TORONTO - Cutting industrial hydro rates by at least 15 per cent and reining in salaries and inefficiencies at Ontario's power agencies would provide a badly needed boost to the province's flagging manufacturing sector, New Democrat Leader Howard Hampton said Thursday.

The all-in cost of industrial electricity in Ontario would be no higher than $55 a megawatt hour -- $10 less than the current rate -- if he were elected premier in the Oct. 10 election, Hampton told a news conference in Hamilton -- a city that has endured significant manufacturing job losses of late.

Manufacturing companies in sectors like steel, auto parts and forestry would be eligible for the lower rate at the start of next year and would have the price locked in for five years, he said.

Those businesses would be required to guarantee jobs and meet energy-efficiency targets, but Hampton said he doesn't think getting those commitments would be a problem.

"I've met with people in the forest sector, the steel sector, and the auto parts sector and many of them would be quite prepared to sit down and negotiate,'' he said.

"A lot of companies want to stay in Ontario. They want to continue to manufacture and produce here, but the tools to do that just aren't there.''

Hampton said the lower rates wouldn't lead to higher bills for non-commercial users because he would limit the salaries and profits at Hydro One and Ontario Power Generation to make up the difference.

He also said costs have risen more than 50 per cent since hydro deregulation and he would look at combining some of the hydro services.

"There's absolutely no reason why we should be paying hydro executives $1 million plus, $2 million plus when the head of Hydro Quebec is paid $500,000 and when the heads of Manitoba Hydro, Saskatchewan Power, and B.C. Hydro are paid even less than that,'' he said.

"For starters we would consolidate Hydro One, the Independent Electricity System Operator and the Ontario Power Authority because there's a great deal of duplication of work and duplication of effort in those three agencies.''

Tom Adams of utility watchdog Energy Probe said trying to undo deregulation and cutting salaries would not save enough money to help lower industrial rates and would almost definitely lead to higher bills for homeowners.

"If you add up all the executive salaries across the entire power system it adds up to a very, very tiny amount on your overall power bill -- executive salaries are way less than one per cent,'' Adams said.

"If rates are going to go down for one class of customers they'll have to go up for another class of customers.''

While Hydro One had profits of $455 million in 2006, and Ontario Power Generation made $490 million, that revenue ends up benefiting ratepayers by paying off existing debt and building hydro projects, said Steve Erwin, press secretary for Energy Minister Dwight Duncan.

"It's quite unclear how the NDP would cover the cost of its proposed rate cut, unless it meant scaling back on important energy projects in the province which are funded by agency profits,'' Erwin said.

Ontario's wholesale rates are also in line with other jurisdictions like New York, Pennsylvania and Michigan, Erwin said, while some companies are already paying less thanks to government rebates.

Companies including Bowater, Tembec and St. Mary's Paper are already paying rates in the mid-to-high $40 range per megawatt hour because of a rebate program for northern Ontario pulp and paper companies.

Paul Clipsham, director of policy for the Ontario division of the Canadian Manufacturers and Exporters, said the association is generally supportive of any initiative to help the sector compete -- although he questioned whether the NDP's policy would be popular with businesses.

He doubted that many companies would want to lock into a five-year contract or absolutely guarantee jobs.

"I don't think that's the best approach to take and I don't know if that would be very appealing,'' he said.

"To try to guarantee those jobs over that five-year period is challenging, especially when you've got plants that are closing their doors. I think the approach is questionable.''