Mining Power Issues

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Premier Kathleen Wynne and past premier Dalton McGuinty were so full of it in their testimony about the Liberals’ gas plant fiasco, that some final observations on their absurd arguments are warranted.

First was Wynne’s statement the government needs to develop better ways of listening to communities when it comes to locating gas plants, and McGuinty’s claim he cancelled the Oakville and Mississauga plants because he listened to local health and safety concerns.

In the real world, if McGuinty and Wynne gave a fig about community concerns, they wouldn’t have rammed industrial wind turbines down the throats of rural Ontarians, while taking away the rights of local municipalities to have any say on the issue.

McGuinty’s hypocrisy is particularly astounding, given that he called anyone who objected to industrial wind turbines a “nimby”, unless they were doing so for legitimate safety and environmental reasons, all of which his government rejected as invalid.

In fact, people claiming adverse health symptoms caused by noise and low-level vibrations from wind turbines were told by the Liberal government they were the only ones complaining, when in actuality hundreds of complaints were pouring in from across the province.

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Premier Dad was in vintage form.

Testifying about the expensive cancellation of gas-fired power plants, Dalton McGuinty offered his old chestnut about it never being too late to make the right decision. He spoke of government officials as “people with all their noble strengths and human frailties.” He cited advice that his mother gave him on his wedding day. Recalling his prorogation of the Ontario Legislature as a necessary “time out” that would allow everyone to “cool down,” he stopped just short of reaching across the table and patting opposition MPPs on the head.

It was an assured performance before the legislature’s justice committee, and a reminder of the political skills that allowed Mr. McGuinty to spend nearly a decade in his province’s top job. It was also a reminder of why he finally wore out his welcome.

Looking less jittery than Kathleen Wynne a week earlier, Mr. McGuinty did his best to absolve his successor of responsibility by reiterating she hadn’t been in the loop on the cancellations. For that, and for avoiding making much other news about the controversy, his fellow Liberals were surely grateful.

Where he was less successful was in defaulting to a familiar father-knows-best defence of his policy choices – one that rang hollow because the cancellations stand as the best evidence of him allowing his own interests to overtake his concern for those of the public.

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The Ontario Liberals are currently under fire for grossly underestimating, willfully or in blissful ignorance, the cost of relocating two gas-fired power plants — one in the lead-up to the last provincial election campaign and the other in the thick of it. It was $190-million for the plant in Mississauga and $40-million for the one in Oakville, the Liberals said once; as of this week a combined figure in the neighbourhood of $600-million is in play.

Goodness knows they deserve the beating they’re getting over this. The only caveat I would add is that spending $230-million in public funds to shore up a party’s chances in a few ridings is no more defensible than spending $600-million. It’s like the old joke about prostitutes: We’ve established what the Liberals are. Now we’re just haggling over the price.

That said, the ultimate cost of this fiasco is relevant — at least I dearly hope it is — because people seem to draw a distinction between corruption that takes place behind closed doors, or is clearly illegal, and corruption that takes place out in the open where everyone can see it. (I almost find the latter more appalling; it’s like Dalton McGuinty smiling at you and patting your head — “good citizen; such a pretty Ontarian” — as he steals your wallet and tosses it to his campaign team. But clearly mine is a minority view.)

But there must be some level of expenditure so obscene, so grotesque, at which even quiescent Ontarians would rise up in fury at the Liberals’ actions, even if they see them as merely an extreme form of politics-as-usual. If it wasn’t $40-million or $190-million or $300-million, is it perhaps half a billion? The full billion? Two? Surely we must be approaching that level of waste, if we’re not there yet.

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Ross R. McKitrick is a Professor of Economics at the University of Guelph, a Senior Fellow at the Fraser Institute and author of Environmental and Economic Consequences of Ontario’s Green Energy Act. Kenneth P. Green is Senior Director, Energy and Natural Resources at the Fraser Institute.

The province could soon top North America in electricity costs

In 2009 the Ontario government passed the Green Energy Act (GEA), with the aim of increasing the province’s use of renewable energy such as wind and solar power, biofuels, and small-scale hydro. The centerpiece of the Act is a schedule of subsidized electricity purchase contracts – called Feed-in-Tariffs – that provide long-term guarantees of above-market rates for power generated by those renewables.

The GEA may have been well-intended but a recent Fraser Institute analysis, called The Environmental and Economic Consequences of Ontario’s Green Energy Act, demonstrates that it is driving up Ontario’s energy costs and poses a threat to economic competitiveness for the manufacturing and mining sectors. What little environmental benefit it is expected to generate could have been achieved at a fraction of the cost. Unless the province changes course, the GEA will saddle Ontarians with needlessly high energy costs for decades to come.

As our study demonstrates, the GEA will soon put the province at or near the top of North American electricity costs.

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Kathleen Wynne insists that she didn’t know.

For 90 minutes, minus the time she was deftly addressing the muffin-soft questions lovingly served up by Liberal members of the Standing Committee on Justice Policy, the Premier said in many different ways that she was no more aware of the true cost to the Ontario public of cancelling two gas-plant projects — a number that keeps being ratcheted higher, and went from $315-million to $585-million on Tuesday alone — than was the Ontario public.

When the plants were killed, did she, as a member of the Liberal cabinet, have any idea of the scope of the resultant costs?

“I didn’t have access to any of those numbers,” she said. Did she, as a vice-chair of the Dalton McGuinty-led re-election bid in 2011, realize the dollars that were involved in cancelling the Mississauga plant in the middle of the campaign?

“I was not part of the strategy discussions around that decision,” she said. Why did the Liberals continue to cite figures of $190-million to cancel and relocate the Mississauga plant, and $40-million to do the same with the Oakville facility, even as critics, media and analysts said the numbers would easily be much, much higher?

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TORONTO — Out of sight, out of mind. That’s the only way to explain the complacency urban residents have for the desecration of rural Ontario.

Politicians from small towns across the province came to Queen’s Park Thursday demanding the Kathleen Wynne government return decision-making to the local councils.

Huron-Bruce MPP Lisa Thompson brought a private member’s bill that would counter the Green Energy Act, which stripped local politicians of any say in the siting of wind and solar farms in their communities.

She says such projects are forcing up the cost of electricity and causing job losses in the manufacturing sector. Thompson says companies in her riding are struggling to pay their soaring hydro costs.

One auto parts company, West Cast Industries, told her they’ve had an extra $5 million added to their bill over the past nine months by way of the so-called global adjustment to pay for green energy. Those staggering costs are forcing companies to move to places where electricity is cheaper.

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High wind and solar costs hurt consumers as well as the environment

In May, 2009, Energy Minister George Smitherman oversaw the enactment of his Green Energy and Green Economy Act (GEA). It required that Ontario electricity consumers pay high prices for certain kinds of renewable power, including 13.5 cents/kWh for wind and up to 80.2 cents for small rooftop solar. Four years later Ontarians are asking if they can afford such big premiums for renewable power over the 8 cent cost of existing power.

As an environmentalist and past Director of the Sierra Club of Ontario, I like renewable power. As an electricity consumer I don’t want to pay too much. As an economist, environmentalist and consumer I believe that we should pay more for renewable power but the premium should not exceed the value of the avoided environmental and health effects plus the value of the avoided greenhouse gas damage from fossil power displaced.

Since Ontario is phasing out coal by the end of 2014, renewable power will mostly displace natural gas, which burns quite cleanly — its effects are very small, worth less than 1 cent per kWh. How much do we want to pay to reduce greenhouse gases? In my work I use $25/tonne of CO2 as a low estimate and $100/tonne as a high estimate based on studies of the future damage from global warming. These yield a total health, environmental and CO2 saving between 1.1 cents/kWh and 4.5 cents/kWh. This is the premium we could pay for clean electricity.

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