Secret agreements lead to abuse of power

"Locally we have two irreversible boondoggle secret contracts that will cost taxpayers and ratepayers millions."

Let me start on the perimeter and slowly bring this into focus.

Ontario Hydro made secret deals with the power industry. When concerns were first raised about the costs of these secret deals the then Provincial Government said it would only cost ratepayers about $40 million.

Citizen groups used court challenges to free information from the clutches of government. The latest estimate is $500 million and Kathleen Wynne, the current premier of Ontario, has now publicly apologized for the money wasted on these secret deals. A very recent story is suggesting the secret deals could reach billions.

BC Hydro recently asked for a 40 per cent rate increase  but our provincial government has dialed that back to 30 per cent. But how much of that is to pay back money wasted on secret deals?  The provincial government and Hydro are to be commended for canceling several high cost run of river and other power purchase agreements. However, how many uneconomic contracts weren’t cancelled and how much will require massive subsidy for many years into the future?

Locally we have two irreversible boondoggle secret contracts that will cost taxpayers and ratepayers millions.

The first one of these is the secret agreement that Celgar has with BC Hydro. For reasons that only a bureaucrat can justify, the power qualifies as “green power” so Celgar receives a premium from BC Hydro.

But taxpayers and ratepayers get fleeced because Celgar fully recovered all capital expenditures related to this project. The American parent company has stated there could be a 50 per cent annual return on the grant money.

The second secret agreement relates to the Waneta expansion that is presently under way. The project increases generating capacity by around 50 per cent, but actual power generated will be largely unchanged for eight or nine months per year. A recent news story stated the expansion will only use surplus water in the spring that the present Waneta dam can not during spring freshet.

I have calculated that there is surplus water from Teck’s water license for about four month per year.  True economic payback is questionable, but was justified based on excessive power rates. Fortis, the unregulated company, has a secret agreement with Fortis, the regulated local utility, to purchase this power at these secret excessive rates.

Hello Ontario. Hello BC Hydro. We as local Fortis customers are the next group to be victimized by secret power purchase agreements.

Norman Gabana


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