Mining Power Issues

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TORONTO – What a wretched, wasteful, deceitful government this is. This week we got the full accounting for the disgraceful way the Liberals scrapped the Mississauga gas-fired generating plant in the heat of the 2011 election.

It was not the $190 million they consistently told us it would be. Auditor general Jim McCarter revealed Monday the bill for that piece of Liberal incompetence is $275 million.

This was a decision taken by the Liberal campaign team so, as Tory Frank Klees asked in the legislature Tuesday, why isn’t the Ontario Liberal Party on the hook for the bill?

“Given that it was a Liberal Party decision to incur $275 million of costs, will the premier agree that it’s the Liberal Party of Ontario that should pay that money?” Klees asked.

It’s about time also we put to an end this nonsense that it was something all parties agreed to do. It was a Liberal decision to build the two plants in Oakville and Mississauga. They picked the locations. It was a Liberal decision to cancel them. You can’t blame the two opposition parties for fixing the Liberals’ mistakes.

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The real gas plant scandal in Ontario was our own wooly thinking — a highly charged blend of NIMBYism and ideological myopia.

Now that the auditor general has exposed the stench over the cancelled gas plant in Mississauga, Ontarians have every right to be angry. Let me count the ways:

Angry at the Liberals for overplaying their hand at election time — and downplaying the total $275 million cost until they were caught out.

Angry at the fledgling local contractor who constantly under-delivered on the stalled electricity project — yet overstated its costs when extorting more money from taxpayers.

Angry at the U.S. hedge fund that overcharged with an astonishing 14 per cent interest rate — then aggressively litigated when it had taxpayers trapped. Angry at the Ontario Power Authority for overestimating our electricity needs all along — then overpaying to dig the government out of a hole.

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TORONTO – How stupid are they? And what fools are we to buy their baloney by the pound? I’m talking of the Liberals and their outrageous decision to pull the plug on construction of the Mississauga power plant in the middle of the 2011 election.

Auditor general Jim McCarter produced a scathing report on the deal Monday. At the end of the day, he said, we’ll have built two power plants — and we may not even need one, since power needs have dropped since 2009.

It’s also clear the government has been lying through its teeth over the cost of scrapping the plant. The Liberals promised all along the cost would be $190 million. Now we find the true cost — $275 million.

McCarter’s detailed calculations show that lowball figure didn’t include costs such as the extra tab for delivering electricity to Mississauga from Lambton, near Sarnia.

The Liberals botched the deal at every turn, with side deals and trade-offs that gave away the store to Eastern Power, the parent of Greenfield, the company that built the plant. There were potential savings in the move to Lambton. The Dawn Hub gas storage plant is close to Sarnia, so there are savings in not having to bring the gas to Mississauga.

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TORONTO — It was eight years ago when the government trumpeted its latest additions to the electricity supply.

In a press release from then-energy minister Dwight Duncan, the government announced two gas-fired plants for Mississauga that would, combined, supply 560 megawatts of “reliable, efficient power.”

The two projects, Greenfield North and Greenfield South have proved anything but reliable or efficient. Greenfield South was scrapped in the middle of the 2011 election campaign that saw Dalton McGuinty’s Liberals lose a large number of seats and squeezed to a minority.

It was the second time the Liberals had pulled the plug on a power plant. The previous year, they scrapped a plant under construction in Oakville. Again, political pressure was brought to bear on the Liberals.

On Monday, provincial auditor general Jim McCarter will release his report on the costs of scrapping the Mississauga plant.

In its press release announcing the plants, the government said they would provide power to replace coal-fired electricity and keep the lights on in the high-growth western part of the GTA.

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TORONTO — Wind blows — and so sadly does the Liberal government’s Green Energy Act. Even before the Fraser Institute came out with its damning report on wind and solar energy this week, the writing was on the wall.

Turbines have wreaked havoc on rural Ontario, ruining the countryside, pitting neighbour against neighbour as wind farms sprouted on once lovely fields.

We’ve gone from generating the cheapest electricity in the world to the most expensive in North America. The report, Environmental and Economic Consequences of Ontario’s Green Energy Act (GEA) authored by Ross McKitrick, recalls provincial auditor general Jim McCarter’s scathing 2011 report in which he said the province has already lost $2 billion in electricity exports because power generated by wind often has to be exported at a loss.

“Eighty percent of Ontario’s generation of electricity from wind power occurs at times and seasons so far out of phase with demand that the entire output is surplus and is exported at a substantial loss,” the report says. “Data from the Independent Electricity System Operator shows Ontario now loses, on average, $24,000 per operating hour on such sales, totalling $200 million annually.”

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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.

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Last weekend, the Mowat Centre for Policy Innovation at the University of Toronto began releasing glimpses into a new study it has completed on how badly Ontario is being jobbed by Confederation. Ontarians send about $11 billion more to Ottawa each year than the province gets back in federal spending and transfers. This discrepancy the Mowat Centre refers to as the “fiscal gap.”

I’ve got news for you, Ontario: When it comes to being jobbed by Confederation, you’ve got nothing on Alberta.

Last year Mowat calculated that Albertans sent a similar amount more to Ottawa than the province received in return — and Alberta has one-quarter of Ontario’s population.

But the issue here is the folly of Canada’s vast system of interprovincial wealth transfers called equalization. When even Ontario begins whining that it deserves billions more in equalization, you know the system has become so dysfunctional that the best action would just be to dismantle the whole scheme.

Yes, Ontario has recently fallen on semi-hard times. It has unemployment higher than the national average and less economic growth. Its costs to provide public services are higher than the Canadian average while its ability to raise tax revenues is lower.

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Liberal Bob Chiarelli, Ontario’s new energy minister, has at least levelled with the public: The government really has no idea how much cancelling the Oakville gas power plant will cost. That’s not much of a statement, but given the evasions and outright denials we’ve heard previously, this actually marks some progress.

Oakville is a lovely city on the western edge of the Greater Toronto Area. It was also slated to be home to a new gas-fired powerplant under a plan developed, and repeatedly and strenuously championed, by former premier Dalton McGuinty. The plant would have provided relatively clean electricity to the Toronto area, which has surged in population in recent decades, with no let up in sight. But it was deeply unpopular with the local population, and threatened the Liberals’ hold on the riding.

Ahead of the 2011 election, when polls showed the Progressive Conservatives had a got shot at winning, the Liberals suddenly announced that they were cancelling plans to build the plant (as well as another in nearby Mississauga, another Toronto suburb where local opposition to the plant was strong, for an estimated $190-million).

It worked. The Liberals held both seats, and secured a minority government. But the whole affair stunk something awful, and since the election, senior Liberals — up to and including Premier Kathleen Wynne — have acknowledged that the decision to scrap the plants was not policy decision, but a political one.

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Among the many unanswered questions about the Liberals’ decision to cancel two natural gas plants leading up to the 2011 Ontario election, a key one involves Premier Kathleen Wynne.

Wynne, has described the Liberals’ decision to cancel the two unpopular projects in Oakville and Mississauga as a “political” one, meaning it was done to save a handful of Liberal seats in that election. Indeed, Wynne has been emphatic on this point.

As she put it last month: “I have never said this wasn’t a political decision. It was a political decision.” Wynne has also said she wasn’t involved in any decisions or meetings to cancel the Oakville plant in 2010, or the Mississauga plant just two weeks before the Oct. 6, 2011 election, in which she served as the Liberals’ campaign co-chair.

“I was part of the campaign team, but I was not in any of those meetings,” Wynne said.

Given all that, our question is, how is it possible that the Liberals’ campaign co-chair wasn’t involved in a political decision two weeks before the 2011 election to cancel the Mississauga plant, in order to save the political hides of some Liberal MPPs?

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