03/11/2013 12:05 EDT | Updated 05/11/2013 05:12 EDT

Hydro rate hike needed to fix aging equipment, utility says

An electrical switch failure that left thousands in Toronto's east end without power for as long as 30 hours may become more common, as the city's infrastructure ages and upgrades lag behind, a Toronto Hydro spokesman says.

The city utility is asking the Ontario Energy Board for $1.4 billion over the next three years which translates into a rate hike of about $2 monthly on each residential bill, said Blair Peberdy, Toronto Hydro's vice-president of communications.

"Electricity infrastructure was largely built in the 50s, 60s and 70s, and the useful life of this equipment is, as a rule of thumb, around 30 years," he said Monday on CBC Radio’s Metro Morning.

"So there has been a significant underinvestment in this grid and it's certainly needs to be addressed... It's a cost that we can't avoid and I think the longer we wait, the more expensive it's going to be. "

The latest widespread outage hit on the weekend, leaving thousands in the city's east end without power for hours.

Thousands affected in Thorncliffe neighbourhood

On 3 p.m. Friday, electricity cut out near Don Mills Road and Eglinton Avenue East, affecting at least 20 apartment buildings in the densely populated Thorncliffe neighbourhood.

A switchgear — which enables the utility to control the flow of electricity — failed and required major repairs to fix it, said Peberdy. After up to 30 hours without power for some residents, electricity was restored to all buildings early Sunday morning, he said.

It was unclear exactly how many people were affected by the outage, but it was in the "thousands at least," Peberdy told Metro Morning host Matt Galloway.

"Considering the disruption in the neighbourhood to traffic and everything else, these failures in an urban city certainly do have a great impact on people," he said.

Peberdy said these problems, stemming from aging equipment, are a "very common problem in Toronto" and across Canada.

Rate hike necessary: Toronto Hydro

All parts of the grid are aging, from switchgears to cables and transformers, he said.

"Now is the time, I think, to put some money into the nuts and bolts of the grid," Peberdy said.

The issue, however, is how to pay for the hefty cost of revamping the existing system after years of underinvesting in it, he said.

He says the only way to pay for the $1.4 billion the utility needs in the coming years is to get the end users to chip in.

Distribution rates at Toronto Hydro hasn't increased over the last five or six years, he said.

"I think it's really [the] only one way to do it, it's through the rates that are charged by the utilities to pay for this infrastructure. And, the key of course, is how fast do we do it? How much ... can we do at a time to keep it affordable?" Peberdy said.

"And, that's a discussion that we're having before the energy board now, the energy board is weighing it very, very carefully. But I don't think we can avoid it."