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Auditor-General’s 36 major concerns re: Ontario renewable energy initiatives

In December, 2011, Ontario’s Auditor-General reported 36 major concerns relating to Ontario’s renewable energy initiatives. Researcher Keith Stelling has just released a compilation of these concerns (listed below), with additional commentary.

If the A-G’s report was an auditor’s report on a private corporation, there would be an immediate and total shakeup, and all senior management would be fired.

You can read Keith Stelling’s report at http://tinyurl.com/7k8cvhd and the Auditor-General’s report at http://tinyurl.com/6tc2q2v .

Detailed findings of the Auditor General’s investigations

1. Wind and solar will add significant additional costs to electricity bills.

2. The government claim of 1% rise in electricity costs for renewable energy was inaccurate.

3. $169 million in 2010 and $296 million in 2011 would need to be recovered from electricity ratepayers for the cost of connecting renewable energy.

4. Ontario consumers were not informed of true costs of green energy.

5. The government was warned in 2007 that new wind power would create higher Green House Gas (GHG) emissions.

6. Minister added $4.4 billion to FIT contract payments against O.P.A. advice.

7. Was the Samsung agreement made without economic or business case analysis and neither OEB nor OPA was consulted?

8. Normal due diligence process not followed; no formal Cabinet approval.

9. Electricity ratepayers may have to pay $150 to $225 million a year to renewable energy generators not to produce electricity.

10. Backup: Consumers have to pay twice for intermittent renewable energy.

11. Cost and environmental impact of backup not analyzed.

12. The extent of the backup requirement has been underestimated 19 13. Closing coal plants will require an increase of 5,000 MW of gas-fired generation.

14. Minister suspended independent assessment that would ensure decisions were economically prudent and cost-effective.

15. Billions committed to renewable energy without evaluating impact.

16. Despite anticipated surpluses, renewable energy generators will get paid even though Ontario does not need their electricity.

Loss of oversight and transparency in decision making

17. Ministerial directives bypassing OPA and OEB lead to loss of transparency, economic prudence and cost effectiveness .

18. Many directions related to the procurement and pricing of renewable energy have been issued since 2008 in the absence of an approved IPSP, and the OEB has had no oversight role.

19. There has been a lack of independent oversight on the reasonableness of FIT prices.

20. If the IESO instructs wind generators to shut down under a surplus-power situation, the generators still get paid.

21. There has been inadequate assessment of the potential costs of curtailing renewable energy.

22. Adding more renewable energy would result in curtailment cost of paying renewable generators for not producing electricity from $150 million to $225 million a year.

23. The lack of correlation between electricity demand and intermittent renewable energy has created operational challenges, including power surpluses and the need for backup power.

24. Surplus base load generation caused by renewable energy will add more costs for electricity ratepayers.

25. In 2010, 86% of wind power was produced on days when Ontario was already in a net export position.

26. Export customers paid only about 3¢/kWh to 4¢/kWh for Ontario power; electricity ratepayers of Ontario paid more than 8¢/kWh for this power to be generated.

27. From 2005 to the end of our audit in 2011, Ontario received $1.8 billion less for its electricity exports than what it actually cost electricity ratepayers of Ontario.

28. The IESO requested that nuclear generators shut down or reduce electricity supply 205 times in 2009 and 13 times in 2010.

29. Recommendation 5: Assess the operational challenges and the feasibility of adding more intermittent renewable energy into the system.

Socio-economic Impacts

30. Promised “green” jobs have not been produced and existing jobs may be lost because of higher electricity prices.

31. A majority of the jobs will be temporary.

32. Analysis should consider both job-creation and job-loss impacts, and experiences of other jurisdictions with similar renewable energy initiatives.

Environmental Concerns

33. Estimated reduction in greenhouse gases did not take into account the continuing need to run fossil-fuel backup.

Health Concerns

34. CMOH report questioned.

35. Academic research chair has produced no report.

36. Ministry of Energy should measure impact of backup facilities and provide objective research on potential health effects of wind power.

Gary Mooney

Filed Under: Letters and Opinion

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  1. Chris Keen says:

    Here is the link to the 2011 Auditor General’s Report. It’s broken up into manageable PDF sections. The three relating specifically to the government’s electricity policy are 3.02 – 3.04.

    http://www.auditor.on.ca/en/reports_2011_en.htm

  2. Doris Lane says:

    the auditor general has substantiated what many of us already know and Dalton does not care that he is putting everyone in Ontario at risk
    As Gary says if Dalton was running a private business he would be fired. too bad more people did not understand what was happening at the time of the last election

  3. Alison Walker says:

    Would it be possible to have hard copies of the Auditor-General’s Report available at Todd Smith’s Town Hall Meeting on Thursday night . . . for those who have not read it? Hopefully, some speaker during the evening will address it. I’m also hoping that Don Drummond, whose report to the Premier is due soon, will reinforce Jim McCarter’s findings. That would help immensely.

    Alison

  4. Chris Keen says:

    http://opinion.financialpost.com/2011/12/05/terence-corcoran-the-dark-side-of-green-energy/

    A very insightful article on the Auditor General’s report by Terence Corcoran. These two paragraphs are particularly
    striking:

    “It demonstrates that no Canadian government has gone as far out of line as Ontario’s Liberal Premier Dalton McGuinty in misappropriating the levers of authority to achieve green ends. It’s also doubtful any government has ever received such a scathing review from is own auditor.

    In 2009, the McGuinty government literally bulldozed its own regulatory regimes, charged ahead without cost-benefit analysis or business plans, refused to allow cost-cutting alternatives that would have saved ratepayers at least $8-billion and generally allowed the green-industry lobby to dictate the structure of the province’s electricity sector in its favour. The specifics of the report point not just to bad policy badly implemented, but to a high level of fiscal negligence and abuse of process and disdain for taxpayers and electricity consumers.”

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