The Auditor General’s (AG) 2015 is the most complete, concise, and accurate source available for folks seeking to understand what’s up with Ontario power rates.

The AG is gaining analytical strength. This report is much a stronger performance than the review of stranded debt in 2011.

The AG explains in painful detail how the government ignored its own experts on big ticket items. The pattern of negligently ignoring cost saving advice is so pervasive there is no way to avoid the conclusion that the government simply does not care about costs to consumers.

Over and over, the AG destroys core government talking points:

– “conservation is saving you money” (no, conservation is costing you money and the government-controlled agencies monitoring conservation are ordered to blow the government’s horn)
– “power exports are profitable” (no, power is being exported at a massive loss, salvaging pennies on the dollar)
– “Ontario is an international leader in renewable energy” (Ontario consumers are paying 2 to 3 times US costs for the same renewable energy)
– “we’re solving Global Warming” (Ontario’s transportation sectors and the industrial sectors are 4-5 times bigger CO2 emitters than power)
– “wind and solar are replacing coal” (wind and solar are unreliable, gas replaces coal)

In 2011, the AG issued a report saying the the government’s procurement practices for renewable energy were negligently wasteful. Here are some examples of those findings:

As a result, no comprehensive business-case evaluation was done to objectively evaluate the impacts of the billion-dollar commitment.

The Ministry said the (Green Energy) Act would lead to modest incremental increases in electricity bills of about 1% annually…In November 2010, the Ministry forecast that a typical residential electricity bill would rise about 7.9% annually over the next five years

the first long-term energy plan put forward by the OPA since its creation in December 2004 has not been approved by the OEB.

Earlier procurement programs for renewable energy included competitive bidding…the Minister directed the OPA to replace RESOP with a new Feed-in Tariff (FIT) program… these higher prices added about $4.4 billion in costs over the 20-year contract terms as compared to what would have been incurred had RESOP prices for wind and solar power been maintained

Many other jurisdictions set lower FIT prices

In February 2010, the OPA recommended cutting the FIT price paid for power from microFIT ground-mounted solar projects after the unexpected popularity of these projects at the price of 80.2¢ per kilowatt hour (kWh), the same price as was being paid for rooftop solar projects, became apparent

Given that demand growth for electricity is expected to remain modest at the same time as more renewable energy is being added to the system, electricity ratepayers may have to pay renewable energy generators under the FIT program between $150 million and $225 million a year not to generate electricity

Renewable energy sources such as wind and solar provide intermittent energy and require backup power from coal- or gas-fired generators to maintain a steady, reliable output.

The 2015 findings make it clear that the government comprehensively ignored these previous insightful observations.

In 2011, the theme of the government’s response to the AG was:

The Ministry of Energy welcomes the Auditor General’s recommendations and remains committed to providing quality policy advice and implementing the government’s decisions in a manner that is cost-effective and promotes system reliability and sustainability.

Now the theme of the government’s response to the AG is:

The Ministry agrees with the Auditor General’s recommendations. On October 28, 2015, the Minister of Energy introduced the Energy Statute Law Amendment Act, 2015 (Bill 135) that, if passed, would replace the current Integrated Power System Plan (IPSP) process with an enhanced Long Term Energy Plan (LTEP) process.

The AG’s has identified that the root cause of the rot in Ontario’s power system is government interference. The government responds that it is changing the law to take even more direct control over planning and ratemaking. What is the proper adjective to describe how messed up that is? Why is Bob Chiarelli still the Minister of Energy?

Post Script (2:45 pm): Podcast of interview with with Tom McConnell on CKTB radio from 9:35 this morning (starts around minute 5)