Wynne's $50 billion power spend
Ontario Energy Minister Glenn Thibeault claimed his government spent $35 billion fixing a broken electricity sector since coming to power in 2003. Premier Kathleen Wynne says it was $50 billion. But neither of them provided an accounting as to exactly what the money was spent on, and how it benefitted ratepayers.
Thibeault’s $35 billion would represent spending $8,000 per residential ratepayer; Wynne’s $50 billion $11,000 per ratepayer. Bear that in mind as you travel through my computations. Some of these are estimates from reasonable and reliable sources. The spending, initiated via more than 100 directives issued by a succession of Liberal energy ministers over last 12 years, often had no connection to fixing anything, or generating electricity.
First we have our “frills and shiny baubles” spending category, essentially money spent that neither created new generation nor improved transmission nor reduced blackouts or brownouts. Spending on “smart meters,” which Ontario’s Auditor General in her report of December, 2014, concluded was basically wasted since “many of the anticipated benefits of Smart Metering have not been achieved and its implementation has been much more costly than projected.” $2 billion
The smart grid was supposed to work in conjunction with smart meters. Consumers are all billed for the costs of developing the smart grid but the benefits accrue to only a few select individuals and companies. $1.2 billion
Closing the coal plants required Ontario Power Generation to write off the remaining value of the plants with the last one closed in 2014. $600 million
Costs of conservation programs, in which some consumers are paid to not consume while the costs between $300 million and $400 million annually are passed on to March 31, 2017 will total approximately 2,400 MW at a capital cost of $2.6 million per MW. $6.2 billion
Transmission spending by Hydro One to connect wind and solar to the grid and for embedded connection expenditures. $5 billion
Total spending for “unreliable and intermittent”: $21.4-billion.
Our third category is “photo-op generation,” money spent on large hydro infrastructure projects producing little power but presenting politicians with great photo-ops. average of about 50 per cent of rated capacity. $2.6 billion
Total spending for “photoop generation”: $4.1-billion.
The fourth category is “value for money.”
Some of the claimed investments in generation actually provided some value. The Bruce Nuclear refurbishment of two units came at a cost of $4.8 billion but, according to Ben Chin, former VP of the Ontario Power Authority, the cost to ratepayers was limited since shareholders were forced to accept a portion of the over-budget costs. $3.4 billion
Grand total to the end of 2016: $36.3 billion
This estimate comes reasonably close to the $35 billion claimed by the energy minister.
But more spending is in the pipeline over the next 18 months, including another 500 MW of wind capacity with an estimated capital cost of $1.1 billion, 100 MW of solar for $300 million and 1,300 MW of gas at a rough cost of $900 million.
Total for what’s come: $2.3 billion.
Even if one includes the money still to be spent, the total investments (most of them wasted) are over $11 billion shy of the $50 billion Wynne claims has been spent.
We need to see Thibeault’s accounting, and Wynne’s too, to allow Ontario’s taxpayers and ratepayers to determine whether the spending has provided the claimed value for tax dollars. still to