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The handy thing about the Ontario Liberals’ spectacular mishandling of the energy file, as an example of poor governance, is that there is really something for everyone.
A shameless political decision that came with a significant cost to the treasury? Hello, gas-plant cancellations.
A deliberate attempt to obscure the cost of those decisions by releasing only partial numbers? Testimony before the justice committee this week has shown the Liberals knew the $40-million cost of the Oakville cancellation that the former energy minister had insisted was the only true cost, in fact, referred only to sunk costs, and that the final bill would actually be much higher.
A punitive impact on taxpayers? The Ontario Energy Board announced last week that electricity rates will rise again on May 1, continuing a trend in which residential rates are expected to double over a 10-year period.
And, at the root of it all is the 2009 Green Energy Act, one of the signature policies of the McGuinty government, which comes in for quite a drubbing in a study from the Fraser Institute that will be released on Thursday.
The study, Consequences of Ontario’s Green Energy Act, doesn’t contain much that is new or unexpected to anyone who had paid close attention to the subject in recent years, but it lays out some key evidence about a policy decision that was designed to improve air quality while also fostering the creation of a “green jobs” economy.
Specifically, the paper argues that air quality was already on a long-term trend of improvement since the 1960s, that closing coal-fired plants would have only a negligible effect on air-quality in the province, that the coal plants could have been retrofitted at a tiny fraction of the cost of the push toward renewables and that, as more and more inefficient wind projects are added to the grid, the cost of the system will ultimately have serious negative impacts on Ontario’s manufacturing and natural-resource sectors.
Put another way, the report argues that Ontario decided to solve a problem that didn’t need solving, and at a considerable cost that will continue to grow over the long term.
The study’s strongest section is its examination of the foolish economic underpinning of the GEA. Because wind power tends to be produced at times when it is least needed, the province is actually paying a mandated premium for power that it then has to dump to other jurisdictions.
For the rest of this article, click here: http://fullcomment.nationalpost.com/2013/04/11/ontario-green-energy-act/