forces, while development risk is shouldered by taxpayers.

In contrast, utilities such as Fortis and Hydro One tap public markets to pay for projects. Investors have consistently shown they will commit capital for growth, by stepping up to buy securities when deals are announced. If these projects don't work out – if Fortis or Hydro One stumble as they move into new regions – shareholders will take the hit, rather than the utility's customers or taxpayers.

Privatization of Crown-owned utilities is politically charged, and not undertaken lightly. Selling off Hydro One has been part of a bruising experience on the energy file for Ms. Wynne and Ontario's Liberals. But for a premier and provincial cabinet, a difficult task is not one to avoid. The scale of spending needed to bring new generation and transmission projects on line in the next decade will demand private-sector participation.

A handful of government-owned utilities are already tapping private capital to bulk up. In Mississauga and Toronto's western suburbs, electricity comes from Alectra Utilities, jointly owned by municipal governments and a unit of the OMERS pension fund. The same approach is being rolled out at the federal Liberals' planned $35-billion infrastructure bank. The idea is to match up deep-pocketed institutions with commercially viable, greenfield public projects.

Mr. Smallwood took a leap of faith by selling shares in Newfoundland Light & Power Co. to the public. He would be justifiably proud of Fortis, the company he helped create. The same potential can now be found at government-owned utilities across the country.

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