Martin Regg Cohn: Counting the cost of NIMBYism

Myopia, mania for privatization are the real power plant scandal

QUEEN’S PARK Now that the auditor general has exposed the stench over the cancelled gas plant in Mississauga, Ontarians have every right to be angry. Let me count the ways:

Angry at the Liberals for overplaying their hand at election time — and downplaying the total $275 million cost until they were caught out.

Angry at the fledgling local contractor who constantly underdelivered on the stalled electricity project — yet overstated its costs when extorting more money from taxpayers.

Angry at the U.S. hedge fund that overcharged with an astonishing 14 per cent interest rate — then aggressively litigated when it had taxpayers trapped. Angry at the Ontario Power Authority for overestimating our electricity needs all along — then overpaying to dig the government out of a hole.

Angry at the opposition parties for whipping up local fears about the plant location — then pouncing over the cancellation costs.

And angry at ourselves for letting it all happen — lapsing into NIMBYism and then complaining about the costs of relocation.

Only the auditor general’s office has clean hands and a clear head on this muddled story. Everyone else has their fingerprints on what reads like a case study in human decision-making gone awry.

The political, emotional, hysterical and financial miscalculations will provide fodder for the media and the (ever-earnest) opposition parties for months to come. The gas plant mess may yet prompt NDP Leader Andrea Horwath to reconsider her tentative support for the upcoming Liberal budget, plunging us into another election.

She has not yet pulled the plug on the minority government for pulling the plug on the gas plant. But the NDP leader stresses she will listen to the people on this. Let’s not go there. Refighting the gas plant decision would pile irony upon insanity.

The last thing this province needs is another wrong-headed election call to revisit the last wrong-headed election decision in late 2011, when the Liberals cynically cancelled the Mississauga power plant in midcampaign to win re-election.

Horwath has an opening, however, to use the Mississauga mess as a teachable moment: to illustrate how the ideology of privatization trumps practicality. It was the Liberal embrace of privatization in 2004 that drove the government to contract out any new power generation — from gas-fired plants, solar and wind — to the private sector, explicitly sidelining government-owned Ontario Power Generation.

Think about that: OPG happens to have decades of experience in siting power plants — including nuclear reactors — across Ontario while engaging with local communities (ever notice our nukes aren’t plagued by active NIMBYism?). It also has enormous fiscal capacity to borrow money for power plant construction without resorting to parasitical U.S. private equity funds charging nearly criminal rates of interest and penalties. Instead, the Liberals bought into the f antasy that privatization equals efficiency. And the shibboleth that the private sector always delivers on time and on budget.

Not in Mississauga, where the private sector ran out of time — and money. Eastern Power won the contract by bidding low for the project, but turned out to be a high-cost operator: Not only did it borrow money at 14 per cent (compounded quarterly), as the auditor noted incredulously, it demanded to be compensated for supposedly paying an administrative assistant at the rate of $110,000 a year.

So much for efficiency. As for timing and diplomacy, Eastern Power failed to win over the local community, ultimately turning to the Ontario Municipal Board to overrule a zoning decision by Mississauga council.

We can weep all we want about wasted money, Liberal duplicity and financial skulduggery — notably the government’s fanciful claim that relocation would cost “taxpayers” only $190 million (leaving ratepayers on the hook for another $85 million). But we have only ourselves to blame for falling under the spell of the privatization mantra years ago.

At some point, this so-called power plant scandal will run out of steam, while the bills keep piling up. Never mind the seemingly scandalous amounts of money that have gone down the drain to bury a gas plant. The real electricity scandal was our own woolly thinking — a highly charged blend of NIMBY myopia and privatization mania.