Liberals' reckless blunders to blame for hydro fiasco

Torontosun.com
May 11, 2017
By Lorrie Goldstein

Confidential cabinet documents on Ontario electricity rates drafted for Premier Kathleen Wynne’s government and released by the Progressive Conservatives Thursday reveal that the Liberals’ so-called “Fair Hydro Plan” is a farce and a mirage.

They demonstrate that there is no free lunch when it comes to electricity prices, no matter how the Liberals try to spin it.

Simply put, when you take on $25 billion in new debt to give hydro consumers an average 25% reduction on their electricity bills today, it means you’re going to hit them with even higher bills tomorrow.

Especially since the Liberals also say they will limit annual hydro rate increases to no more than inflation for the next four years, meaning rates will explode once this artificial lid comes off.

That’s assuming the entire plan isn’t another one of Wynne’s “stretch goals” (see auto insurance) that she will abandon if she wins next year’s election.

To be fair, hydro rates were going up no matter who won the 2003 election which brought the Liberals to power, because previous governments of all stripes had neglected the system.

But they didn’t have to skyrocket as they did under the Liberals.

That was due in large part to their reckless blunder into expensive and unreliable green energy, chiefly wind and solar power, which wasn’t needed to replace coal-fired electricity, the main justification the Liberals gave for skyrocketing hydro rates.

(The Liberals actually replaced coal with nuclear power and natural gas.)

In 2011, then auditor general Jim McCarter predicted that according to the Liberals’ own numbers, electricity rates would rise an average of 7.9% annually from 2010-2015 with 56% of that due to renewable energy.

Electricity, McCarter warned, would cost consumers $4.4 billion more than necessary over 20 years, because the Liberals failed to follow the advice of their own experts by offering overly generous, 20-year contracts to wind and solar developers.

By 2015, McCarter’s successor, Bonnie Lysyk, estimated the bill had soared to $9.2 billion, with the Liberals paying twice the average cost for wind power and 3.5 times the cost for solar power, compared to the U.S.

The Liberals paid almost $2 billion for smart meters, double the original price tag.

They cancelled two unpopular gas plants before the 2011 election (needed, in part, to back up wind power) at a cost of up to $1.1 billion over 20 years, according to the auditor general, 378% higher than the Liberals’ estimated cost of $230 million.

Because their policies created an energy surplus - as many manufacturing companies closed due in part to high electricity prices - the Liberals had to pay renewable energy developers not to produce electricity, since they were contractually obligated to buy their power first, or sell it at a loss to the U.S.

While the Liberals made blunder after blunder, the costs went up and up.

In 2013, they predicted residential electricity prices would rise 42% by 2018.

In the decade between 2006 and 2016 prices doubled, making Ontario’s electricity the most expensive in Canada, according to Hydro Quebec’s annual survey of major North American cities.

With their so-called Fair Hydro Plan, the Liberals aren’t solving the mess they’ve made of electricity rates.

They’re kicking it down the road and making it worse.