Gas Plant move will cost us $1,200,000,000.00! ……… no matter what Wynne’s “accounting shenanigans” state!

Posted: May 3, 2013 in Uncategorized

Flat out! This seat-saving expense  using tax payers dollars to prop up their failed Govrenment will cost Ontarians 1.2 BILLION dollars when all is said and done.

By quoting 1/2 that price is an insult and downright lie by the governing Liberals and they should be charged like a bunch of criminals for stealing our hard earned dollars to keep their jobs!

For Horwath to agree to aid and abet this “team of fiscal terror” in their continuing rape of Ontario is also as repugnant!

Gas Plant Moves Cost $1.2 Billion but “Lucy” Math saves Liberals $595 million

Colin Andersen, CEO of Ontario Power Authority (OPA), testified April 30, 2013 before the committee investigating the cost of moving the gas plants from Mississagua and Oakville. He arrived armed with a study prepared by a firm hired by the OPA to put a price on that latter move. The Liberals have continually stated the taxpayer cost of the Oakville move was $40 million.

When Andersen handed in the 70 page document this writer found it very strange that the OPA, founded by the Liberals to do “long-term” planning for the energy sector, was unable to develop it’s own estimate of the gas plant move. They are all well paid civil servants (81 on the 2012 Sunshine List) yet they had to contract an outside firm for the report! The report, prepared by NERA Economic Consulting, put the cost of the Oakville move at $310 million. If one examines the calculations of how NERA arrived at that figure you realize that the actual cost of the move was $849 million but because the 900 MW gas plant will deliver power 5 years later then planned (2019 instead of 2014) NERA deducted $539 million, calling it, “Time deferral”. That amount represents the net revenue requirement (NRR) that would have been paid had the plant started producing power in 2014. The Auditor General granted the Liberals a similar dispensation but only to the extent of $56 million in respect to the Mississagua gas plant. Future obligations to ratepayers of $595 million have been pushed out 5 years. Perhaps an economist can justify that calculation but this retired banker has trouble understanding how you can save money by delaying acommitted purchase to the next day. 

The machinations behind the foregoing calculations could be applied to the savings that could be achieved if the government cancelled the planned addition of say 900 MW of wind and solar renewables as suggested by Cold Air which would equate to saving $4.3 billion. If we cancelled all of the remaining renewable energy planned, the Liberals could claim saving tens of billions.

To carry that “new math” calculation even further perhaps we could also apply it to the cost overruns of Darlington (generally reported as $10.5 billion by environmental not-for profits [ENGOs]). If two of the four Darlington units (1,750 MW) were delayed for 5 years (they were) at a price per megawatt hour (MWh) of $44 dollars (4.4 cents per kWh) that would have saved taxpayers $3.9 billion and if we agreed the accumulated interest on the Darlington delays cost 70% ($7 billion when interest rates hit 20%) then the “interest debt” (using “new math”), allocated to the Ontario Electricity Finance Corporation (OEFC) could be repaid through the saving achieved by cancelling some of the additional wind and solar generation that the Liberals plan to add based on their Long-Term Energy Plan. Goodbye, “stranded debt”!

To support the foregoing argument note that on average Ontario is presently exporting about 2,000 MWh each and every hour; so we don’t need new generation.

The “new math” used by NERA and the AG is not new! As a youngster I recall watching an episode of “I Love Lucy” in which Lucy and her husband Desi, agreed they needed new appliances. Lucy acquired the appliances for less then they planned to spend. With the money Lucy saved, she indulged herself. When her husband found out she saved them some money he was delighted but when she confessed to spending the savings on herself he was awe struck. He ranted that she spent money that they didn’t really have.

The homage to that particular episode of “I love Lucy” seems to have been well and truly executed by the bureaucrats of Ontario and presumably endorsed by the Liberals as it has allowed them (so far) to avoid the estimated costs of the gas plant moves staying below that magic $1 billion mark despite many electricity experts indicating costs were much higher.

As a ratepayer and taxpayer in Ontario I feel the exasperation that Desi felt those many years ago. Lucy, aka, Chiarelli, Minister of Energy, is running the Ministry with the same illogical budgeting style present in that old TV comedy—he is just having trouble generating a laugh.

Parker Gallant,
May 2, 2013

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s