Haste makes waste.
Premier Dalton McGuinty’s Liberals’ fast tracking of green energy projects will cost electricity ratepayers more money in the long run, says Auditor General Jim McCarter.
In his 460-page annual report to the Legislature released Monday, McCarter castigated policies that were a cornerstone of McGuinty’s re-election in the Oct. 6 vote, including Grit claims of 50,000 green jobs being created.
The auditor general found billions of dollars in solar and wind projects were approved without appropriate oversight, including and regulatory and planning procedures.
“While this helped these projects get off the ground quickly, their high cost will add significantly to ratepayers’ electricity bills in the future,” McCarter told reporters Monday.
He urged the government and its agency, the Ontario Power Authority, to conduct a “cost-benefit assessment of the progress made to date” in order to “strike an appropriated balance between the promotion of green energy and the price of electricity in Ontario.”
Hefty subsidies of cleanly generated power have helped McGuinty’s government create 20,000 jobs in the sector with another 30,000 expected by the end of next year.
Of those 50,000 posts, however, the auditor general concluded 30,000 are likely to be short-term construction jobs.
“A majority of the jobs will be temporary. The 50,000-job projection included new jobs but not those jobs that would be lost as a result of promoting renewable energy,” the report said.
As well, McCarter found the feed-in tariff program (FIT), which pays a premium to generators of green electricity, will add $220 million a year to hydro bills.
The controversial Samsung deal, which will pay the South Korean consortium $110 million over 20 years over and above the already hefty FIT premium in exchange for $7 billion in investment, was done with “no formal economic analysis … to determine whether the deal was prudent.”
“Neither the OEB (Ontario Energy Board) nor the OPA was consulted about the agreement,” the report said.
“We noted that the normal due diligence process for an expenditure of this magnitude had not been followed,” the auditors noted.
“We expected but did not find that a comprehensive and detailed economic analysis or business case had been prepared.”
On the debt-retirement charge ratepayers have been forking over on their electricity bills to cover the old Ontario Hydro’s residual stranded debt since 2002, McCarter said the government needs to come clean on how much is still owed given that $8.7 billion has already been collected on an original amount owing of $7.8 billion.
The provincial Electricity Act requires the government to reveal the debt from “time to time” and that time is now, McCarter urged.
“The minister (of finance) should make a formal determination of the residual stranded debt in the near future and make this determination public.”
The debt charge was an issue in the recent election with Progressive Conservative Leader Tim Hudak claiming the debt has been retired and promising to take it off hydro bills.
But the finance ministry said in its response to the auditor general that it estimates the debt retirement charge must remain in place until “sometime between” 2015 and 2018.
It’s hard to pin down the amount left because the calculation includes forecasting future revenues from Ontario Power Generation and Hydro One, whose profits have been “lower than expected” by factors such as cost overruns on OPG’s massive Niagara tunnel project to create more hydroelectric power from the famous falls.
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