[Ontario] Energy policy unintelligible – Thunder Bay Chronicle-Journal Editorial (November 30, 2012)

The Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

IT is becoming increasingly difficult, if not impossible, to understand Ontario’s energy policy. No more so than in Thunder Bay and Northwestern Ontario where the policy is marked by fits and starts instead of a stable program for reliable electricity that grows with demonstrated need.

Ontario is short of revenue and it is at times short of electricity. More electricity can and will lead to more revenue, both in terms of general economic development and through taxation. The recent Ambassadors study by Lakehead University demonstrated clearly that if just the nine most promising mining projects in this region proceed, $135 billion will be spent and $17 billion will be paid in taxes, a third of it to Ontario.

It is not an exaggeration to say that the new Northwestern mining boom can be the economic driver for all of Ontario. But it must have the electrical power on hand to run things.

As this newspaper reported Wednesday, as part of its responsible clean-air goal to phase out coal-burning power plants, Ontario drew up plans to convert the Thunder Bay Generating Station to natural gas.

The preparations to do that saw the Ontario Power Authority authorize Ontario Power Generation to contract with Union Gas to expand its local capacity by enlarging its pipeline from 12 inches to 16 inches. The deadline to order materials for that project came and went on Nov. 1. But OPA had decided against the conversion based on a much larger vision to supply the North by expanding the main east-west tie-line.

This was the second cancellation of the same project. The first one cost taxpayers $11 million; this one will cost a further $9 million, paid to Union Gas for its trouble and to OPG for its engineering and other costs. So we’ve paid $20 million for nothing. Why is OPA frustrating OPG and Union Gas? And does anyone believe the project won’t go ahead at some point? What is the alternative?

OPA insists the tie-line expansion together with cancelling the Thunder Bay conversion will save $400 million in total. That is at least twice as much as anyone in or associated with the power business in Northwestern Ontario has ever heard of. An explanation is being awaited in an OPA report that anxious local officials want to see by December.

The tie-line as it exists now is one very long umbilical cord. It is subject to an average of a dozen outages a year at this end. There are complexities that can cause industrial downtime in one community because some component fails in another.

In southern Ontario, nuclear plants that must operate continually must therefore pay Quebec and northern U.S. utilities to take excess power in the day. At night, when everyone comes home and turns on the lights, Ontario must buy power back from those utilities to avoid power failures. Again, we pay twice.

Even if the OPA is right, and it can somehow manage to send enough reliable power north to maintain existing needs and feed all the new mines, it will not be able to finish the job in time to supply this region with all the power that it needs. What happens in the meantime?

With Thunder Bay down and the Atikokan station only able to produce a fraction of its rated output of 200 MW most days (its conversion to biomass cannot possibly find enough wood pellets to run it flat-out), will the Northwest be subjected to brownouts, even blackouts when power requirements surge? If that is a part of the plan, we need to know about it — in order to say No, Not A Chance.

Incidentally, those two Thunder Bay power project cancellations are not the only ones here in the Northwest.

A decade ago, Ontario agreed to buy the North’s power from a huge new hydro project in northern Manitoba, then cancelled, then decided it had made a mistake and had Manitoba resume its plans, only to cancel them for a second time.

The matter ended up in court and reportedly cost Ontario taxpayers in excess of $100 million. Add that to the $20 million in penalties in Thunder Bay and the estimated $1.3-billion to cancel the Oakville and Mississauga gas plants for purely electoral advantages, and one really has to wonder if this government, and especially its Ontario Power Authority, have a clue about what they are doing.