Electricity and the Liberal Hansard History, Chapter 6

This is chapter 6 in a series by Parker Gallant:  Chapter 1;  Chapter 2:  Chapter 3Chapter 4; Chapter 5Chapter 7Chapter 8


My ongoing review of the Liberals pronouncements in the Legislature in 2004 and the results of those proclamations (with particular emphasis on the electricity sector in Ontario) continues, however, this chapter will wander off in a slightly different direction, for a brief period. In my review of Hansardfor May 5, 2004 the dissertations of Mike Colle, MPP for Eglinton-Lawrence caught my attention and were particularly noteworthy. Here is what Liberal MPP Colle had to say;

The provincial debt has been increased. If you include the hydro debt, it’s almost $140 billion of debt that they have on the books. Never mind the deficit; $140 billion. Do you know what it costs us to carry that deficit? It costs you, the taxpayers of Ontario, over $10 billion a year in interest payments on their debt. Next to health care and education, the third-largest bill we have in the province of Ontario is paying interest on the provincial debt. That’s what they left us with. They tell us, “You’re not holding up to your commitments.”


If one fast forwards to September 30, 2011 the debt that Liberal MPP Colle spoke about has increased to $251.9 billion, (an increase of 80% in the last 8 years) per the Ontario Finance Authority report. That debt doesn’t include the numerous contracts executed under the FIT and MicroFIT programs which will commit the ratepayers of Ontario to the payment of an additional $80/$100 billion over the terms of the contracts signed by the Ontario Power Authority (OPA) with $20 billion of that just for Samsung. It is worth noting that the average annual increase in debt ($14 billion per year since the Liberals gained power) exceeds the deficit of $5.5 billion in the preceding year (2003) by a factor of almost three (3)! Interest on the debt is still the 3rdlargest budget item in Ontario and will be much greater in the event interest rates rise or Ontario suffers a rating decline. Both of these are likely events within the next year.

This day’s records from Hansard also has other self adulation comments from the Liberals and this exchange between Liberal MPP Mr Mario G. Racco(Thornhill) and Dwight Duncan is telling:

My question is to the Minister of Energy. Friday, April 23, was Conservation Day in Ontario, and I had the pleasure of visiting a company in my Thornhill riding that produces energy-conserving devices such as smart meters. These smart meters allow energy consumers to easily and accurately monitor and control consumption under the tiered rate structure.I understand that our government is trying to build a culture of conservation in our province so that Ontarians spend less on energy and rely less on polluting energy sources such as coal while preventing the potential of more dangerous power blackouts, as we did experience under the Tory government. Minister, what is your ministry doing to encourage the use of energy-conserving devices such as smart meters by homeowners and businesses?


The response from Hon Dwight Duncan Minister of Energy, to this question was enlightening:

On April 19 of this year, Premier McGuinty announced the most broad-ranging and sweeping energy conservation program in the history of Ontario. At that time, we announced our intention to put smart meters into every Ontario home by 2010, with an interim target of 800,000 meters in place by 2007.We’ve also given the Ontario Energy Board clear direction and authority to establish rates with more flexible pricing to allow Ontarians to save money if they consume electricity in off-peak hours (emphasis). We’ll be working with the Ontario Energy Board to develop and implement requirements for the installation of smart meters in homes and smaller businesses. Large consumers already have interval meters, a type of smart meter. We’ll allow local distribution companies to begin investing approximately a quarter of a billion dollars, the largest investment in conservation in the history of the province.This government is moving fast and solidly to build and improve a conservation culture in the province of Ontario.”



Minister Duncan did deliver on the installation of those “smart meters” which have added costs to all ratepayers bills under the “regulatory” line however the benefits of them are highly suspect. In my opinion all ratepayers in Ontario would find Duncan’s claim that smart meters would “save money if they consume electricity in off-peak hours” to be a lie as rates for “off-peak” have risen from 4.7 cents per kWh (all electricity no matter the time of use) on May 1, 2004 to 5.9 cents per kWh on November 1, 2011 which is a 25.5% increase (3.2% per annum) during a period of time when inflation prices increased at 2% per annum or less. The Duncan pronouncement wouldn’t even prove valid if all consumption was switched to off-peak. On-peak rates have increased since his dissertation on May 5, 2004, by almost 130%. Unless usage fell by 40% or more no one would “save money”!


Addressing the”conservation culture” that Duncan spoke of on that day is another dizzying array of spending to accomplish little as was evident from the Environment Commissioner’s reportannounced December 7, 2011 and the OPA’s report released on December 23, 2011.
The Environment Commissioner’s report had the following to say about electricity conservation: 

“By investing about $1.7 billion in conservation programs from 2006 to 2010, Ontario saved electricity ratepayers $3.8 billion in avoided electricity supply costs.”

The OPA’s report had this to say: 

From 2006 to 2010 Conservation programs have seen an investment of $1.7 billion and have saved ratepayers $3.8 billion in avoided costs.”

From all appearances it would appear that either the OPA agrees with the Environment Commissioner or vice versa. A nice co-incidence perhaps! If you actually examine where the reduced consumption occurred for both the overall ”average” and “peak” usage designations (claimed 1751 MW) you discover that the bulk (1000 MW) of the claimed conservation was due to reduced wholesale demand caused by the 300,000 manufacturing jobs that have disappeared in the province since the 3rdquarter of 2003. The savings of the residual 750 MW cost the ratepayers of the province $1.7 billion dollars which works out to about 26 cents a kWh but our high electricity prices may have cost the loss of many of those good paying manufacturing jobs which also reduced tax revenues and drove up the province’s debt. The ultimate cost of that conservation was considerably more than stated in either of those two reports. The Environment Commissioner did note that the “smart meters” were virtually useless in determining if time-of-use pricing played a roll in the conservation reported. Perhaps he should have said this has cost the ratepayers over $2 billion and no conservation benefits could be detected.


May 4, 2004 was “Opposition Day” and Mr John R. Baird (Nepean-Carleton)brought the following motion before the house: 

“Be it resolved that the Legislative Assembly call upon the government, To recognize that the Premier ruled out raising taxes over the course of the last election — just six short months ago by saying the following: “We will not raise taxes one cent on Ontario families,” 

While the motion was about the health “user fees” that Premier McGuinty insisted were not taxes the response from the Liberals to this motion enlisted some interesting comments including this one from Brad Duguid.

We’re seeing political hacks being paid millions of dollars. We’re seeing billions in overpayments, billions of dollars of over-budgeting for projects in places like Pickering, $40 million spent on the so-called dream team. What did that get us? It got us an energy plan that is absolutely unsustainable right now. Thank goodness we were elected last October to get this problem cleaned up. Thank goodness we have a minister who understands that some tough decisions have to be made on the energy file, and we’re going to proceed proudly to make those changes.”

Looking back many would note that over-budgeting is probably NOT what MPP Duguid actually meant. What it appears he meant was spending exceeded the budgeted amount. This is something that the Ontario Liberals have delivered on in most portfolios and one of the reasons for the province’s current fiscal problems. It is also interesting that Duguid referred to “an energy plan” as we are still waiting for one to emerge from the Liberals despite all the rhetoric since their election in 2003.


This problem” that MPP Duguid referred to has not been cleaned up and in fact has grown worse and was caused principally by that esteemed “minister” he referenced, and by George Smitherman, when he was the Energy Minister and of course by Mr. Duguid himself during his tenure as Energy Minister.


Parker Gallant,
January 10, 2012

Where’s George? Reaching into Ontarians wallets!

The “Where’s George” websitewas initially established to track American currency, however we Ontarians should set one up to follow the activities of our former Minister of Health and Minister of Energy and Infrastructure, George Smitherman.
The former Energy Minister, George Smitherman is still trying to reach into our pockets in spiteof “Following his unplanned retirement from politicsas lamented on his website. He also posted his submissionto the Ontario Power Authority in respect to their current review of the FIT and MicroFIT programs under the new Minister of Energy, Chris Bentley. The submission is a double spaced 22 page ramble that uses the word “transparency” 16 times, mentions health only in the context of “clean air” and completely ignores other noise relatedhealth issues that have moved from merely anecdotal to scientific and peer reviewed. The submission includes two pie charts relating to FIT and MicroFIT applications and their respective percentage of generation. The submission by his company is full of one-sided hype expounding on the virtues of renewable energy while ignoring the economic impact to Ontarians. Much like the press releases emanating from former and current Liberal Energy Ministers it hyperboles its way with the usual words about “creating 50,000 jobs in three years”, “leading jurisdiction for renewable energy jobs and investment in North America”, “vibrant”, “incent proponents, large and small, to develop projects by offering an attractive price” etc.
Smitherman sincerely wants the largesse to continue particularly now that he has been appointed to the
Advisory Board of Inerjys Ventures, a “$1 billion renewable energy strategic investment fund and global leader in green finance.”

The OPA submission by Mr. Smitherman makes no mention of the foregoing however the Board Advisory appointment was recent (January 9,2011) and the submission to the OPA was completed on December 14, 2011 almost a month ago. I’m confident that if a conflict of interest in this matter existed Mr. Smitherman would have declared that in his submission.
Mr. Smitherman did dutifully register with the Ontario Lobbyist Registry back in June 2011 just about the time he was contracted by the Municipality of Greenstone. Greenstone want to benefit from the exploitation of the “Ring of Fire” by securing the building of a chromite processor on the outskirts of Nakina and Aroland First Nation and they hired Mr. Smitherman as their saviour believing he will convince Cliff Resources to build the refinery in their Municipality. Cliff Resources have noted that over the projected 30 year life of the contract it would cost them an extra $1 billion in electricity costs and are looking to either Manitoba or Quebec for the establishment of the processing unit. So the man most responsible for high electricity prices, that has driven jobs out of the province (Xstrada moved their refining operation to Quebec because of electricity prices) now has the task of trying to convince Cliff Resources to refine the chromite in Ontario. As the expression goes, it would appear that George has been “hoisted by his own petard”!
Smitherman however is noted as a fighter and to that end he intends to do what he can to win the battle for Greenstone. The Lobbyist Registry indicates that when he filed his company’s application last June he completed the “G.1. Government Funding” section and entered the following;
Is your client funded in whole or in part by any government?
Yes
If so, then list the government agencies:
— Province of Ontario – standard transfer funds (information pending), 0;
— Northern Ontario Heritage Fund Corporation – Aviation Service Business Park expansion, 692,700;
— Northern Ontario Heritage Fund Corporation – Beardmore Multipurpose Building, 655,000;
— Northern Ontario Heritage Fund Corporation – High Hill Breakwater Development, 400,000;”
The funding that Greenstone will receive is not necessarily going to be used to pay Smitherman, however one wonders if somehow he helped the municipality chop through the red tape that is often in the way. His biocertainly makes him out to be a “walk on water” type with claims like these; “During his time in Cabinet, he was responsible for the allocation of more than $250 billion Canadian Dollars.” and “His tenure brought significantly improved access to doctors and nurses. Ontario’s Family Health Team model, which serves more than 3 million Ontarians, was pioneered during this period.”
As one would expect the cornerstone of his lobbying efforts to convince Cliff Resources to process their ore in Ontario is predicated on the Provincial Government spending lots of ratepayers money. His proposal includes a new gas generating plant at either Exton or Geraldton, a hydro development (Little Jackfish) and a major expansion of transmission lines and the grid by Hydro One. There is no costs mentioned in the proposal but the list of who will pay includes; Hydro One, OPG, the Federal Government, Provincial Infrastructure Investments, and ratepayers. Perhaps Mr. Smitherman still doesn’t understand that all of the foregoing are either funded by taxpayers or ratepayers or perhaps he just doesn’t care. At the end of the day it is difficult to see how all this spending will somehow reduce the cost of electricity for Cliff Resources and entice them to build their refinery in Ontario but maybe Smitherman has another plan that he will launch at a later date.
I think most Ontarians are familiar with Mr. Smithermans ability to spend our money but perhaps were unaware that he continues to believe that he still has access to our wallets.
Parker Gallant,
January 11, 2012   

Electricity and the Liberals Hansard History, Chapter 5

This is the fifth chapter in a series by Parker Gallant:  Chapter 1;  Chapter 2:  Chapter 3; Chapter 4Chapter 6Chapter 7Chapter 8

This is the next chapter in this look back at the promises made by the McGuinty Liberals in 2004 following their first majority government. In this review we see how the Liberals developed their electricity policy and how it affected the maufacturing sector in the province. The Ontario Legislature’s sitting on May 3, 2004 had a robust question period about this policy development with lots of cut and thrust queries and responses as noted in Hansard.
MPP Howard Hampton in questioning the Energy Minister zeroed in on an issue of his concern referring to the sale of Ontario Hydro assets to Brascan; “That was a great deal for Brascan, but a terrible deal for Ontario electricity consumers. Minister, will you confirm today that you will not sell any hydro generating stations to Brascan or any other private power company?
The response from Dwight Duncan, Minister of Energy was unequivocal:We will not sell off assets like the Tories did. We will also not jump into the harmful policies of the Tories and the NDP. Our government is taking a balanced approach to energy policy.” He went on later after further questioning, to state;

We already launched an RFP last week for 300 megawatts of renewable energy, the first time in Ontario’s history, and soon we’ll be launching an RFP for 2,500 megawatts of new electricity in this province to help address the problem that was left by previous governments.” and delivered a sharp rebuttal as the following attests;
That member and his policies were rejected by the people of Ontario last fall. Dalton McGuinty and his government are taking reasonable steps to ensure that adequate, fair and affordable electricity is available for all Ontarians.
Looking back at Minister Duncan’s remarks that day in the Legislature it is interesting to note the co-incidence between the 2500 MW announcement and the 2500 MW deal that another Energy Minister negotiated (George Smitherman) a few years later and yet another Energy Minister, Brad Duguid signed. The latter 2500 MW is the controversial Samsung contract.

The OPA did eventually get their marching orders in September 2004 from the Minister and executed most of the contracts to fufill the first 2500 MWs that Minister Duncan announced on May 3, 2004. Most of the contracts signed were gas related and included the Mississauga gas plant which was mentioned in the OPA’s 2005 annual report. This plant was cancelled by the Liberals mid September 2011, just two weeks before voting day, in an effort to save two Liberal seats. The ratepayers and taxpayers of the Province are still waiting to find out what that will cost.
On the Minister’s promise to “ not sell off assets” Dwight Duncan was certainly truthful however, those assets have been weakened substantially as the OPG’s generating capacity and output have dropped (refer Chapter 3) thereby reducing OPGs value.
As ratepayers and taxpayers we must take issue with his comment referencing “fair and affordable electricity is available for all Ontarians” as we have had to endure rising electricity prices and their effects on the Ontario manufacturing sector.
Just over one year after Duncan’s address in this sitting the foregoing was brought to light by the Economics Division of the Parlimentary Information and Research Service as they delivered a reportdated September 22, 2005 to Parliament that contained the following;

Ontario is Canada’s industrial heartland and long-time economic engine. To a large extent, that engine is powered by the supply of relatively cheap, reliable electricity, which has played a key role in the development of the province’s energy-intensive sectors such as manufacturing, chemicals, paper and metals.Today, there is growing anecdotal evidence that the lack of a reliable and low-cost supply of electricity [emphasis is the writer’s] is becoming a competitive disadvantage for many businesses operating in Ontario. For example, the Ontario Minister of Natural Resources’ Council on Forest Sector Competitiveness has warned that rising electricity prices are putting enormous pressure on the province’s already beleaguered forest industry. This industry, which employs some 85,000 people and is described by the Council as the economic bedrock of northern Ontario, has long depended on low-cost electricity, since electricity can account for up to one-third of operating costs.The Government of Ontario has pledged to close all existing coal-fired generating stations by 2009 in an effort to clean up Ontario’s air and reduce greenhouse gas emissions, which are linked to climate change.
Most environmentalists and health care professionals strongly support the government’s plan to phase out the use of coal by the beginning of 2009. But electricity experts are concerned about the impact this rapid change could have on the reliability of Ontario’s electricity grid.The IESO has characterized this initiative, the cornerstone of the government’s electricity strategy, as the “largest and most significant electricity system change ever undertaken in Ontario,” as it will remove 6,434 MW of generating capacity from the grid, representing approximately 21% of the current total.“

So a little over a year after Duncan’s remarks in the legislature, the Federal Government received a disconcerting report that Ontario, Canada’s “long-time economic engine” was in danger because of the lack of a reliable supply of relatively cheap electricity. That damning report and the concern expressed therein did not alter the drive by the Liberals to continue their push for expensive intermittent electricity-instead they subsequently passed the Green Energy Act which has futher accelerated the drive to create an uncompetitive environment for industry.
As further evidence the Ontario Forest Industries Association in their January 2011 pre-budget appeal to Minister of Finance, Dwight Duncan had this to say as a “Made in Ontario challenge”;

 “Despite the anticipated recovery of global markets, and the desire to put Ontario’s wood back to work, Ontario’s renewable forest sector continues to face numerous, significant “home grown” made in Ontario challenges. The continuous loss of industrial wood fibre through untested public policy, uncompetitive electricity rates,and government red tape have all contributed to the creation of an uncompetitive economic environment in Ontario.

Elsewhere in the report they make this observation; “All of these regulatory and policy initiatives have sent a clear and unfortunate message to industry – Ontario is not open for business. Instead of developing policies that stimulate growth and incite investment, the Ontario government has focused its attention over the past several years almost exclusively to protectionist agendas and unnecessary and untested initiatives that instead have only served to create considerable uncertainty, stagnate development and reduce economic investment.
Looking further the Canadian Federation of Independent Business in it’s presentationto George Smitherman July 13, 2009 noted “Fuel, energy costs” as their # 1 concern and made three recommendations:

  • Price matters! It should not be a “given” that electricity costs are inexorably rising. The Global Adjustment Mechanism must not be allowed to grow out of control.”
  • Lots of onservation programs-not many suited to the SME sector. Allow businesses to choose programs that are suited to them, as opposed to having them imposed by LDCs or the OPA.”
  • Ensure RPP and TOU fairness for small business. CFIB continues to warn that implementing TOU without understanding impacts may endanger businesses and jobs.”

The foregoing hard evidence from two of Ontario’s biggest group of employers supports the premise contained in the Auditor General’s report of December 5, 2011 wherein he states: “We also noted that studies in other jurisdictions have shown that for each job created through renewable energy programs, about two to four jobs are often lost in other sectors of the economy because of higher elec­tricity prices.
The Auditor General’s report had this to say about the Global Adjustment:

By 2014, the GA is expected to be 6¢ per kilowatt hour (kWh)—almost two-thirds of the electricity charge—and will be almost two times more than that year’s projected HOEP.Based on our analysis of OPA data, renewable energy contracts will contribute significantly to increases to the Global Adjustment. As illustrated in Figure 3, the total GA is expected to increase tenfold province-wide, from about $700 million in 2006 to $8.1 billion in 2014, when the last coal-fired plants are phased out. Almost one-third of this $8.1 billion is attributable to renewable energy contracts.”

Premier McGuinty and his Liberal Ministers have failed to deliver on his promise to bring “fair and affordable electricity” to Ontarians and instead has changed the “ anecdotal evidence” cited by the Federal report of almost 6 years ago into hard evidence that the Liberal policies have cost Ontario good well paying jobs in the manufacturing and forest product sector.
Some legacy!
Parker Gallant,
January 7th, 2012

Parker Gallant: Green Energy Agenda usurps Property Assessment and Municipal Tax Base

The Ontario Liberals, via the Ministry of Finance, gave marching orders to the Municipal Property Assessment Corporation (MPAC) yesterday tellingthem to not increase assessments for “property owners who install renewable energy technologies”.
Property assessments increase when property improvements are made. As soon as a building permit is issued the municipality sends a copy to MPAC. That permit copy is used by MPAC to increase the assessed value of the property and the following year property owners pay additional property taxes because of the increased assessment.

The headline on the Government press release read; “Improving Property Tax System for Green Energy“ but it comes at the expense of others who can’t afford the installation costs. This change will impact municipal tax revenue increases that have normally accrued though the issuance of those building permits.
The press release carried the endorsement of Dwight Duncan, the Minister of Finance who will soon be told by economist Don Drummond to slash spending or miss (by years) balancing the budget by 2018. Minister Duncan had this to say in the press release: “Ontario is leading the way when it comes to producing reliable energy from clean, renewable sources. These changes will help ensure that property tax assessment does not discourage property owners from contributing to a green energy system that supports a cleaner environment and healthier families.” The message is clear; if you have the money to invest in renewable energy Ontario ratepayers and taxpayers will ensure you earn a healthy return!
As an example; the costs of a solar installation of say 10 kilowatts (kw) will cost from $58/$80,000 depending on location and whether it will track the sun’s movement. Under the MicroFIT program the installation is estimated to generate from $93/$150,000 profit (over 20 years) depending on the installation type chosen.
Mr. Duncan’s salvo against the municipalities will not help achieve a balanced budget for the province and might make it worse if he weakens the municipalities tax base. Those municipalities (mainly rural) with lots of small installations of wind, solar and anaerobic digestion electricity generation will be knocking on the doors at Queens Park or face the ire of their local property owners who will see the mill rate and their taxes increase. Building permits, which normally signal increased municipal tax revenues will mean nothing other then the fees collected for the permits.
The Association of Municipalities of Ontario (AMO) has an MOU (memorandum of understanding) with the province and their website contains the following message under their “Mandate”; “The MOU provides the opportunity for municipal input and reaction to provincial policy ideas (pre-consultation) so that they are fully informed as part of any provincial policy making process.” We understand that AMO was “aware” of the plan by the Finance Minister to direct MPAC to treat the assessment of renewable energy installations differently but the extent of the “pre-consultation” process was not fufilling and AMO has sought clarity.
AMO has taken issue with many aspects of the FIT and MicroFIT programs as is evident from their submissionof December 6, 2011 to the Ministry of Energy and the Ontario Power Authority (OPA) wherein they have made 14 recommendations to improve their role in these programs. It appears the fallout of the Finance Ministry’s press release of January 4, 2012 treats the municipalities with the same respect as they were given under the Green Energy Act—absolutely none!

Parker Gallant,
January 5, 2012

Electricity and the Liberals Hansard History Chapter 4

This is the fourth chapter in a series by Parker Gallant:  Chapter 1;  Chapter 2:  Chapter 3Chapter 5Chapter 6Chapter 7Chapter 8

The review of the Liberals actions on the electricity sector continues and this chapter will deal with conservation and smart meter issues raised in the Ontario Legislature and recorded in Hansard. The following response from the Hon Dwight Duncan, Minister of Energy occured on April 20, 2004 in respect to a question from Liberal MPP, David Zimmer (Willowdale). MPP Zimmer was asking how the 5% conservation target would contribute to a “new culture of conservation in Ontario?” and got the following response; Hon Dwight Duncan (Minister of Energy, Government House Leader): 

The member is right, this is a challenging target that we’ve set: 5% by 2007, 10% by 2010. Yesterday’s announcement by the Premier empowers Ontario electricity consumers by providing them with the knowledge, the tools, the opportunities and the incentives that will allow them to achieve very significant energy savings.

The announcementby the Premier the previous day had a myriad of initiatives including; conservation reduction, smart meters in every home by 2010 that would allow people to save money, developing regulations for net metering, spending money ($225 million) for community based conservation programs, launching a public education and outreach campaign and creating an “Ontario Power Authority that would include a “Conservation Secretariat”.

That announcement covered a lot of ground that should be examined today to determine if those goals generalized by Premier McGuinty and specified by the Minister of Energy in the Legislature, have been achieved.

The 5% reduction via conservation would entail a drop of 7.5 TWh from the 152 TWh we consumed in 2003 by 2007 and a 16 TWh reduction by 2010. Needless to say we didn’t achieve those lofty goals as consumption in 2007 was 152 TWh. Consumption in 2010 however did drop to 142 TWH but the drop had more to do with the fact that Ontario lost over 300,000 manufacturing jobs between the 3rd Quarter of 2003 and the 3rdQuarter of 2010 and consumption of “peak” hour electricity by large industrial users indicates it is down by close to 8 TWh. Is that what the Minister had in mind when he told the Legislature about his plans or the Premier actually meant?

We can give the Premier full marks for his promise that would see smart meters in every Ontario home and business by 2010 but the full cost of that has never been disclosed. We are aware that Hydro One reported that they spent $700.54 per household as reportedinstalling their version of the smart meters which indicates a cost to Hydro One for their 1.3 million ratepayers of $900 million. If the other 3.3 million provincial ratepayers smart meter costs were only 50% of that figure another $1.2 has been spent adding over $2 billion to what those ratepayers will need to pay without any benefits. It is difficult to find any evidence that those smart meters have allowed anyone to “save money” as he also promised. The benefit to the Province has enabled them to set time-of-use rates that ensure ratepayers are billed at levels as much as 130% higher per kWh then in 2004. The Environment Commissioner in his report released December 7, 2011 indicated the smart meters cannot even be used to determine if any shifting of demand has occured. A large part of the claimed conservation was recently shown to come from reduced demand from the manufacturing sector as jobs have left the province. Still to hit the ratepayers will be the billions in planned spending to produce the “smart grid” with IESO alone noting their requirement is in excess of $1.5 billion.

In respect to the Premier’s promise that “net-metering” regulations would be established we can find no evidence this low cost option was even pursued as the OPA never received a Ministerial directive to develop it. Instead, they embarked on setting contract prices under several programs eventually replaced by FIT and MicroFIT contracts that paid above market prices decreed by the Energy Minister, George Smitherman shortly after the Green Energy Act was passed.

The “community based” spending program, in the Premier’s announcement appeared to be $225 million in total and is spent on, coupons, rebate programs, media ads and costs involved in picking up old fridges and is well over $300 million per year. Additional to that annual spending is the reclaiming of revenue lost through conservation by the local distribution companies (LDC) for “revenue deterioration”. Ratepayers will find their LDC applying to the Ontario Energy Board (OEB) for recovery of that lost revenue as noted in a recent applicationby Toronto Hydro as just one example.

Later in the sitting of the Legislature on April 20, 2004 the Energy Minister Hon Mr Duncan said: 

Smart meters are a key conservation tool. With this technology, consumers will be able to see, understand and learn when it’s appropriate to adjust their electricity use. Smart meters will also allow consumers to benefit from time-of-use rates. These rates will benefit consumers who use electricity when demand is lower. Many consumers who currently use electricity during these times will now be able to benefit from these rates. Not only do smart meters help consumers use electricity during peak demand periods, but they also benefit their local system and grid by keeping costs and prices down even more.


Perhaps the “benefit” referred to in Minister Duncan’s remarks was meant to pass as the “cost/benefit” analysis that the Auditor General indicated was not used by the Liberals in his reportreleased December 5, 2011 critizing the Liberal Government for their failure to complete those analysis in respect to their renewable energy push.

Just a couple of days later on April 22, 2004 Hansard records this from Leona Dombrowsky, Minister of the Environment: 

We are also taking action to improve air quality. We are committed to shutting down the coal-fired generating plants that produce smog-causing pollutants and greenhouse gases. It will not be easy, especially given the shambles of Ontario Power Generation and the strains on our power grid, but there are alternatives. I am heartened by the success of projects such as Toronto’s first windmill.


The Exhibition Place windmill is the poster child for the Liberals and is reverently mentioned by them whether in the Legislature or in interviews yet it has performed abysmally and has been nothing more then a complete waste of money. It has had operating problems since it was first erected including a recent bearings replacement that cost $200,000.

So looking back the Liberals have spent in excess of $2 billion on smart meters, plan to spend billions on the smart grid and have spent billions more on their conservation efforts all without a cost/benefit analysis. None of those billions will produce any additional electricity or financial benefits for the province. Any analysis done would clearly show the costs of the Liberal dictates, but would indicate benefits; from a financial and conservation side to be lacking. The unfortunate happenstance however is that all of the costs of those efforts are finding their way onto the ratepayers bills.

Some legacy, some benefit!

Parker Gallant,
January 2, 2012

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