More “seat saving” by Liberals in Northern Ontario!!!!!!……

Posted: October 23, 2012 in Uncategorized

To use tax payer’s money on an Election Campaign is a criminal act! That is exactly why the Mississauga and Oakville gas plant cancellations are such a serious matter and contempt charges in Parliament are just the beginning.

No wonder Dalton has run away from the lime light of his electoral shenanigans……….more crops up each day.

The Oakville and Mississauga gas plant moves could run the tax payers a cool BILLION $$$$ but now we see that Northern Ontario is also in the mix with another massive expense to US to keep an MPP in power ,  Liberal MPP, Bill Mauro of Thunder Bay!!!!

Some Provincial Liberal Seats are Worth More

Over the past several months much has been written about the Ontario Liberal Party’s efforts to save four seats in the GTA by moving two gas generation plants. A “Google” search “Ontario Liberal seat savers” gets an astounding 12.2 million hits. The cost to the taxpayers and ratepayers for those moves vary from a low of $230 million (admitted by the Liberals) to a high of $1 billion.Forgotten or missed by the media was hundreds of millions spent by the Liberals to save another seat, in Northern Ontario. Liberal MPP, Bill Mauro of Thunder Bay, Atikokan squeaked in by a mere 452 votes over the NDP candidate. Mauro’s riding included two coal generating plants; Thunder Bay (306 MW) and Atikokan (211 MW). Both of these have been used sparingly (less then 5% of capacity) over the past several years, meaning emissions are miniscule; but both plants are being retained. Thunder Bay will be converted to natural gas due to an August 17, 2011 directive from Minister Duguid and Atikokan to biomass by a Duguid directive of August 26, 2010. Mauro also was facing stiff local opposition to a wind turbine development planned for Thunder Bay.
Duguid also granted $9.6 million to AbitibiBowater to expand their combined heat and power (CHP) plant (40 MW) and avoid closure of their mill due to high energy costs. AbitibiBowater will now be paid 13 cents per kWh for the power they produce and their Class A status will allow them to buy whatever power they need for their mill at a reduced rate compared to Class B ratepayers. If AbitibiBowater buy back all the power they could potentially produce they would save $19 million per annum (less fuel costs) or about $340,000 per job per year to support the 56 permanent jobs the former Energy Ministry said they will create.The AbitibiBowater grant however, pales beside monies to be spent on the two conversions. The capital cost of Atikokan is about $200 million for a plant that will produce electricity (when needed) at 8% of its capacity whereas capital costs of the Thunder Bay plant are an unknown. As OPG and the OPA have been unable to conclude a contract OPG have not announced the conversion costs. Based on Minister Duguid`s directive it will be similar to other gas contracts signed with the private sector, meaning costs will be a burden on ratepayers regardless of actual electricity production but, in this case, the public sector will be on the hook for the capital costs instead of the private sector. The other issue surrounding these conversions is that the electricity demand in Northwest Ontario has fallen with industrial and population declines and both these plants may not be needed.

Isolating the Atikokan conversion costs alone shows how far the Liberals went to retain MPP Mauro’s seat. At 8% of its capacity the capital costs will equate to 6 cents per kWh over a 20 year lifespan. Add in 6 cents a kWh for operations, maintenance and admin (OMA) and couple that with fuel costs (wood pellets) at say $200/ton (13 cents per kWh) and the cost of production at Atikokan jumps to 25 cents a kWh. Over the 20 year life of the plant Ontario ratepayers will pay $740 million for power produced at Atikokan (at the 8% level) that today would cost $237 million. The $503 million extra is equivalent to $1.1 million for each of the 452 votes that won the seat or $153,000 for every man woman and child in the town. Atikokan for decades was dependent on mining but that ended in 1979 when Steep Rock Iron Mines ceased operations. Since then the town’s population has dwindled, from 6,400 in 1966 to 3,300 in 2006. If one measures the cost to retain the 90 jobs at the OPG plant the costs work out to $280,000 per job per year.

OPG could have moved the 90 OPG employees and their families from Atikokan to another OPG location where they might contribute to keeping the costs of electricity down but the Duguid directive appeared to focus on shoring up Mauro’s support and winning a few votes at a huge cost to ratepayers.

The logic of the Liberal Party in managing the energy portfolio seems to be aligned to retaining MPP’s seats rather then with any concept related to planning or cost benefits that might accrue to ratepayers as has been demonstrated by this and the gas plant moves.

Parker Gallant,
October 23, 2012

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