McGuinty’s creation, The Ontario Power Authority is just another layer of money sucking wasteful Public Sector employees that serve no other purpose than to de-stabilize what was once a strong and dependable Energy System in Ontario.
Strong words without warrant? I’ll let you decide. Drummond’s Report has declared very loudly and very clearly how badly in debt Ontario really is!
McGuinty’s mad spending and agency creation during his reign of 8 years plus is at the centre of this mounting debt, not our sacred services like Health and Education!…………quite possibly these two areas could use some efficiency tweeking but nothing has been proposed from Drummond like getting rid of OPA and any other McGuinty creations.
If the following doesn’t highlight this organization’s failings along with others mentioned like the crown corporation, Infrastructure Ontario, another of McGuinty’s “pipe dream” creations, then nothing will!
The Ontario Power Authority; helping to create the rural urban divide
Where you live in Ontario will have a bearing on what constitutes a “green” energy project by the Ontario Power Authority (OPA) under their program(s) and what they will pay per kilowatt hour (kWh) as the town of Bancroft discovered.
The Swedish retail giant IKEA installed solar turbines on their roof and are paid 70.3 cents a kWh ($703.00 per MWh) and the City of Markham installed solar panels on the roof of their Civic Centre with the help of a $2.4 million grant from the province and received the same 70.3 cents per kWh.
If you are the town of Bancroft, in the County of Hastings, however, you must borrow the money needed to refresh an old hydro dam on the York River, a Madawaska River tributary. The hydro dam opened at the turn of the 19th century and operated until 2003 producing hydroelectric power but shut down because the turbines had reached the end of their useful life. In 2001 the dam ownership was transferred from the public utility commission to a new town owned corporation, Bancroft Light & Power Corporation (BLPC) as mandated under the Electricity Act, 1998. BLPC decided to pursue refurbishment of the dam, commenced the process and hired a contractor to execute the work. The contractor set about refurbishing the dam and installing two 300 kW turbines which could potentially produce enough electricity to power 500 homes. This is more then double the installed combined capacity of the aforementioned solar panels on the roof of IKEA’s retail outlets and the Markham Civic Centre and would operate at a far higher output of rated capacity then the 13/15% of the solar panels.
As things progressed the installation of the turbines and the small adjustments to the dam created a number of delays and the start-up became a series of testing and adjusting the automated systems, etc. In all the dam operated for over 500 hours as those stop and start events occurred. As the project moved along BLPC applied for a contract with the OPA, anticipating that they would receive 11 cents a kWh, via the RESOP program, for the hydroelectric power they would deliver to the grid. The RESOP program was cancelled when the Green Energy Act was passed and the feed-in-tariff (FIT) program developed by the OPA promised 13 cents a kWh for hydro so the application was made to gain access to this higher pricing.
Concurrent with the application to the OPA, BLPC arranged to borrow $2 million from Infrastructure Ontario to pay for the refurbishment of the dam. “Infrastructure Ontario (IO) isa crown corporation wholly owned by the Province of Ontario and established by the Ontario Infrastructure and Lands Corporation Act, 2011.” So one of the McGuinty governments creations, IO, agreed to lend money to finance a project and they found it to be an acceptable risk while another McGuinty creation, the OPA, was expected to bless the project. The monies paid by Ontario ratepayers via the FIT contract would be used to retire the loan. Sounds ideal, and hydroelectricity, (unlike wind or solar generated power) can be ramped up or down to meet demand and isn’t subject to the wind blowing or the sun shining.
Unfortunately for BLPC, whose Board of Directors have been operating the plant (without pay), the OPA decided that because the dam had operated more then 500 hours (prior to the FIT application) it did not qualify under the FIT program and the town has been forced to sell the power generated via the Independent Electricity System Operator’s (IESO) hourly Ontario energy price (HOEP) market. The HOEP during 2011 averaged 3.15 cents per kWh ($31.50 per MW). The net result is revenue generated is insufficient to maintain the facility and service the debt to IO and may impact Bancroft’s municipal taxes as the town guaranteed a separate Community Futures Development Corporation loan.
Leona Dombrowsky, the Liberal incumbent lost her seat in the Ontario Legislature last fall and this may have had some bearing on that. The Liberals should have breached the rules on this one at minimal cost as compared to cancellation costs of the two gas generation plants in Oakville and Mississauga to retain those two seats.
Parker Gallant
February 24, 2012
February 26th, 2012 at 9:40 pm
I agree with you Tom that the OPA does serve a purpose and surely isn’t just a bunch of “stuffed shirts” sitting around the table playing Solitaire on their notebooks.
BUT, there should be an entire shake-up within the OPA and a whole new mandate should be re-written that gives them some responsibility and not just a “rubber stamp” for the use of a dumb politician like Smitherman was and McGuinty continues to be.
We both know that won’t happen, so “blow it up”……….shut it dow or whatever words one wants to use to end the waste; and then create a new agency with some hand picked “good fellows” from within OPA who actually know what they are talking about. Go through the list of employees making, not earning, over $100,000 per year and I think you’ll agree with me. It is bloated beyond all reason and by cutting the fat out of the OPA along with many many other Government created and sponsored useless entities we wouldn’t need a Drummond Report to save Ontario from bankruptcy!
February 26th, 2012 at 5:34 am
BGL,
I don’t agree with you that this article from Parker about the problems in Bancroft support your argument that the OPA has to be shut down. What Parker has demonstrated is that when the OPA has enough rope to act in the best interests of consumers, it does so. The problems with Ontario’s power system have not been caused by the OPA, but by the government’s decision to pursue a hybrid electricity market — one that is neither fully planned nor fully market-based. Under the hybrid market, we get a corrupt system that is the worst of both worlds. The OPA does a lot of work that is actually useful and would have to be done if the OPA was shut down. For example, they administer contracts and plan transmission requirements. You have proposed shutting down the OPA but you have not explained how the useful elements of the OPA’s current functions should be reorganized.Carelessly rhyming off a list of things to smash up does not create a viable electricity future.
Tom Adams