Energy Minister Chiarelli’s $210 million “cup of coffee”
Just yesterday in the Legislature, Ontario’s “energy literate” Minister of Energy Bob Chiarelli responded to a question from Lisa MacLeod, the PC Energy Critic. From the record:
Hon. Bob Chiarelli: Mr. Speaker, the member for Nepean-Carleton is on another wish hunt—W-I-S-H. She’s wishing that her imagination comes true. The information that was provided in committee and provided to the Auditor General was quite clear, and she chooses to misconstrue it. “Misconstrue” is not unparliamentary, Mr. Speaker, because I actually looked it up in the dictionary. The word “misconstrue” means “to fail to understand the true or actual meaning.” And there are a number of synonyms. The others synonyms are “to misapprehend, to misconstrue, to misinterpret, to mis-know, to misperceive, to misread, to miss, or a mistake.” I would choose the word “mistake,” because the chair of the OPA was at committee. He showed the calculations on the costs, and they actually amount to $1 to $2 per year over 20 years, Mr. Speaker. She doesn’t want to admit it. She chooses to misconstrue it and she wants to obfuscate the truth.
That remark received considerable attention from the media and when questioned by them Minister Chiarelli added this disingenuous remark, “It’s’ less than a cup of Tim Horton’s coffee a year.”
Well, Minister Chiarelli is right, but he is only referring to the cost to ratepayers from the Ontario Power Authority’s direct costs — it ignores all of the other costs identified by the Auditor General.
Under the terms of the “Memorandum of Understanding” between the OPA and TransCanada, the OPA was obliged to purchase the gas turbines as noted in the following taken from that Memorandum:
2. Within ten (10) Business Days following the execution of the Reimbursement Agreement and in
accordance with the terms thereof, the following payments shall be made to TCE by the OPA:
(a) $210,000,000 in respect of TCE’s costs relating to the acquisition of gas turbines for the
OGS Facility and all contracts related thereto, including transportation, carrying, storage,
foreign currency hedging, procurement, design and engineering costs and the initial spare
parts;
The problem with the OPA acquiring those turbines is that the Act that created the OPA doesn’t allow them to acquire “capital” assets related to the production of electricity. The OPA’s purpose in life is to “plan”! That meant that the acquisition cost was immediately tossed into that big pot referred to as the Global Adjustment which is billed out to ratepayers.
So let’s look at that “$2.01” cup of coffee!
According to the Yearbook of Electricity Distributors for 2012 on the Ontario Energy Board’s website ,there were 4,893,782 Total Customers . If they each paid $2.01, the annual cost would be $9,836,502 and over 20 years is approximately $197 million which is remarkably close to what the OPA paid for those gas turbines.
It is interesting that the Minister used the word “misconstrue” during the debate (he was censured by the speaker for its use) as that is exactly what he continues to do with the energy file by telling only partial truths.
This cup of coffee is tainted. The ratepayers of Ontario recognize that each and every time they open their bills from their local electricity supplier. Minister Chiarelli should revisit what he tells the public because they understand the meaning of “misconstrue” much better than he does!
©Parker Gallant,
December 5, 2013
The views expressed here are those of the author and do not necessarily represent Wind Concerns Ontario policy.
Reblogged from Wind Concerns Ontario
Ottawa Wind Concerns 