by Karen Howlett, The Globe and Mail
The Ontario government has inked a string of sweetheart deals with private-sector energy companies, promising them guaranteed revenue regardless of how much electricity they produce and sell into the market. The practice began when the governing Liberals came to power in 2003, according to the Ontario Power Authority.
Nineteen natural gas-fired plants have been built in Ontario as part of the McGuinty government’s push to replace coal-fired electricity plants with cleaner sources of power. The plants accounted for about 15 per cent of the province’s electricity output last year.
The power authority, a government agency, routinely signs deals with companies operating these new gas-powered plants, agreeing to pay them fixed prices regardless of how much electricity they produce, according to the documents and interviews with industry sources. In some cases, the companies receive 100 per cent of their revenue for operating the plants at well below half their capacity. The cost is passed on to consumers.
The contracts have been shrouded in secrecy, with both government and company officials citing commercial sensitivity. But the government was forced to disclose reams of documents last week, after the controversy over its decision two years ago to pull the plug on building a plant in Oakville, west of Toronto. Read article