Wind power costs more than it should says AG as Ontario citizens fleeced of $37 billion
Toronto Star, December 2, 2015
Ontario electricity consumers are being zapped by unnecessarily high green energy costs that could be worth billions of dollars and lousy service from Hydro One, which is currently being privatized, says auditor general Bonnie Lysyk.
In 14 value-for-money audits for her 773-page annual report delivered Wednesday at Queen’s Park, Lysyk took aim at the electricity sector on the eve of Energy Minister Bob Chiarelli’s announcement on next steps for the province’s aging nuclear reactors.
She also highlighted problems with everything from Ontario’s 47 children’s aid societies — including questionable executive expenses — community care access centres, and school buses to the bungled SAMS social assistance computer system and the lack of a plan for dealing with contaminated waste.
But much of her scorn was reserved for the energy ministry, which is overseeing the sell-off of Hydro One, the provincial electricity transmitter.
“Hydro One’s customers have a power system for which reliability appears to be worsening while costs are increasing,” said Lysyk, echoing Ed Clark, Premier Kathleen Wynne’s privatization czar, who has argued Hydro One can and should be a much more professionally run company.
“Customers are experiencing more frequent power outages, mostly because assets aren’t being fully maintained, aging equipment isn’t being consistently replaced and trees near power lines aren’t being trimmed often enough to prevent outages,” she said, lamenting that this will be her final audit of the company since it will no longer fall under her purview once it is private.
At the same time, Ontario’s controversial push to promote wind and solar energy is proving more costly than it needs to be, and energy conservation is proving unnecessarily expensive because the province has a surplus of electricity.
Lysyk estimated consumers could end up paying $9.2 billion more for renewable energy over 20-year contracts issued under the Green Energy Act with guaranteed prices set at double the U.S. market price for wind and at 3.5 times the going rate for solar last year.
“With wind and solar prices around the world beginning to decline around 2008, a competitive process would have meant much lower costs,” Lysyk wrote, noting the government ignored advice from the now-defunct Ontario Power Authority to seek bids for large renewable energy projects.
The auditor shines a light on energy conservation efforts slated to cost $4.9 billion from 2006 to 2020, saying the investment does “not necessarily” lead to savings because excess electricity must be exported at a loss.
“We are concerned,” Lysyk wrote. “Investing in conservation at a time of surplus actually costs us more.”
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