OPA says memo warned of additional costs for cancelling gas plants

Moving the Oakville plant to Napanee will need transmission lines worth about $200 million by 2019 instead of 2029.

March 20, 2013   by The Canadian Press

TORONTO – The Liberal government would have seen a memo showing the costs for cancelling the Oakville gas plant would be higher than $40 million, a top executive of the Ontario Power Authority told a legislative committee.

Moving the Oakville plant to Napanee will mean new transmission lines worth about $200 million will be needed by 2019 instead of 2029, and there were other costs as well associated with the cancellation, testified OPA vice-president JoAnne Butler.

She said there were a number of gas and electricity connection costs that were specific to the project.

“There were other costs associated with gas services, and there was a cost associated with us taking on the gas demand and management services. They were all outlined in the memorandum of understanding,” she said. “They (the government) signed the memorandum of understanding with TransCanada and knew we had other costs coming,” she said.

Butler, who did not offer any additional dollar figure on the potential cost of cancelling the Oakville gas plant, said David Livingston of Infrastructure Ontario, later Dalton McGuinty’s chief of staff, took the lead on negotiations with the project’s developer, TransCanada Enterprises.

Energy Minister Bob Chiarelli, who admitted for the first time earlier this week that the estimated $40 million tab “could be wrong,” made more confusing remarks.

“They could be right,” Chiarelli said to opposition jeers. “They could be wrong means they could be right. That’s the truth.”

The Progressive Conservatives and New Democrats have always disputed the $40 million figure, especially after the Liberals said it cost $190 million to scrap another gas plant in neighbouring Mississauga just days before the 2011 election.

Premier Kathleen Wynne told the opposition to wait for the auditor general to complete his investigation to find out the actual cost of cancelling the gas plants.

“The auditor general is going to bring a report and, as the minister has said, there may be differences with what we have said in the past,” said Wynne.

The New Democrats said the Liberals should be able to produce the cost figure now.

“Once again, the people see their government make a clear commitment about costs, only to hear later the same government backtrack,” said NDP Leader Andrea Horwath. “Does the premier think it’s acceptable that they can’t get a straight or consistent answer from their government on the true cost of this gas plant debacle?”

In earlier testimony Tuesday, Peter Wallace, the secretary of cabinet and Ontario’s top public servant, said he asked the Attorney General’s office to investigate an allegation a political staffer told the OPA which gas plant documents to release to the committee, but the investigation was inconclusive.

“They had not been able to find any concrete evidence to substantiate the allegation, that the individual involved appeared to be truthful, and she appeared not to have, in her own mind, offered specific and highly inappropriate direction to the Power Authority,” Wallace testified.

The Tories said there’s no doubt Liberal political staffers told the Power Authority to withhold some documents on the cancelled projects.

“The OPA was directed by the political staffers to indeed conceal documents. We know that for a fact,” said PC energy critic Vic Fedeli holding up a document that was mostly blacked out. “We know that there has been 100 per cent political interference in this, so it’s hard to believe any number that we’re given.”

The first committee witness of the day was Oakville Mayor Rob Burton, who said no other community should face the threat of having a gas-fired generating station built within 1,500 metres of homes, schools, a hospital and the busy QEW highway.

“The problem here is a bad process, and every community in the province is at risk from this process until and unless the legislature changes it,” warned Burton.

The OPA ignored the community’s concerns about the environmental and health impacts from the gas plant, added Burton.

“Whatever the actual cost, it will be far less than the health, environmental and safety costs” would have been in Oakville, he said.

In addition to the auditor general’s investigation into costs, the justice committee is probing all aspects surrounding the decisions to cancel the gas plants, which the opposition parties say helped save Liberal seats in the communities west of Toronto.

©The Canadian Press