The power system is broken, says Ontario AG: Parker Gallant

The sad (and very expensive) truth. Ontario fleeced out of $37 billion
The sad (and very expensive) truth. Ontario fleeced out of $37 billion

Financial Post, December 3, 2015

ONTARIO’S POWER TRIP

by Parker Gallant

Almost a year ago Bonnie Lysyk, Ontario’s Auditor General, issued a report related to the “smart meter” program, estimating it cost double its projected costs. Bob Chiarelli, the Ontario Minister of Energy, was quick off the mark to defend his ministry by stating “The electricity system is very complex, it’s very difficult to understand,” he said. “I can tell you that some of our senior managers in discussing some of these issues with some of the representatives from the Auditor General’s office got the feeling that they didn’t understand some of the elements of it.”

Here we are one year later and yesterday’s annual report out of the AG’s offices is all about the electricity sector and the condemnation of the planning and implementation processes that have emanated from the past and present energy ministers since the Liberals gained power.

Here is one of the condemnations that will prove hurtful to Minister Chiarelli and his predecessors: “over the last decade, this power system planning process has essentially broken down, and Ontario’s energy system has not had a technical plan in place for the last 10 years. Operating outside the checks and balances of the legislated planning process, the Ministry of Energy has made a number of decisions about power generation that have resulted in significant costs to electricity consumers.”

Here is another: “The Ministry has issued a total of 93 directives and directions to the OPA [Ontario Power Authority] between 2004 and 2014. Through them, it has made a number of decisions about power generation — decisions that sometimes went against the OPA’s technical advice.”

The AG has included many estimates on the costs of those “directives and directions,” estimating the FIT or feed-in tariff program alone will result in ratepayers picking up extra costs of $9.2 billion just for wind and solar contracts when the GEA [Green Energy Act] usurped the previous competitive procurement program. Other notable issues highlighted in the AG’s report include the Mattagami project, $1 billion over the original estimate, raising the cost of hydro production to $135 per megawatt hour, and the conversion of the Thunder Bay coal plant to biomass using imported wood as a fuel source and producing electricity that will cost $1,600 per megawatt hour.

The report is also critical of the “Conservation First” theme brought in by Minister Chiarelli in his most recent Long Term Energy Plan, due to our significant surplus generating capacity, past spending of $2.3 billion and future spending of $2.6 billion that simply raises the price of electricity for consumers. The effect of the surplus capacity is highlighted in noting that it is exported well below its cost and that curtailing power to ensure grid stability is paying generators for not producing.

That message alone highlights how “the Ministry of Energy has made a number of decisions about power generation that have resulted in significant costs to electricity consumers.”

As stated in the report, “Since power is exported at prices below what generators are paid, and curtailed generators are still paid even when they are not producing energy, both of these options are costly. From 2009 to 2014, Ontario had to pay generators $339 million for curtailing 11.9 million MWh of surplus electricity.”

Anyone observing Ontario’s electricity sector over the past 10 years will have no difficulty in nodding in agreement with the bulk of the report’s conclusions, having seen their electricity bills rise on a semi-annual basis for the past decade. Those who want a better understanding of why those increases have occurred will also appreciate the AG’s observation that “lack of transparency” has prevented ratepayers from being told why their bills keep going up.

While the Ministry has stated after each recommendation in the AG’s report: “The Ministry agrees with the Auditor General’s recommendations,” the concerns of ratepayers are likely to be tripped up by Premier Wynne’s promise to bring in her latest tax grab in the form of the promised “cap and trade” plan, which will surely result in additional costs that ratepayers will be forced to absorb.

The AG has demonstrated that she has far more insight into how the electricity system works in Ontario than the Minister or Ministry officials, but it remains to be seen whether the system can be fixed.

Parker Gallant is a retired banker who looked at his electricity bills and didn’t like what he saw.

(Parker Gallant is vice-president of Wind Concerns Ontario.)

 

Comments

Pat Cusack
Reply

It would be nice to see Mr Chiarelli moved to some place where he can have nothing to do with money but please do not move him to the Federal Govt. . They are digging their own holes without his help. Love thy neighbour means don’t let him tamper with the budgets of the Feds or other Provinces. It would seem he is our cross to live with.

Walter Bailey
Reply

I would like to have Mr.,Chiarelli removed from his position as he is obviously incompetent , removed without any cpmpensation, if he was working for a private company he would be out of business. All of these individuals who work in our government seem to be excused of their errors in judgement, why ?? Is there no accountability in their responsibility.

Mike Jankowski
Reply

We heard it here first. Thank you Mr. Gallant for your expertise and care.

We need to keep exposing all facets of the terrible decision that is subsidized large Wind Power until our elected officials admit their mistake and correct or get out of the way.

Tom
Reply

We’ve been exposing the facets for 10+ yrs and they haven’t even blinked yet let alone moved out of the way – how many times have you gone nose to nose with your MP and MPP on this “monument to stupidity”.

Betty
Reply

Lest we forget this all started in 2008 when Dalton McGuinty gave the Energy and Infrastructure portfolio to George Smitherman- the mastermind of e health and so many other boondoggles. Sadly all this wa$te is nothing compared to the destruction of rural communities in Ontario.

Tom
Reply

It started a long time before 2008 – try about 2003 or when Dwight Duncan was energy minister .

Sommer
Reply

The destruction of rural communities must be reversed. Humanity needs, more than ever, to reconnect with nature and experience both the spaciousness of the rural setting as well as the deep silence that those of us who consciously chose to live in the country have lost, because of industrial wind turbines and their infrastructure that were sited too close to homes.
It may be the agenda of governments to relocate rural people to ‘human settlements’/cities, but we simply can’t let this happen.
So on top of the ridiculous waste of money on this industrial wind turbine experiment, there will be the cost of answering to all rural people whose environments have been ruined by both audible sounds and infrasound radiation.

Andre Lauzon
Reply

By the time we are out of birds, bats, butterflies and bees it will be time to pay more billions of $$ to take down the windmills. Chiarelli, Wynne, McGuinty and friends may have left the Province by then………… They should leave NOW.

Lynda
Reply

McGuinty has already left the province according to the grapevine.

Tracy
Reply

Arrest and freeze accounts. Throw the bandits in jail. Let them prove their innocence.
Chiarelli’s “can’t convince them, confuse them…” doesn’t fly. Enough is enough.

Mike Jankowski
Reply

Re: how many times have you gone nose to nose with your MP and MPP on this “monument to stupidity”.

Multiple. Also 4 candidates in last election. Presented to councils and board of health. I am newer than some people but have Irish.

Barbara
Reply

This is a “Heinz 57 varieties ” situation anyway.

Grant
Reply

This is becoming unbearable.

Sommer
Reply

“Unbearable” is the word!

Elliott
Reply

What is the love affair between Ontarians and the liberals?

I don’t get it.

It seems it’s ok for the liberals to do literally whatever and no one as much as blinks an eye, while they continue to make deals that are completely moronic and 100% irresponsible, no planning, no economic constraints, no checks or balances, when do the people in Ontario wake up and say ENOUGH, get out of power Wynne and croonies.

Greg Latiak
Reply

At least back to the 1990s energy restructuring act — and the hired Enron, who were still industry darlings, to advise them. TOD rates, electricity trading, futures contracts for municipal power (which I gather they are still pushing)… all mechanisms to extract more revenue from the consumers. As uncle Bob is fond of reminding us, all this stuff is immensely profitable, just not for the power consumers of Ontario. When asking why they are doing this, remember, its not for you and me.

Tracy
Reply

Yes Tom, we have been voicing our concerns for years. I call it beating our heads against a wall.

Remember the days when physical abuse was acknowledged with no regard to psychological abuse? We now know that psychological abuse is just as, if not more, detrimental than physical.

We are at war with the wind industry; the industry being enabled by the government. In some cases the industry and the government are one and the same.
In this day and age, we have been conditioned to fight our war with words. Our words mean nothing. Yet, if we take up arms in a move towards resolution;,we are considered violent..for protecting ourselves.
Communication is the only tool we have. Good luck with that. The government has the power and sets the rules.
Hey Queen’s Park, I prefer the “gas chamber” thank you; much less pain. You couldn’t get away with that here in today’s world. Your game is well thought out. But.. in the end, we-rural Ontario, will rise to the top.
Karma’s a bitch, eh..

Lynda
Reply

The trouble is they (libs) ARE getting away with it! Can you imagine the psychological stress that people are enduring as their children are becoming victims of these turbine killing machines? The stress alone will kill them…stress has been linked to heart disease, cancer and a miriad of other illnesses. (Good thing we have ‘free’ healthcare eh? ROFL) Looking at fields of turbines brings to mind Edward Scissorhands! They are slowly cutting us up into small pieces as the fodder for big city hunger. Wynne is laughing at our efforts to kill her turbine babies. Too bad there isn’t such a thing as turbine abortion eh!

Johana
Reply

Tracy, you are a fountainhead, a wellspring of knowledge about the Industrial Wind Turbine [IWT] industry over these past [since Dec 2004] eleven years of exposing the AIM PowerGens, IPCs, GDF – SUEZs, Mike Crawleys of the CanWEA conglomerates.

At first, your concern was about the Mississippi Migratory Flyway and the Atlantic Migratory Flyway, both of which cross our county bringing thousands of migrating birds, bats and butterflies to rest for weeks before continuing either to their breeding grounds or to their wintering sites.

But in 2005, when we humans found ourselves being severely affected, you more than most, we tried to maintain an action group, Norfolk Victims of IWTs, and wrote mountains of communications to the IWT developer, to our Norfolk Council, to our MPP and to our MP, and STILL we KEEP ON, KEEPING ON.

In spite of the overwhelming evidence from around the globe that we are being harmed by the 66 Erie Shores and 18 Clear Creek/Cultus/Frogmore IWTs, all the POWERS THAT BE, have turned a deaf ear to our attempts to escape the monstrous harm which they have inflicted on us.

We need a PUBLIC INQUIRY at both the federal [which encouraged IWTs through the Wind Power Production Incentive], provincial [which gave subsidies to IWT developers] and municipal levels [which granted zoning changes to AIM PowerGen for e.g..] to expose the whole fraudulent, sorry scam.

Barbara
Reply

The best chance now maybe with what the American people do about this situation. Difficult for Canada to go it alone without U.S. support.

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