Ont. Liberal hydro decisions cost you billions extra

Auditor general says planning process has effectively broken down over the past decade

December 2, 2015   by CANADIAN PRESS

Auditor general says distribution system was consistently one of the least reliable in Canada

Auditor general says distribution system was consistently one of the least reliable in Canada

TORONTO — Auditor general Bonnie Lysyk says Ontario electricity customers paid $37 billion for the Liberal government’s decisions to ignore its own planning process for new power projects, and warns that’s just one factor driving up hydro rates.

“We found the electricity planning process had effectively broken down over the past decade,” she said. “Instead of following the legislated process, the Ministry of Energy itself effectively assumed responsibility for electricity planning.”

The ministry issued two policy plans and 93 directives that “did not fully consider the state of the electricity market” and at times went against the advice of the Ontario Power Authority.

“Ontario electricity ratepayers have had to pay billions for these decisions,” said Lysyk.

The electricity portion of hydro bills rose 70% between 2006 and 2014, which Lysyk said cost consumers $37 billion dollars in so-called Global Adjustment payments to generators – and will cost ratepayers another $133 billion by 2032.

Energy Minister Bob Chiarelli said the Global Adjustment is needed to encourage more companies to get into energy generation, and doesn’t mean people paid too much for hydro.

“The words over paying don’t enter into the equation,” he said. “What it is is the true costs of providing generation in the province of Ontario, which is added onto the wholesale price because it is not sufficient to cover off the generators.”

The auditor found hydro customers will also pay a total of $9.2 billion more for wind and solar projects under the Liberals’ 20-year guaranteed-price program for renewable energy than they would have paid under the old program.

Chiarelli defended the Green Energy Act as a “Wayne Gretzky move – skating to where the puck was going to be” in terms of climate change, and said the government had developed a better planning process for future energy projects.

The lack of a co-ordinated planning process resulted in an additional cost of $408 million to pay generators for the increased power they produced, or for not producing power at the request of the system operator.

Ontario’s average annual electricity surplus between 2009 and 2014 was equal to the total power generation capacity of Manitoba, and its base load generation will exceed Ontario’s demand by an amount equal to Nova Scotia’s power needs for five years.

In her report, Lysyk said the reliability of Hydro One, which owns the transmission grid and is also a local distribution company for 1.3 million customers in rural and northern Ontario, has “worsened considerably.” Its distribution system was consistently one of the least reliable in Canada, she said.

“There is a risk of more power failures because Hydro One is not replacing transmission assets that have exceeded their planned useful service life,” she warned.

The Liberals have said one reason they’re selling 60% of Hydro One, in addition to raising money for infrastructure, is to make the utility a more efficient company.

Ontario’s last coal-burning station in Thunder Bay was converted to biomass, but it has to import wood products from Europe to burn, pushing the cost of the electricity it generates to 25 times higher than other biomass generators.

The auditor’s annual report is also critical of the way the Liberals hand out taxpayers’ money.

Eighty per cent of $1.45 billion in funding from the Ministry of Economic Development and Employment went to companies the Liberals invited to apply, but it couldn’t provide criteria used to select firms or say if they created jobs.

Nine other ministries gave out another $1.8 billion in funding for similar projects, but there is no co-ordination of the government spending, and no follow-up to see if the jobs created or retained still existed after the funding ended.

The Ministry of Finance gives over $1.3 billion in corporate income-tax credits targeted to economic development and jobs each year, but the Ministry of Economic Development “rarely considers these when determining which businesses to provide grants and loans to.”

The Ministry of Research and Innovation does not track the total amount of money invested by the government in research, nor does it evaluate the impact of research it funds after giving universities $1.9 billion over the past five years.

The auditor also takes the Liberals to task for poor oversight and inconsistent service levels at Community Care Access Centres and Local Health Integration Networks, and for not responding quickly enough to reports of critical incidents at the Ontario’s 630 long-term care homes, which get $3.6 billion a year in provincial funding.

© 2015 The Canadian Press

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2 Comments » for Ont. Liberal hydro decisions cost you billions extra
  1. Annoyed Citizen says:

    SO many things wrong with this….Not the least of which being that we’re importing wood from Europe. To burn! What is wrong with us? Wouldn’t it be cheaper to just burn coal and put even better scrubbers on the stacks? (Overlooking the fact that Ontario HAD the cleanest coal-fired plants in the world….)

  2. Lucy Quaglia says:

    We are ll guilty of this, because if the Conservatives did not have their cousins in Ottawa shredding our very own idiosyncratic as a nation we could have have a different kind of govt in this province now, same with Hudak, who acted as a jerk thinking corruption was going to scare people in the cities and vote for him no-matter what.
    Again, people do not want to be put down from a bunch of severely out in the field flat who decide they know more for their families and neighbours.

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