Fool­ish, hor­ri­ble con­tract – if it’s true


It was nice to hear from On­tario En­ergy Min­is­ter Glenn Thibeault on Tues­day that On­tario will only buy hy­dro power from Hy­dro Que­bec if it’s a good deal for the tax­pay­ers of On­tario.

Sadly, his re­solve comes al­most a decade too late to do On­tar­i­ans much good, be­cause that’s never been the pol­icy of the McGuin­tyWynne Lib­eral gov­ern­ment up to now.

This given that they’ve al­ready wasted $9.2 bil­lion of our money pay­ing in­flated prices for un­re­li­able and un­nec­es­sary wind and so­lar power for 20 years — ac­cord­ing to Au­di­tor Gen­eral Bon­nie Lysyk.

In­deed, where was the Wynne gov­ern­ment’s con­cern for On­tario tax­pay­ers and elec­tric­ity ratepay­ers when the Lib­er­als were sign­ing those deals — now pay­ing On­tario wind de­vel­op­ers twice the U.S. av­er­age price for wind power, and 3½ times the U.S. av­er­age price for so­lar power, ac­cord­ing to the au­di­tor gen­eral?

Why did the 20-year con­tracts they signed with these de­vel­op­ers re­quire that we had to buy their elec­tric­ity first, which means the en­tire elec­tric­ity gen­er­a­tion sys­tem is now run­ning less ef­fi­ciently than it should, in or­der to ac­com­mo­date un­re­li­able and ex­pen­sive wind and so­lar power?

That’s be­cause when we aren’t pay­ing wind and so­lar de­vel­op­ers out­ra­geous, locked-in prices to pro­duce elec­tric­ity for 20 years, we’re pay­ing them out­ra­geous, locked-in prices not to pro­duce elec­tric­ity, or we’re sell­ing other, cheaper forms of green en­ergy, like our own hy­dro power, at a loss to Que­bec and the U.S. This is hap­pen­ing, year in and year out, be­cause On­tario has a huge en­ergy sur­plus caused in part by — wait for it — high elec­tric­ity prices, which have dou­bled over a decade to be­come the high­est in Canada due to the Lib­er­als’ reck­less en­ergy poli­cies, which have gut­ted much of the prov­ince’s man­u­fac­tur­ing sec­tor.

Thibeault’s po­si­tion on Tues­day was in­tended to knock down a story in the Que­bec news­pa­per La Presse.

It said the Wynne gov­ern­ment had signed yet an­other fool­ish elec­tric­ity con­tract (my word, not La Presse’s), this time with Hy­dro Que­bec, to sup­ply 6% of On­tario’s en­ergy needs for the next 20 years, by buy­ing Que­bec hy­dro power at in­flated prices (6.12¢ per kWh, com­pared to the go­ing rate of 4.8¢ per kWh), with a 2% an­nual es­ca­la­tor cause for the du­ra­tion of the con­tract.

Thibeault’s of­fice de­nied the La Presse story that On­tario had agreed to the deal, re­leas­ing a copy of a July 27 let­ter he sent to Que­bec En­ergy Min­is­ter Pierre Ar­cand.

It said Que­bec’s of­fer was un­ac­cept­able be­cause it would cost the av­er­age On­tario house­hold $30 more per year in elec­tric­ity bills and re­quire On­tario to cur­tail its own wind, so­lar and hy­dro power in or­der to buy hy­dro power from Que­bec.

But Thibeault’s let­ter also made it clear the On­tario gov­ern­ment is con­tin­u­ing to ne­go­ti­ate with Que­bec to buy a lot more of Que­bec’s hy­dro power than the two gov­ern­ments have pre­vi­ously an­nounced.

On the face of it, the terms of the deal ob­tained by La Presse would be hor­ri­ble for On­tario, which tends to make Thibeault’s ex­pla­na­tion that the prov­ince had re­fused to sign it cred­i­ble.

But the con­cern is that the McGuinty-Wynne Lib­er­als have signed so many other aw­ful elec­tric­ity deals — in­clud­ing the one for green en­ergy from South Korea’s Sam­sung Corp., which they have since had to dra­mat­i­cally down­size — that there’s al­ways the worry On­tario tax­pay­ers and elec­tric­ity ratepay­ers will get fleeced yet again.

In­deed, that’s the scari­est thing of all. Brent Sch­midt pad­dles back to shore in the Ot­tawa River dur­ing some mild weather in the cap­i­tal ear­lier this year.


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