When the people rise up
On Oct. 8, 2013
, the Auditor General of Ontario publishes her report on the cost of the cancellation of the Oakville gas power plant. You can download it and read it for yourself here: Auditor General Report
You may want to consider carefully what the Auditor General says on Page 9 of the Report to understand who is responsible for this costly mistake:
"The OPA told bidders that municipal opposition to a power plant would not be considered in its evaluation of their proposals—As the OPA was aware, the Town of Oakville was very actively and publicly opposed to a power plant within its borders. Of the four developers the OPA had shortlisted in March 2009 to build a power plant for the Southwest Greater Toronto Area (Southwest GTA), only one, TCE, was proposing a plant in Oakville. Two months after
issuing a Request for Proposals to the four developers, the OPA told them that it would consider only the municipal requirements in place in January 2009 when evaluating proposals. The OPA informed us that it did not want the actions taken by municipalities that knew a power plant might be built within their borders to affect the proponents’ submissions. In September 2009, with Oakville already having put a bylaw in place delaying the establishment of a power plant in the Town, the OPA awarded the contract to TCE.
You might want to consider if there is a better word than reckless
for the way the OPA conducted itself and favoured
one bidder by trying to exempt it from the risk it faced to obtain municipal approvals. By reducing a bidder's risk, the OPA increased its own risk of having to compensate the bidder when it failed.
And $40 million is what it cost taxpayers
, the Auditor Genral's
Report says. The rest of the AG Report's estimated costs ($635 million) are spread over 20 years into the future and are paid in electricity rates.
(The Auditor General and the OPA chose different dates for assuming future events and different discount rates for the calculation of present value/cost of the future events and costs. The OPA had used 6% for the discount rate and the Auditor General used 4%. The OPA discount rate gives $270 million for future costs and the AG discount rate gives $635 million. Spread over 20 years, the AG estimate is about 52 cents a month per customer and the OPA estimate is 22 cents.
It's easy to regret there were any costs, but until the OPA method for conducting siting of new power plants is fixed, there's no protection from it happening again.