Wynne's $50 bil­lion power spend

National Post (National Edition) - - FP COMMENT - PARKER GAL­LANT Parker Gal­lant is a re­tired bank ex­ec­u­tive who looked at his power bill and didn’t like what he saw.

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

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