Ontarians on hook for ineligible power generator costs: AG
• Ontario electricity ratepayers are paying millions for power generators’ ineligible expenses — including scuba gear and raccoon traps — and are footing the bill for large industrial companies’ savings, the province’s auditor general reported Wednesday.
Auditor general Bonnie Lysyk said in her annual report that the Independent Electricity System Operator ( IESO) hasn’t implemented repeated recommendations from the Ontario Energy Board, including one that could save ratepayers $ 30 million a year.
Lysyk also wrote that teachers and other school board employees are taking more sick days — almost 12 days each per year, up from nine days five years ago — that more families are waiting for social housing than are actually living in social housing, and that Ontario is paying tens of millions of dollars to send cancer patients to the U.S. for stem-cell treatments because the capacity doesn’t exist in the province.
In the energy file, a frequent target of Lysyk’s, her report looked at a program that pays power generators for fuel, maintenance and operating costs when the IESO puts them on standby to supply energy.
Nine generators claimed up to $ 260 million in ineligible costs between 2006 and 2015, Lysyk said, and about two- thirds of that has been paid back. One natural gas plant in Brampton “gamed” the system for about $100 million, the OEB has reported.
Generators claimed thousands of dollars a year for staff car washes, carpet cleaning, road repairs, landscaping, scuba gear and raccoon traps, “which have nothing to do with running power equipment on standby,” Lysyk wrote. One generator claimed about $ 175,000 for coveralls and parkas over two years, she said.
The standby program was originally started in 2003, when Ontario’s grid had supply issues, though now the province has surplus power.
The OEB found in 2014 that the standby program was relied on less than one per cent of the time to meet domestic demand, and has recommended repeatedly that it be scaled back to stop reimbursing generators for certain operating and maintenance costs. Doing so would save ratepayers $ 30 million a year, the OEB says.
Energy Minister Glenn Thibeault said the program and other similar ones play an important role in the electricity system.
“These are programs that ensure that when Ontario f amilies and businesses need electricity, it’s there for them,” he said in a statement. “If these programs were eliminated, reliability would be put at risk.”
The I ESO is working on a redesign of the electricity market, but Lysyk noted that some members of a working group advising the system operator about the redesign are employed by companies t hat have claimed ineligible costs. One member resigned his post on Friday.
Lysyk also found that as electricity charges for large industrial ratepayers decrease under a program that gives them savings when they reduce consumption during peak demand, that results in higher costs for residential and small business ratepayers.
The Industrial Conservation Initiative reduced charges for the large ratepayers by $ 245 million in the first 10 months of its operation in 2011, and that same amount was directly added to residential and small business electricity bills, Lysyk wrote.
Since then, electricity charges for residents and small businesses have nearly doubled, while they have decreased for large industrial ratepayers, the auditor found.
Lysyk also announced through her report that her office would be auditing the IESO’s books. That comes amid one of two accounting disputes the auditor has been engaged in with the Liberal government.
She recently accused the government of purposely obscuring the true financial impact of its 25-per-cent cut to hydro bills by keeping billions in debt used to finance that plan off the province’s books.
On the health front, the auditor’s report found that only 46 per cent of key biopsies to diagnose cancer are performed within the Ministry of Health’s 14- day target. It also found that a provincial target to provide radiation therapy in 48 per cent of cancer cases has not been met, with only 39 per cent of patients receiving the treatment in 2015-2016.