The big Ontario power-plant question

(Dec. 3, 2012) Will the Liberals ever explain their botched site-selection process?

By Andy Frame for the Hamilton Spectator, published on Dec. 3, 2012

In early 2013, the Liberal party of Ontario will have a new leader and the province will have a new premier.

The legislature will eventually start a new session, but the old question will still be there. The Conservative and the NDP opposition parties are determined to force the government to bring out all the details of the McGuinty Liberals’ power plant selection process, which they claim will cost taxpayers up to $900 million.

Let me take you back five years, when the Ontario Power Authority (OPA) first announced a plan for the GTA to locate new gas-fired power plants. A meeting hosted by the OPA at the Mississauga Centre and attended by more 500 people explained the need for more power supply in the GTA, and the process to find one or two new sites for gas-powered generation. An OPA manager explained the selection process and listed 10 sites that were under consideration. Local meetings were to be held to meet with groups and explain the need, and site selection criteria.

This writer attended that first meeting and after the formal proceedings had concluded, asked the OPA director in charge of site selection why the site of the former coal-fired Lakeview Generating Station in Mississauga was not on the list of sites. The answer came “Lakeview is not under consideration.” I again asked, and said “Lakeview is not in a residential area, it has a gas power supply, a switchyard, and transformers and transmission ties to the province.” Again the answer: “Lakeview is not under consideration.” And she walked away.

As events unfolded, the OPA announced the selection of a site in east Oakville and a second site in mid-Mississauga. The Oakville site had good facilities, but was located near a residential area. A well-organized, well-funded protest group resulted in intense pressure on the government. In 2010, the government, not the OPA, announced the cancellation of the site. Some say it was to save the seat of the Oakville MPP. Everyone knew there was a contract with Trans Canada Corporation. Many estimates of $200 million were made for the cancellation costs.

The Mississauga plant was well under construction when the government, under pressure of local groups, announced the cancellation of that plant. The estimated cancellation cost was $140 million. The announcement came with a comment by the government: “We no longer need the power.”

Now 2012. No Oakville plant. No Mississauga plant. The government was under pressure from opposition parties to reveal the amount of the Oakville cancellation. They announced that the cancellation would cost $40 million, because they had made an agreement with Trans Canada to build a new gas-fired plant at Lennoxville, the site of a former oil-fired generation plant near Kingston. In addition, new transmission facilities would be built to connect the plant to the power centre in the GTA.

The question has to be asked again in this open forum: Why was the Lakeview site, in a non-residential area, with good facilities, “not under consideration?” I am openly asking: Was the OPA directed by an authority in the McGuinty government not to consider the Lakeview site? If so, why?

Opposition parties in the legislature have been pressing for the release of the documentation pertaining to the site selection. Some 36,000 pages were released, but many parts of the documentation were blanked out. The media and the opposition parties have been dissecting the information in this massive document.

The minister of energy has announced that the extra cost of the cancellations of the two plants and their replacement at Lennox, and also new transmission costs, is $240 million. Tom Adams, formerly of Energy Probe, estimated that it will cost at least three times that amount. Other independent consultants have suggested the additional costs to be $900 million.

Stand by to find out how all these millions of dollars in costs will be paid. Will it be an operational cost of OPA, which has the authority and responsibility to make decisions and allocate the cost to all hydro utilities? Or will the province pick up the costs and put it on your tax bill?

The government is trying to cut costs in many other areas. You can be sure that they won’t pick up the costs of the hydro plants. It will be an expense for OPA and end up on your hydro bill.

What has been happening for at least five years is now evident. The McGuinty government has made political decisions that override power planning decisions and these decisions have cost millions of dollars. The result is higher hydro bills for residential customers. Ontario industrial customers will have much higher costs, which will lower their competitive position, and the Ontario economy will suffer.

Will we finally get some answers with the new session of the Ontario Legislature in 2013? Will the opposition parties be able to force the release of the additional information and finally answer the question “Why not the Lakeview site?”

Andy Frame, P.Eng. lives in Hamilton. He is a consultant in the electrical power industry and was formerly a senior adviser, electric utilities, Ontario Ministry of Energy and a past municipal hydro chair and chair of the Ontario Utility Association.

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