Smarts lacking in Liberal government gas plant decisions – by Christina Blizzard (Toronto Sun – April 16, 2013)

TORONTO – How stupid are they? And what fools are we to buy their baloney by the pound? I’m talking of the Liberals and their outrageous decision to pull the plug on construction of the Mississauga power plant in the middle of the 2011 election.

Auditor general Jim McCarter produced a scathing report on the deal Monday. At the end of the day, he said, we’ll have built two power plants — and we may not even need one, since power needs have dropped since 2009.

It’s also clear the government has been lying through its teeth over the cost of scrapping the plant. The Liberals promised all along the cost would be $190 million. Now we find the true cost — $275 million.

McCarter’s detailed calculations show that lowball figure didn’t include costs such as the extra tab for delivering electricity to Mississauga from Lambton, near Sarnia.

The Liberals botched the deal at every turn, with side deals and trade-offs that gave away the store to Eastern Power, the parent of Greenfield, the company that built the plant. There were potential savings in the move to Lambton. The Dawn Hub gas storage plant is close to Sarnia, so there are savings in not having to bring the gas to Mississauga.

But the government negotiated away $65 million in savings.

“The Ontario Power Authority (OPA) told us that it was aware of these potential savings but had estimated them at the time of the negotiations to be about $36 million,” says the report. “However, the savings were not ultimately reflected in the price the OPA will be paying for the Lambton plant’s electricity under the new deal and will therefore be kept by Greenfield,” the auditor says.

The panicked cancellation of the plant by the Liberals mid-election put pressure on the OPA and forced them into a corner when it came to negotiating the deal.

The company building the plant, Greenfield, came out very well. They ended up owning the land on which the plant was to be built.

McCarter reveals possibly the cheapest scenario considered at the time was to finish construction of the plant — and then not operate it.

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