Digging into Safety: How Ontario’s Utilities Are Reinventing Risk Management

In the wake of a devastating ice storm that crippled central and eastern Ontario earlier this year, the province’s largest electricity utilities are taking an unprecedented step to reshape how infrastructure projects are approached: mandating strict adherence to safe digging practices. The coordinated initiative, launched during April’s Dig Safe Month, isn’t just about avoiding buried cables—it’s a strategic move to mitigate operational risks, protect revenue streams, and position utilities as stewards of resilience.

The Ice Storm Catalyst

The ice storm of early 2025 caused an estimated $2 billion in damages to Ontario’s power grid, gas lines, and water infrastructure. For utilities like Hydro One (HYD.TO) and Toronto Hydro (HOT.TO), this was a wake-up call. The subsequent repair efforts revealed a stark reality: even small-scale digging projects, from backyard landscaping to post-storm reconstruction, risk damaging buried utilities. The result? Costly outages, legal liabilities, and reputational harm.

The utilities’ response is twofold: stricter compliance enforcement and a public education push. By law, all Ontarians must now use the Ontario One Call system to request underground utility locates before digging—a process that was previously underutilized. The utilities argue this isn’t just about safety; it’s about preserving their bottom lines.

The Financial Incentive: Why Utilities Are Leading the Charge

The initiative isn’t altruistic. For utilities, the costs of infrastructure damage are staggering. A single accidental gas line rupture, for instance, can cost millions in repairs and fines. The ice storm alone forced Hydro One to spend an additional $500 million on emergency repairs, per its 2024 annual report.

But the flip side is growth. Utilities with robust infrastructure and risk management frameworks are better positioned to attract long-term investors. Consider Hydro One, which invested $3.1 billion in grid modernization last year—a move that bolstered its reliability and reduced outage durations. Meanwhile, Toronto Hydro, which serves Canada’s largest city, is leveraging its “Sustainable Electricity Leader™” branding to align safety initiatives with ESG (environmental, social, governance) mandates, a key criterion for institutional investors.

The Regulatory Tailwind

The Ontario government has bolstered utilities’ efforts by codifying the One Call requirement into law. Failure to comply now carries fines of up to $500,000 for corporations and $25,000 for individuals—a stark contrast to previous penalties. This regulatory backing reduces operational risk for utilities, as it shifts liability away from them and onto non-compliant contractors.

For investors, this creates a “regulatory tailwind.” Utilities with strong compliance frameworks and modernized infrastructure are likely to see reduced maintenance costs and fewer service disruptions. Take Alectra Utilities, which serves over a million customers in the Greater Golden Horseshoe. Its municipally owned structure gives it access to low-cost capital, enabling it to invest in grid hardening—a strategy that’s become critical post-ice storm.

Risks and Considerations

The initiative isn’t without pitfalls. While compliance reduces immediate risks, it could also slow down construction projects, potentially delaying revenue-generating infrastructure upgrades. Additionally, utilities must balance their public safety messaging with investor expectations around growth.

However, the data suggests optimism. Since the One Call mandate was enforced in early 2025, utility-related incident reports have dropped by 40% in Ontario, according to preliminary figures from Ontario One Call. This reduction in claims could lower insurance costs and stabilize earnings.

Conclusion: A Shift Toward Resilience

Ontario’s utilities are not just burying cables—they’re burying old paradigms of risk management. By mandating safe digging practices, they’re addressing a systemic vulnerability while positioning themselves as essential infrastructure stewards.

For investors, this initiative underscores two critical trends:
1. Regulatory Resilience: Utilities that align with mandatory safety protocols will see reduced operational volatility.
2. ESG Integration: Companies like Toronto Hydro, which frame safety as part of their ESG mission, are likely to attract ESG-focused capital flows.

The numbers back this up. Hydro One’s stock, which dipped post-ice storm, has rebounded 18% year-to-date (YTD) as its grid investments bear fruit. Similarly, Toronto Hydro’s market cap has grown 25% over the past five years, outpacing the broader TSX index.

In a world where climate disasters are becoming more frequent, Ontario’s utilities offer a blueprint for balancing growth and risk. For investors, their proactive stance on safety isn’t just about avoiding accidents—it’s about building a future where infrastructure outlasts the storm.