Some interesting history (briefly):
When the electricity system was set up in Ontario in the early 1900's, it was designed to provide "power at cost" to the people of Ontario, but remain out of the hands of the government. Kind of like a big co-op. This was a very important ideology of Adam Beck, the architect of Ontario's power system who did not want to see politicians meddle with the system. The government, of course, regulated the utility just as they would and do for other natural monopolies such as telephone and gas.
Over time, this "regulation" took the form of manipulating spending for political reasons, and every Party had a part in this heavy-handed regulation over the years. This, and keeping rates artificially low for many years led to the sector racking up a very large debt.
When the Harris government decided to "de-regulate" the sector in the late '90s the first thing they had to do was expropriate Ontario Hydro and all of the local municipal utilities. They split Ontario Hydro up into 5 successor companies (including Hydro One), set most of them up as incorporated businesses and assigned the shares to themselves. They also set the local utility commissions up as incorporated businesses and "gave" them to the municipalities they served in exchange/compensation for other former provincial services that the government "downloaded" to the cities and towns at the time. The deal was that the municipality could sell their shares or hold on to the utility and earn a rate of return from it (gone was the original concept of "power at cost"). Most Ontario utilities are owned by the local municipality, but some are privately held and some are public/private ventures.
So today, Hydro One and the local electric utilities earn a rate of return for the shareholder (whoever that may be) which is regulated by the Ontario Energy Board (who does the same thing for the gas utilities like Enbridge and Union Gas). The OEB also regulates the rates electric and gas utilities charge, and the rate setting process is blind to who the shareholder(s) might be.
So selling Hydro One should have no impact on the rates they charge consumers. I can't see any mechanism where ownership would have any bearing on rates. Many of the privately held Ontario utilities already have lower rates than their municipally or provincially owned counterparts. On the other hand, the province does lose out on the revenue stream by selling shares. I believe the province wants to reduce it's ownership stake to 40% meaning they would earn about 40% of what they currently do. They'll take the cash, blow it like governments do, then likely have to raise taxes to make up for the lost revenue stream.
