Electricity and the Liberals Hansard History Chapter 3

This is the third chapter in a series by Parker Gallant:  Chapter 1;  Chapter 2Chapter 4Chapter 5Chapter 6Chapter 7Chapter 8

This chapter will deal with the birth of the Ontario Power Authority (OPA), a reputedly “temporary “ authority, which took place in April 2004. Before we go too deep into April however, on April 8th Howard Hampton, MPP Kenora Rainy river, kicked things off after the second reading of Bill 15, An Act to amend the Public Sector Salary Disclosure Act. Mr. Hampton had lots to say but his recital of some history about the Ontario Liberals when they sat in Opposition caught my attention. Here is what Mr. Hampton said in the Legislature that day;

Then, in October 2001, Mr McGuinty said, “Throughout Ontario’s electricity restructuring process, Dalton and the Ontario Liberals have been consistent supporters of the move to an open electricity market in Ontario.”
In December 2001, when someone named Mike Harris announced that he was going to privatize not only Ontario Power Generation but Hydro One, Mr McGuinty said, “I think that it’s important that we move ahead with competition, both in terms of generation and in terms of transmission.” In May 2002, when the deregulated market opened, Mr McGuinty said, “My party supports competition in the generation of electricity.”

While it was indeed timely of MPP Howard Hampton to remind Mr. McGuinty of his prior remarks we must assume that either Premier McGuinty was not sincere when he uttered those remarks or he simply forgot what he said. The OPA was to be a temporary agency that was given the responsibility for developing a long term energy plan or as it was subsequently named an “Integrated Power System Plan” (IPSP). Ontarians are still waiting for that “plan”.

The competitive model that the Liberals used in the construction of their energy policy can be found in the FIT and MicroFIT programs which have absolutely nothing to do with competition. The “open electricity” policy that Premier McGuinty spoke of does not allow the public to see behind the terms and conditions of the Samsung contract or any of the others that the Ontario Power Authority have signed under the numerous directives flowing from the Energy Minister’s desk. The “open electricity” policy is based on the whims of those who have the Minister’s ear and not on any rational proposal presented by the public servants required to exercise those directives. Many of those who have his ear are the graduates from York University’s Faculty of Environmental Studies. They have been very successful at soliciting grants from the Trillium Foundation which are then used to further their “green” agendas. Their agenda in my opinion included extensive lobbying efforts that led to the creation of the Electricity Restructuring Act and ultimately the Green Energy Act under Energy Minister George Smitherman.
The Liberals have not created competition nor have they privatized any parts of Hydro One or OPG. Instead they have reduced their value and mandated costly transmission builds for mainly foreign private developers to hook up above market priced wind and solar contracted generation without any tendering process. They have decimated an “electricity market” (hourly Ontario energy price or HOEP) that was in its infancy; by mandating first to the grid rights to those same wind and solar generators, thereby causing OPG to spill cheap, clean hydro and Bruce Power to steam off electricity when the wind is blowing and we have excess power. The HOEP market now consists of only the unregulated hydro and unregulated fossil (coal) generation that OPG produces-there are no other bids available to sustain the HOEP. This has cost the ratepayers of the province billions of dollars and considerably delayed repayment of the old Ontario Hydro’s “stranded debt”.
On April 15, 2004, The Minister of Energy, Dwight Duncan announced the Electricity Restructuring Act not in the Legislature but to a “private Bay Street Club” as noted by MPP Howard Hampton, during that day’s question period and he wanted to know why? The Premier, Hon Dalton McGuinty (Premier, Minister of Intergovernmental Affairs) rebutted MPP Hampton with:

“I can only say that the member must not be familiar with the contents of the announcement that was made today in the documentation by way of background or the like that was made available to everyone, because what this plan is going to do — and I would tell you that the minister has worked very hard on this.” “It is thoughtful, it is methodical, it is responsible and it will ensure that homeowners and small businesses alike can participate in a stable, predictable rate regime that will be part of a broader plan to build more generation in Ontario, to incent more conservation and to ensure that we can, over the long term, have in place a reliable, sustainable supply of clean electricity in Ontario.”

That “stable, predictable rate regime” is still a figment of the Premier’s imagination and is driving good paying jobs from the province while imposing hardship on Ontarians and creating energy poverty among many people living on fixed or low incomes as rate increases have climbed surpassing inflation by a considerable multiple.
The OPA by 2010 had grown beyond it’s temporary status and its direct budget was approximately $80 million with a futher $563.7 million budgeted for “conservation” spending. Those two budget items now find their way to the “regulatory” and “electricity” lines on our hydro bills and played a key role in raising the costs of a basic commidity and also has driven jobs from the province as noted in the Auditor General’s recent report.
A short time later on the same day in the Legislature, in rebuttal to further questioning from MPP Hampton the Premier said:

“What we intend to do is preserve the public assets through OPG and to invite the private sector to join us in creating the necessary generation. I just don’t think any objective, reasonable observer would say to OPG, “Yes, we trust you to generate the necessary 22,000 or 23,000 additional megawatts we’re going to need between now and 2020.”

Ontarians would certainly be well within their right to question whether those “public assets” of OPG have been preserved or have shrunk as OPG’s generating capacity fell from 22,777 MW at the year-end 2003 to 19,931 MW at year-end 2010 (a 12.5% drop) and the terawatts (TWh) delivered fell from 113.3 TWh to 88.6 TWh (a 22% drop). In 2003 OPG earned an average of 4.1 cents per kWh on unregulated production and in 2010 earned 4.0 cents per kWh. If OPG had delivered the same TWh in 2010 as 2003 their revenue would have been at least $1 billion higher.
Those intermittent “renewable” wind and solar private generators operating under lucrative fixed price contracts have had a direct impact on the contraction of OPG as a provider of our electricity and the 12,112,000 shareholders mentioned in Donna Cansfield’s March 31, 2004 address to the Legislature (refer Chapter 2) have seen their holdings diminish in value as a result. The price of electricity was 4.3 cents per kWh at the end of 2003. When one measures that against the current time-of-use (TOU) rates the increase in off-peak rates is 37% and for on-peak rates the increase is 151%. Those increases have not gone to OPG as they received an average of 4.7 cents a kWh in 2010 which is only 15% above what they received in 2003 and close to the level of inflation in the last 8 years. Ms. Cansfield should be asked to explain exactly why the shareholder value has decreased as a result of the Energy Restructuring Act or the Green Energy Act when she promised us that “the government, as their [sic; all Ontarians as shareholders] only proxy to keep close watch on these companies and to protect their interests,”.
If the objective of the governing Liberal Party was to protect the value of OPG and Hydro One for the benefit of all Ontarians they have failed. If the objective of the governing Liberal Party was to privatize OPG and Hydro One`s transmission and distribution business they have failed. No matter which way you view their management of the electricity sector the only success that can be attributed to the governing Liberal Party is to point to the increased price of a basic commodity as a multiple of inflation during their reign in power.
Parker Gallant,
December 3, 2011

Electricity and the Liberals’ Hansard History: Chapter 1

This is the first article in a series by Parker Gallant: Chapter 2Chapter 3; Chapter 4Chapter 5Chapter 6Chapter 7Chapter 8

That the Liberals blamed the Harris-Eves government for the 2003 electricity blackout in Ontario is history as is their constant claim that they have fixed what they perceived as a broken and neglected electricity sector. After 8 years in power however, it may be time to review the Liberal track record to determine if they have changed it for the better. To examine their success or failure we should travel back to early 2004 shortly after they came to power and visit Hansard Ontario where the Liberal visions are eloquently spelled out. This is the first chapter of that history and the legacy they will leave our children.

For the first visit we will go to March 22, 2004 and this salvo fired by: Mrs Donna H. Cansfield (Etobicoke Centre): 

“The previous NDP and Conservative governments have left our energy sector a disaster. So imagine my surprise when I heard a conversation that took place last Friday on Metro Morning. These are the folk, the NDP, who used Hydro to buy a rain forest in Costa Rica and they cut our lifeline by cutting a lucrative contract to Manitoba.
The Tories as well squandered a North-American-wide economic boom and failed at the same time to renew our generating capacity, and yet I wonder why. I wonder if it’s because Mr Tom Long received over $2 million in a contract; Mr Paul Rhodes got more than $800,000; Michael Gourley received more than $4 million; Leslie Noble received more than $300,000; and Jaime Watt received $800,000. Maybe they were too busy signing contracts to keep our lights on.
But better still, the member from Rainy River has taken up hydro hypocrisy. Throughout the election, and for years, the NDP has been demanding that coal-fired plants in Ontario be closed or converted. They even put it in the 2007 pledge for their platform. They wrote the Ontario Clean Air Alliance as well to close all the plants. It was their promise. At least it was until Mr Hampton, the member for Rainy River, cried to keep the coal plants open. He even said he ran on keeping the coal plants open – unbelievable.”

If one examines the hypocrisy behind this statement after having gone through the recent Ontario election it is worth noting that the Atitokan coal-fired generating station has been closed by the Liberals however in order to preserve the seat (held by Liberals in the last 4 Provincial elections) the Long Term Energy Plan launched by Energy Minister Duguid in November 2010 declared that Atitokan would be converted to biomass by 2013 (page 21 of the LTEP). That a conversion of this size has (to the best of this writer’s knowledge) never before happened did not deter the directive from Minister Duguid being issued. There are many that would equate this to trying to save a Liberal seat that was seen as very vulnerable because of a planned wind turbine development in that riding along with lost jobs in the forest industry sector caused by expensive electricity.

The other ironic part of MPP Cansfield’s remarks relate to the Liberals abandonment of the Mississauga gas plant only two weeks before the recent voting day in order to save two other Liberal seats. The costs of the Atitokan conversion is an unknown as is the cost of cancellation of the Mississauga gas plant. It would appear that it is OK for the Liberals to throw hundreds of millions of dollars of taxpayer money away, if only to ensure they save Liberal seats however, if the NDP or the Conservatives want to save jobs it is not OK!

Later on March 22, 2004 Hansard records this recital by: Mr Kevin Daniel Flynn (Oakville): 

“My question is for the Minister of Energy. People in Oakville have been shocked recently by allegations of impropriety at Hydro One. They were troubled to hear that during the term of the previous PC government, people who were well known to be friends of the government were awarded lucrative, untendered contracts. Minister, can you outline to the people and businesses in my riding what process you plan to use to ensure that contracts are awarded in an open and transparent manner, unlike the previous government’s method of dealing with contracts?” 

 The response coming from the then Minister of Energy, the Hon Mr Duncan was: 

“The first step we took was to make sure that, unlike the Conservative government, we won’t treat Hydro One and OPG like our own private country club; that’s ended. Their record on hydroelectricity: no new generation in eight years; a price cap that cost the taxpayers of Ontario $850 million; no renewable electricity in Ontario; no development under your administration. But all the while they had money for their friends and contacts, people who didn’t have to go through a tender, people who would work for a year or two and go off and get all kinds of goodies.
Well, those days are over, thank goodness. This government’s bringing change to electricity. We’re bringing safe, secure, reliable new supply at an affordable, predictable price for the people they ignored for eight long, painful years.”

Once again, in hindsight, the question posed by MPP Flynn and the response from MPP Duncan drip with hypocrisy. Cancellation of the Oakville power plant by Trans Canada in October 2010 was generally seen as a means to save MPP Flynn’s Liberal seat in the Legislature. This will again cost the taxpayers and ratepayers of this province untold hundreds of millions of dollars without any benefits other then having to endure a Liberal “majority minority”. One has to wonder if Mr. Hampton was still the leader of the NDP would he be less inclined to side with the Liberals on energy matters then the current leader who has Peter Tabuns, former Executive Director of Greenpeace, as the NDP’s Energy Critic?

That MPP Peter Tabuns beat the Liberal Candidate, Ben Chin in a by-election in the Toronto Danforth riding is yet another hypocrisy as Mr. Chin, having lost the election suddenly became an executive with the Ontario Power Authority and the Sunshine List for 2010 indicated he earned $246,000-not bad for a Liberal who lost the election! The Liberals were also busy ensuring that those who drank the global warming kool-aid were also rewarded with Board appointments on the Ontario Power Authority and presumably benefited in other ways for their perceived stewardship on cleaning up Ontario’s electricity sector. People like Bruce Lourie, (appointed to the OPA Board and also to the Trillium Foundation’s Board) have been able to influence decisions emanating from those taxpayer owned institutions.

Further it remains a mystery if Mr. Lourie, via certain of his “for profit” companies, like Enerquality Corporation, the certification arm of ENERGY STAR (R) or Clean Air Foundation, now Summerhill Group, (market transformation consultancy) specializing in energy conservation and renewable energy. have benefited financially. Summerhill is a for profit, not-for-profit and a charity through its three arms. The for profit end claims the OPA, Ontario Realty Corp and Toronto Hydro as clients. That a good Liberal, John Manley was appointed by the Provincial Liberals in 2003 to conduct the review of OPG, that John Beck of Aecon was appointed the Chairman of the OPA’s Board of Directors and the entities that make up Aecon have contributed in excess of $150,000 to the Liberal Party in the last 7 years should be considered co-incidental. The fact that Aeconjointly with Peter Kiewit Sons Co were awarded a $1.7 billion contract for the Lower Mattagami hydropower project should also be considered a co-incidence? That “country club” that Minister Duncan referred to appears to have reappeared but perhaps in a slightly different guise!

The last visit to Hansard on March 22, 2004 has the Hon Dalton McGuinty (Premier, Minister of Intergovernmental Affairs)saying the following: 

 “Speaking of growth, we embrace our responsibility to bring forward a plan that will ensure Ontarians have a lasting, reliable supply of clean and affordable electricity.”

Fast forward seven plus years and the electricity sector has more bureaucracy, a bloated infrastructure, hundreds of unreliable wind turbines producing energy when we don’t need it, a shrinking publicly owned generator in OPG, a bloated distribution company in the form of Hydro One and commitments to foreign owned companies like Samsung that will extract as much as $100 billion dollars from the ratepayers and taxpayers of Ontario over the next 20 years. To top it off, whoever occupies the Energy Minister’s chair has become the reputed “expert” and via dozens of “directives” has politicized what was once a reasonably well run electricity sector that provided low cost electricity and attracted jobs to the province. Now we have high priced electricity that drives jobs out of the province and energy poverty for many who are living on fixed incomes. Where is that “reliable supply of clean and affordable electricity” that Premier McGuinty promised?

That is the legacy that the Provincial Liberal Party have created. There will be more to come on what the McGuinty Liberals have done to the electricity sector in Ontario as we examine their vision and the resulting legacy in more detail!

Parker Gallant,
December 4, 2011

Electricity and the Liberals’ Hansard History: Chapter 2

This is the second chapter in a series by Parker Gallant:  Chapter 1;  Chapter 3Chapter 4, Chapter 5. Chapter 6, Chapter 7Chapter 8

The failure of the Harris-Eves government to include certain crown corporations in the commonly referred to; “Sunshine Act” caught the attention of the Liberal’s shortly after they attained power in Ontario and particularly because of the Clitheroe scandal that had occured in 2002 while she was the CEO of Hydro One. That led them to seek to amend the act to capture those institutions and grant the public the right to see what the salaries and perks were at those crown corporations. The following deals to some extent with the efforts to amend that Act along with the rhetoric that accompanies any amendments to an act or the introduction of a new act and is but one day when the Legislature sat in March of 2004.
Hansard from March 31, 2004 was a day filled with lots of chatter about OPG and Hydro One and the extension of Bill 15, the Public Sector Salary Disclosure Act. The Bill would require the same salary disclosure for OPG and Hydro One as was required for all other public servants as well as making them subject to the Freedom of Information and Protection of Privacy Act.

That the Liberals would only one year later, create the Ontario Power Authority which would sign “undisclosed” generation contracts with dozens of wind turbine developers including Samsung flies in the face of their need to have OPG and Hydro One made subject to the Freedom of Information and Protection of Privacy Act. The other issue mentioned frequently by the Liberal speakers on this day referred to the prior sitting government of Ernie Eves and his freezing of the electricity rates which reputedly cost the Ontario taxpayers $850 million. To put that in perspective the Samsung contract alone will cost the ratepayers in the Province in excess of $1 billion for each of the next 20 years.

The support for Bill 15 from some of the sitting Liberal members was absolutely bubbly as noted below. The following from Liberal MPP, Donna Cansfield (now Parliamentary Assistant to the Minister of Economic Development, Brad Duguid) is particularly “holier then thou”;

On paper, Hydro One and OPG have only one shareholder, the province of Ontario. In fact, there are about 12,112,000 shareholders, the total population of our province. These 12 million shareholders will find it much more difficult than other shareholders to understand what is happening at Hydro One and Ontario Power Generation because they don’t receive annual reports and, of course, they don’t attend stockholder meetings. They must rely on us, members of Parliament, the government, as their only proxy to keep close watch on these companies and to protect their interests, the interests of Ontarians, these 12,112,000 people. Doesn’t this give us a much more onerous task than the directors of any other public company? Of course it does. Are we not more responsible for surveillance, not less? Is it not more important then that all of us in government have an absolute duty to be more resolute, more demanding and more ethical than any other shareholder or director?” and this;

We will make certain that some of the money we will force Hydro One and Ontario Power Generation to spend more wisely will go to initiatives that include aggressive conservation, new and greener sources of supply and an accountability to help us meet our objectives of cleaner air, consumer protection and a sustainable supply of electricity for generations to come.” and this;

This bill is an important and integral part of the stand of the Liberal government. It means we’ll be able to take the dollars and apply them to health, education, our seniors and long-term care. It will make a difference in terms of the compensation that will come. It will make a difference in terms of what will happen in the future for the children in this province.

MPP Donna Cansfield in the recent run to retain her seat was quite delighted to support the cancellation of the Mississauga gas plant and was quoted as follows; I’m delighted that the Ontario Liberals will put more rigour into site selection to protect homes, schools and hospitals,” said Cansfield. “I’m also delighted that the views of our community have been listened to.” One has to wonder how this cancellation, the product of Dwight Duncan’s original directive(which is blanked out [see Chapter 3 about the McGuinty “open electricity policy] but presumably included the Mississauga contract and others) and it’s costs will affect the dollars for “health, education, our seniors and long-term” care. It would appear that MPP Cansfield was willing to claw back those dollars for health, education, seniors and long-term care in order to save a couple of Liberal seats in the most recent election.

The Minister of Energy in 2004 was Dwight Duncan and he had this to say that day in the Legislature: The member is quite right: We introduced Bill 4, which will erase the $850-million charge to the provincial government that your failed energy policy put on the people of Ontario. My colleague the Minister of Municipal Affairs had the rent bank announcement, and my colleague the Minister of Community and Social Services has $2 million to help those low-income families. We expect that bills for the average consumer will go up by about 4% to 5%.

That forecast of a a 4% to 5% increase in the average electricity bill 7 years later has resulted in the “average consumer” paying over 100% more and the recent Minister of Energy, Brad Duguid has told us to expect another 46% increase by 2015. And Duncan is now the Minister of Finance! One of MPP Duguid’s predecessors in the Energy chair was George Smitherman who when presenting the Green Energy Act (Act)to Parliament in early 2009 was quoted as saying that the average electricity bill would rise by 1% per year. Forecasts don’t seem to be a strong suit of our Liberal Energy Ministers.

Another Liberal David Ramsay (Minister of Natural Resources) had this to say on that day in March 2004: “In January of this year my colleague Dwight Duncan, the Minister of Energy, announced our intention to seek up to 300 megawatts of new renewable energy capacity as soon as possible. One of the components of meeting that goal is wind power. The wind turbine, for example, at Exhibition Place can produce enough electricity each year to light 250 homes. Since it produces no pollution, it displaces up to 380 tonnes of carbon dioxide annually. This is a proven technology that works, and they will increase our supply of renewable energy.

That wind turbine that Minister Ramsay touted produces less then half of the energy required to power those 250 homes and has cost the ratepayers of Toronto an as yet undisclosed amount of money through the partial acquisition of it by Toronto Hydro. It may have also cost the co-op members but questions asked of Toronto Hydro, the City of Toronto and the Co-op on several occasions have gone unanswered-in fact all three parties have ignored requests for information. Will MPP Cansfield speak up about how her Liberal party has met the test of her remarks in the Legislature: “government have an absolute duty to be more resolute, more demanding and more ethical than any other shareholder or director?” Somehow I doubt that!

Forecasts and the ethics of disclosure would not seem to be a strong suit of the governing Liberals so we should be concerned that the most recent 46% forecast will be greatly exceeded in order to reward Samsung and others connected with the renewable energy sector.

Parker Gallant,
December 4, 2011