The Ontario government’s Long-Term Energy Plan released November 23, 2010, declares that the Liberals will fight the next election without changing course on their Green Energy Act.

Rather than dealing with the causes of the green rate shock now just getting started, the plan calls for an even larger portfolio of drastically expensive solar power, wind power and associated transmission lines than the Ontario Power Authority had called for in 2007.

Usually power system plans present their evaluation criteria, survey of options, and land on a preferred portfolio of investments with an atmosphere of detachment. Instead, this plan is grounded in inflated political rhetoric. The Liberal government’s track record is extolled at length ““ saving lives and cutting health care costs by vanquishing evil coal, revitalizing the economy through jobs and investment in electricity, and leading the world in progressive thinking and the protection of grandchildren. The contribution of all previous governments was of course negative in all respects.

The plan features obviously political but otherwise arbitrary policy zig zags. The government has decided to fiddle with the allocation of skyrocketing costs between consumers and taxpayers. Time of use rates are also the subject of manipulation, with a decision to contract peak price periods explicitly identified as responsive to, not costs, but public opinion.

The gas generation elements of the plan illustrate the contradictions Ontario’s power system is now torn between. The McGuinty government just cancelled a large, efficient modern gas project in Oakville, just west of Toronto. This project would have contributed several benefits, including east-bound transmission loading relief for power coming into the Greater Toronto Area. The government claimed that the Oakville gas plant cancellation decision was not driven by NIMBY politics but because the plant was no longer needed. This claim is directly contradicted by the new plan. The plan contemplates converting the 1970s vintage coal plants at Nanticoke and Sarnia to gas. These converted coal plants would burn at least 50% more gas per unit of delivered electricity as compared to the Oakville project just cancelled.

As an illustration of the risks and uncertainties in the near future, the government is assuming that Bruce Power will refurbish all of its remaining six unrefurbished reactors, notwithstanding the severe problems now being incurred with the two current and incomplete refurbishments. Now that Bruce Power has a clearer understanding of the true cost of Candu nuclear power, consumers can expect that Bruce will be unable to move ahead with new refurbishment investments without substantially richer compensation than it agreed to for the first two refurbishments.

Much of the reaction to the plan so far has focused on the projected cumulative impacts over the full 20 year horizon of the plan, such as the investment or rates figures. With the government facing an uphill battle in the polls heading toward next October’s election, the opinions of the current energy minister on what rates or investments will be in the year 2029 are of much less value than the outlook for the next couple of years.

The Ontario government’s official forecast is that residential rates will rise at about 10% per year over the next 3 years. This pace is significantly faster than had previously been estimated by independent analysts.

Even if the government planners had clear crystal balls, future investment figures are easily manipulated by wily communications advisors. For example, without details on the treatment of such factors as the treatment of interest during construction, investment and rate forecasts are impossible to understand accurately.

Ontario Hydro issued such a similar long term power system plan in 1989. It resulted in very little of lasting value. This plan looks to be headed for the same result.