STANDING COMMITTEE ON ESTIMATES
COMITÉ PERMANENT DES BUDGETS DES DÉPENSES
Wednesday 11 July 2012 Mercredi 11 juillet 2012
The committee was dealing with a motion, on the last occasion, by Ms. MacCharles to amend Mr. Leone’s motion. This is motion number 5 in your package. On the last occasion, Mr. Zimmer had the floor but he is not here today—at least, he’s not here in the room at this point. Therefore, we’re open to further debate.
Mr. Reza Moridi: Good morning, everyone. Mr. Chair, it’s clear to me that the opposition members are seeking to endorse, advocate and lobby for a prejudicial report against the minister. The report that the opposition are lobbying for would be taking a substantive and damaging position against the minister that would only serve the political needs of the opposition and not the interests of the people of Ontario.
The opposition have clearly outlined what they believe needs to be in this report. However, it does not provide the full and complete picture. Our amendment, therefore, seeks to ensure that the report back to the Legislature and to the Speaker contains all of the relevant and pertinent information that has seized this committee thus far.
I think that one of the biggest pieces of information that has governed this committee and the minister’s action is the ruling of the Chair. I will remind folks that the Chair has ruled that the minister has a right to decline documents, in the same way that the Chair has ruled that the opposition members have the right to ask any and all questions about these matters. In this case, the minister, in his response to the motion that was passed on May 16, 2012, thought it was in the best interests of the province of Ontario to file the response that he filed, which, I might add, was in line with the Chair’s ruling.
We think that this whole motion is frivolous and the opposition is simply playing political games. The report back to the committee should contain the facts. The opposition has clearly stated what facts they want included in the report; namely, the full motion that was passed on May 16 and excerpts of the minister’s response. It is only fair and responsible that this motion contain a detailed outline about the other facts that need to be included, so as not to prejudice or unjustly bias anything that goes before the Legislature.
In this vein, it’s important that the context to which the minister responded to the committee be a tenet of this motion as well as a principle of the report from this committee. Anything less than that would clearly demonstrate that the committee is not interested in presenting the facts on what we consider to be very serious and unfounded charges against the minister; rather, they’re out to hold a trial on the floor of the Legislature and besmirch the good name of this minister for political benefit.
Mr. Rob Leone: I just have no idea what that had to do with the amendment that we’re putting forward here with respect to the one Ms. MacCharles put forward on June 12. I don’t have any idea what that had to do with this amendment that we are debating. We’re not debating the motion; we’re debating an amendment. Certainly, that has nothing
The Chair (Mr. Michael Prue): Okay. I am going to vote against the amendment. I am going to do so because of the events that took place yesterday. The main reason that was given by the minister and the main reason why I made the initial ruling was that it could have affected a court case. I’m given to understand from the minister, and all of the information that was released yesterday and is in all of the major newspapers this morning, that there is no longer a court case in either Mississauga or in Oakville. That being the reality, I don’t see the purpose of this. It is quite clear that at the time the ruling was made, that was an issue, but I don’t know how it needs to be an issue at this point. Having said that, I would cast my vote in the negative, and the amendment fails.
The Chair (Mr. Michael Prue): Well, I haven’t even gotten to the point where I—but I will recognize you next. That’s where we’re at. We do have a number of amendments that have been filed before us, 6 through 10. Mr. Leone, I will now recognize you.
Mr. Rob Leone: Mr. Chair, I’ve asked to call the question to the main motion simply because we’ve been debating this for a number of hours now, in light of what happened yesterday. Certainly, the statement by the Ministry of Energy and the Minister of Energy with respect to the Mississauga gas plant included lines to the effect that there are no longer any legal proceedings related to the Mississauga gas plant. On the basis of that, I think that many of the questions and concerns brought by the governing party on this matter have simply, on the basis of that statement and the decision to move the plant to Lambton—I believe that it’s in everyone’s interests to proceed with the work of estimates so that we can get to the Ministry of the Environment, which is a choice, a selection, that I believe was made by the governing party to be scrutinized in estimates. On the basis of that, Mr. Chair, I would ask that this question now be put.
It’s not a vote, so there’s not an entitlement to a 20-minute recess; it’s simply my decision whether or not sufficient debate has taken place around this issue. I’ll take a 10-minute recess to consider that and also to consult with the clerk, because I need to know the number of hours we have spent debating this up to this point. So we will recess for 10 minutes, and be back here at 20 minutes to.
The Chair (Mr. Michael Prue): The meeting is resumed. We have, in the period since the recess began and now, received a copy of a letter from Minister Bentley. I have asked that a copy of the letter be distributed to all members and form part of the record, so everybody will have a chance to read that.
Unfortunately, we require an additional 10 or so minutes to calculate the amount of time that has been spent to date, debating this particular motion by Mr. Leone. I think it is germane to the issue of the vote, so I am asking, and I will be recessing again, for 10 more minutes to have that calculation made. It will also give an opportunity for people to read the letter from Mr. Bentley, which is totally on topic to the decision that must be made.
I have now had an opportunity to consult with the clerk and especially to find out how long we have been debating Mr. Leone’s motion and all the ancillary amendments to it. We have been at this now for eight hours. That is, we have spent eight hours without doing the primary work of the committee. The primary work of the estimates committee is to call the various ministers and ministries before us and to ask tough questions. That’s what estimates does. That’s its role within the Legislature. The role is, I think, what we are here to do.
I have considered the eight hours. I have also looked at a precedent. There is one other precedent where this happened, back in 1996. It involved a longer period of time than eight hours, but it was on motions made by then-member Ms. Pupatello—the request in that case to say that sufficient time was granted by the Chair in that day.
Given the statement by the minister that he will be in large part acceding to the request of the committee in short order, and so will the OPA, I see very little reason to continue with the debate. Therefore I am going to rule that the request is in order and that we go on and vote on the main motion, as amended.
The Chair (Mr. Michael Prue): Okay. An appeal has been made of the Chair’s decision. So the question—and I’d better get it, because it’s contrary to what I have learned in Robert’s Rules of Order. It’s not, “Shall this Chair be sustained,” but—what’s the actual wording?
The Chair (Mr. Michael Prue): The meeting is resumed. We will now go to the vote, the question being, shall the decision of the Chair be appealed to the Speaker? All those in favour of the motion made by Ms. Cansfield? All those opposed? It is again tied. As I have stated on the last occasion, since I am required to break the tie vote, I will not be appealing my own decision.
All those in favour of the closure motion, please signify. All those opposed? Again, on a tie vote, I would cast my vote in favour of the closure for the reasons I have already given. We have had eight hours of debate.
The only issue that remains, given the copy of Minister Bentley’s letter, is whether or not the committee must respect the confidentiality associated with the document by exempting it from disclosure. That is what Minister Bentley has written on solicitor-client privilege. That’s the only issue, in my mind, that’s left.
The Chair (Mr. Michael Prue): Oh, no; sorry. The clerk has told me I must move to the main motion, and I would acknowledge her expertise on this point. We must move to the main motion. Now, it’s the main motion, as amended. There has been one amendment that was made, and that was amendment—
The Chair (Mr. Michael Prue): We had better clarify. I want to make sure that everybody understands the amendment. The clerk requires a few seconds here, so we’ll recess for five minutes to allow the clerk to determine exactly how the motion has been amended before we vote on it.
The Chair (Mr. Michael Prue): We will resume. I have been informed by the clerk that the Hansard has been requested in order to determine exactly what was done on that date. Any indication of how much time might be necessary?
The Chair (Mr. Michael Prue): The meeting is resumed. With much thanks to the clerk and the clerks’ office, you now have the motion with the deletions, which is the entire paragraph 2, made in two separate motions. The vote will be on the motion, as amended. All those in favour of the motion, as amended? All those opposed? Again, it is another tie vote. Okay.
It has taken many, many weeks to get to this position. I am going to cast my vote in favour of the motion, as amended. In so doing, I want it to be very clear and on the record that I believe that the issue that is now before the Speaker—and it is before the Speaker, not this committee; it is the Speaker who must make the determination whether or not this committee has been accorded its privileges to see documentation; it is the Speaker who must determine whether or not the minister has provided that documentation. I am mindful and I trust the Speaker’s decision, and he is the final authority and arbiter of this.
The issue, as I see it, at this point, is down to the point, since the minister has revealed in a letter today that he will be forthcoming with almost all of the documentation as it relates at least to the Mississauga portion. The final question, I think, that the Speaker is going to have to answer, and this is why I’m putting it on the record, is whether or not the minister can choose not to provide—and I quote from his letter: “Certain information remains subject to solicitor-client privilege and I continue to ask the committee to respect the confidentiality associated with that documentation by exempting it from disclosure.” I think that’s what has to be determined, in view of the House of Commons’ decision made around the Afghani affair, that the information could not be kept from a parliamentary committee.
I think the Speaker needs to rule on this and that’s why I am supporting it. And I am asking as well that the minister’s letter be appended to the copy of the motion so that the Speaker understands very clearly. I’m also asking the clerks’ department to make the entire transcript around this motion available to the Speaker, because I want the Speaker to be able to understand clearly how this changed from day to day and how we got to the final decision today. Having said that, I will cast my vote in the affirmative. The motion carries.
Mrs. Donna H. Cansfield: Thank you very much, Chair. I have a couple of issues I’d like to raise with you as a point of order. One is, I’d like to submit a dissenting appendix to the documents being forwarded to the Speaker.
I also would like to make a comment that I think that we have, as you have just indicated—it’s interesting that according to the privileges for the members, I think you have usurped long-standing parliamentary procedures with your closure decision. I’d like that on the record. And you spoke about the letter.
But more so, I want to raise an issue, and I’m going to ask for direction from the legislative branch. Often in our role in other areas, we make comments one way or another about an event that occurs within the normal course of the Legislature. Then some of us end up in a position where we are a Chair of a committee, and as a committee, we are deemed to be neutral and to use parliamentary procedure to the very best of our ability, to remain and sustain that neutrality.
According to the procedures as they are outlined, the Chair must rule on his or her own decision, even as an appeal, except in a position where the Chair may be in a situation, having made a comment or a suggestion or a position, where it was known whether they were for or against a particular situation. It produces a fiduciary conflict of interest for that Chair and then, therefore, it’s prejudicial to an outcome on a vote—and it could be in any committee, not just this committee.
My question for the legislative branch is, when such situations occur and given the fact that rulings must be made, can the Chair not excuse himself or herself and let the Vice-Chair assume that position? I don’t need an answer now. I would like it on the record, though, and to come back to all members, because I think it’s something that really impacts all committees, not just this committee, when it may be seen that the Chair is prejudicial to a particular situation, either for or against, and then makes rulings one way or another on that issue. I think that helps the member so that they are not put in a conflict of interest or in a position where they may be shown to have a conflict of interest. So I ask that through you, Mr. Chair, to the legislative branch. And that I can do as a member of this committee.
The Chair (Mr. Michael Prue): I’m not sure that it needs a response. It is a member making a statement that she believes that there should be some changes to the rules or procedures. That’s really what she’s saying. I don’t know whether it needs to have a comment or not.
I am bound, as is this committee, as is the House, by the rules and procedures that are in place, and I believe they have been followed. If they are to be changed—then she has made a statement that she is indicating that she would like to see some change—that change would normally take the form of her talking to the government House leader, and the opposition House leaders would take a look at that, and they would sit down and discuss potential changes. I think that’s how business goes on around here.
Mr. Rob Leone: I was just going to say, Mr. Chair, that I know you’ve been put in many difficult positions throughout the course of this committee already and in positions where you are breaking ties, as we have four people on this side and four people on that side. I just want to state for the record that, in my view, you have conducted yourself very impartially and fairly. You have at times sided with us and at times sided with the government. I just wanted to state for the record that I think that your work as Chair has been very, very good.
Now, we are on to business, I would think, of the committee? Yes. At this point, on the last occasion it was made known to the Minister of Energy that he would be called and given 15 minutes’ notice for his arrival. So I would ask at this point—I want to give 20 minutes, just in case. It is now five minutes to 10. If we could come back here at quarter past 10, at that time the minister will be—
The Chair (Mr. Michael Prue): It is my memory, but we will confirm this, that there’s about five minutes left for the Conservatives; that we broke—this was way back in May or maybe April. There’s about five minutes left on their rotation, and then we will proceed to Mr. Tabuns. We will confirm this in the next 20 minutes.
The Chair (Mr. Michael Prue): Time to reconvene. I want to welcome the minister and all of the staff back. Just for the edification of the minister, your letter was received this morning. It has been filed. It’s part of the record.
The Chair (Mr. Michael Prue): My understanding, and it has been confirmed by the clerk, is that on the last occasion you were here, questions were with the Conservatives. They have approximately five minutes left, and then we will go in rotation from there.
Mr. Rick Nicholls: Thank you very much. Welcome back, Minister. It’s good to see you back here, and now an opportunity for us to get to the real issues. Recognizing that fact, Minister, I would really appreciate short, succinct responses in order to make up for the close to nine hours that we’ve wasted of taxpayers’ dollars thus far.
Minister, here’s my question: In your press release yesterday, you stated that the total cost of relocating the Mississauga power plant is approximately $180 million. This lawsuit is a further financial burden on the back of Ontario taxpayers. My question is simple: Would you prefer to have that unnecessary expenditure paid for by the taxpayers or the hydro ratepayers through increased hydro bills once again?
Hon. Christopher Bentley: Thank you very much. I do appreciate being back to the committee. I did appreciate the opportunity yesterday to provide the people of Ontario and this committee with an update on the Mississauga gas plant situation. I said all along that as soon as I was able to provide an update, I would, and yesterday was an opportunity to do that.
Specifically to your question, we have announced an agreement between the Ontario Power Authority and Greenfield South Power to relocate the Mississauga gas plant. It will now be known, I suspect, in our conversations as the Lambton gas plant. The bottom-line cost of relocation is $180 million. That agreement was concluded on Monday. There hasn’t been a further discussion or decision about how it will be allocated, but that is the cost of doing what we committed to do back in September 2011, and what your party committed to do by press release exactly the same day, and what the third party, the NDP, committed to do as well.
Hon. Christopher Bentley: As I indicated, there hasn’t been a further conversation about that since the agreement was concluded on Monday. That’s something that will have to be discussed and decided in the future.
Mr. Rob Leone: Yes. Thank you, Minister, for coming back. I have a question with respect to what has transpired over the last 24 hours. I know that David Caplan took the fall for Minister Smitherman on eHealth, which cost about $1 billion.
Hon. Christopher Bentley: Thank you very much. What we announced last September 2011 as our intention—it was immediately, same day, by press release, picked up by your party. I’ll quote part of it: “A Tim Hudak government will cancel this plant.” The NDP was saying, approximately two days later, on September 26, that, “We wouldn’t build it.” It would mean that, however the election had turned out, all three parties were going to be in exactly the same position; that is, either cancelling it and not building anything or cancelling the location and moving it. Our choice was to cancel and move it to best obtain the power, to best protect the people of the province of Ontario and to reach the agreement.
The long, good-faith discussions that we had—and I thank all parties for their participation in those; their hard work in those discussions—resulted in an agreement that provides value for both. But the cost of relocating, the cost of fulfilling that commitment, which was the commitment that your party made and the commitment the NDP made, is $180 million.
Mr. Rob Leone: Minister, if we were in government, there would have been a new Minister of Energy, a different Minister of Energy, on account of bungling the siting of the Mississauga gas plant. Don’t you think that we should have a new minister because of this bungling of the Mississauga gas plant, the siting of that, which was your government’s decision?
Hon. Christopher Bentley: Thanks very much. I became the minister, actually, in October 2011 and proceeded to implement the commitment that we made, which was exactly the same commitment that your party made and exactly the same commitment as the NDP made, so I think that’s a fact that we shouldn’t miss.
Hon. Christopher Bentley: As you know, there was a Liberal Party press release that was issued, I believe the date of September 24, 2011, announcing our intention. Once we became the government, we proceeded to implement our intention.
Mr. Peter Tabuns: No, I know you were not, but my guess is that you’ve become intimately familiar with this whole affair in the last few months. Was it the Minister of Energy who, on his own behalf, decided that we should not proceed?
Hon. Christopher Bentley: It was a Liberal Party press release that was issued on the 24th, and it was our intention, should we form the government, to relocate the plant. I don’t believe we talked about cancelling the contract, as was suggested in a previous discussion. We spoke about relocating, not proceeding with the plant at the Mississauga location, and proceeding to work with the proponent to relocate the plant. Those were the discussions that have ensued.
Hon. Christopher Bentley: I did indicate by letter to the committee that we are preparing the documents relating to Mississauga and have asked the committee to respect solicitor-client privilege with respect to the documents. I’m aware of the report, Mr. Chair. That’s a separate issue. I’ve just indicated by letter that there are documents that we’re preparing that are not solicitor-client privileged.
Hon. Christopher Bentley: Well, when I provide the documents, when they’re together and we’re able to provide them, you’ll be able to judge for yourself what they show. I don’t want to get ahead of the documents and I don’t want to get ahead of your characterization of the documents. What I’ve said is that we will provide them.
I said all along that when this matter reached a point where I could speak to it—I’m pleased that it reached a point where an agreement was concluded between Greenfield South Power and the Ontario Power Authority, but I said all along, and I have said since I became the minister, that when this issue reached a point where I could provide an update, I would provide the update. I said that to the committee. Yesterday I was able to provide the update on the basis of an agreement that was reached, concluded on Monday, and I have said by letter this morning—and yes, I’m aware of the report. The report is there. It’s going to the House. But apart from the report, I have said by letter that we are preparing and prepared to provide documents, and we’re asking that solicitor-client privilege be respected. So the documents that are not solicitor-client privileged we’ll be providing, and I think they’re being prepared now.
Mr. Peter Tabuns: That’s good, because I would assume a letter or an email from the campaign director for the Liberal Party in the last election would not be part of a lawsuit. I assume direction from the Premier to the Minister of Energy saying, “Hop to it,” also wouldn’t be the subject of a lawsuit. So I look forward to those documents.
Hon. Christopher Bentley: Can I just—I don’t want to take too much of your time, but I’ve spoken about solicitor-client privileged information, I haven’t spoken about matters that are subject to a lawsuit because, as I made clear yesterday during the report, the lawsuits relating to Mississauga on both sides of the border have been withdrawn. That’s my understanding.
Mr. Peter Tabuns: Yes. I just think a lot of us are interested in knowing who actually made the decision to incur this $180-million cost, and my guess is, it was not a junior clerk in the Ministry of Energy.
Hon. Christopher Bentley: So you will see from the documents the implementation of the Liberal Party intention, as expressed in the press release of September 24, and I expect that in the documents that we are putting together, you will see the implementation of the government’s stated intention in that press release. You can draw your own conclusions from those and from anything else.
Mr. Peter Tabuns: The IESO and the OPA had previously said that the power plant was needed in Mississauga to deal with a shortfall in supply to the southwest GTA. I was at your media conference yesterday. That question was asked. You’ve indicated that that is no longer an issue. When did that change?
Hon. Christopher Bentley: No, what I’ve indicated is that we’re confident that we can meet the needs of Mississauga and that part of the GTA through other means. The Ontario Power Authority, the IESO—all parties are constantly planning to make sure that we have enough power to meet the needs. There obviously was a view that having generation located close to the need is always a factor to be taken into consideration, but as the past four weeks of very extreme hot weather and the demands on the electricity system in the province of Ontario have demonstrated, we have been able to meet the very high needs of the people of the province of Ontario, including Mississauga and this part of the—
Hon. Christopher Bentley: I’ll just finish; I won’t be long—including this part of the GTA through the existing. Now, we have indicated, obviously, if you don’t have the generation right beside the load, then you’re moving it from somewhere else.
Hon. Christopher Bentley: As you know, we just completed and opened up the Bruce-to-Milton line, which is significant, and we have been upgrading our transmission throughout the province of Ontario. We’ll continue to do that, and we’ll continue to plan for the out months and the out years to make sure that what we can meet today we’ll be able to meet in the future, no matter what the demand happens to be.
Mr. Peter Tabuns: Well, in the spirit of brevity, you’ve just opened a whole other chapter for me. This $180 million to move the plant from Mississauga to Sarnia, you are going to meet the shortfall and supply by “other means”—the words you used a few minutes ago. I’m assuming, again, from your words, that means investment in transmission. What’s the cost of the transmission investment to deal with the movement of this plant?
Hon. Christopher Bentley: What I was intending to say: We have had, as you’ve seen in the past four weeks, very extreme weather, very high demands on the electricity system. We have had the ability—and I want to thank the men and women not only of the generators, like OPG and the independent generators, but the transmitters, Hydro One, the LDCs, all those involved in the generation and transmission of electricity. I want to thank them for the work they’ve done the past four weeks.
We’ve been able to meet the demands. We’re constantly planning to make sure we can meet the demands in the future. We are confident that we can meet the demands, and we’ll constantly plan to make sure that we can.
Mr. Peter Tabuns: How much more is it going to cost you in transmission infrastructure to deal with what you have said is a shortfall in demand in the southwest GTA? You’re spending $180 million to move the plant. You’ve said you will meet the needs there by other means. What is it going to cost you to provide those power supports by other means?
Hon. Christopher Bentley: No, what I said was we’re able to meet the needs; we believe we’ll be able to meet the needs. And if there is any shortfall in the future, we’ll make sure that the planning has been adequately done for this region, as in all regions of the province of Ontario, to make sure that we can get power to where it’s needed.
Hon. Christopher Bentley: There isn’t a shortfall at the moment; I don’t anticipate a shortfall in the future. I do not anticipate a shortfall in the future. We constantly plan through the OPA and the IESO to be able to meet that.
But let’s be clear: There are transmission upgrades going on in the province of Ontario, and there have been. There was not enough investment in the transmission infrastructure in this province for many years, up till the time we became the government in 2003. We’ve seen south of the border, in particular, the consequences of saving today by not making the necessary investment. We’ve been making the necessary investment.
You’ve asked about bills. That’s reflected to some extent in the bills that ratepayers are receiving. We’ll continue to make the upgrades in transmission to make sure you have a reliable system that can carry the load. We’re confident that we can meet the needs today and tomorrow in Mississauga and the GTA, like all parts of the province—constant planning by the IESO and the OPA to make sure we can meet those needs.
Mr. Peter Tabuns: In the end, you will either show that the IESO and OPA misjudged the need for power in the GTA or you will have to at some point provide transmission infrastructure to deal with the shortfall, should it exist. I don’t—
Hon. Christopher Bentley: What we have an obligation to do is to make sure that we can feed the needs of Mississauga and that part of the GTA. We are today; we expect to be able to in the future. In that region, like every other, we constantly plan to make sure we can.
There is no identified issue with respect to meeting those needs at the moment. It doesn’t mean that they were wrong. It means that, as in all cases, it’s always better to have generation as close to the load as possible; better subject to the fact that there are challenges in locating generation in the province of Ontario no matter what kind of generation you talk about.
There is a constant: There are challenges in energy projects in the province of Ontario in locating them. If you don’t locate them nearby, there are challenges in transmission. And there is one constant: Everybody wants it. We’ve had a very reliable system, as demonstrated over the past four weeks.
Mr. Peter Tabuns: Minister, in the New York court documents that were filed, it was clear Greenfield was under no obligation to stop construction. In fact, they could have gone ahead with construction and, upon completion, the OPA would have been obliged to pay for the contracted amounts. If the OPA hadn’t, Greenfield could have sued for failure on your end to meet your contractual obligations.
Hon. Christopher Bentley: You know, I completely and utterly reject your characterization of Greenfield. I think it’s a very unfair comment on your part. Greenfield throughout this, as did the OPA—the two parties to this negotiation both worked hard; they bargained hard. These were long and protracted conversations, as is evidenced by the fact that I started speaking about this just about the minute I became the minister and you, your party and others were constantly asking me for an update. I constantly told you there were very active discussions going on. They were very hard discussions.
In the end, the two parties reached an agreement—good-faith discussions—and I say good for them. They reached a discussion that’s good for the people of the province of Ontario, that is good for Greenfield South Power and their owners and shareholders. If it hadn’t been, there would have been no agreement, but there was.
Mr. Peter Tabuns: Now as you’re probably aware, financiers for this project in court in New York expressed their frustration and anger that the Greenfield developers rolled over without a peep, without complaint. They just accepted it. The financiers were furious; read the court record.
What I need to deal with is the result. The result, as we were very clear about yesterday, is that all lawsuits with respect to EIG, the financier of the Greenfield South project, have been settled; they’ve been withdrawn. Part of the cost of relocating is an early termination payment of $88 million, end of story. I don’t need to worry about or concern myself with what was said by them in a lawsuit in another jurisdiction. That’s the end of that story.
Greenfield South Power has reached an agreement that they believe is in the best interests of them and their owners. I happen to agree with them because it happens to be an agreement that was reached on behalf of the people of the province of Ontario through the OPA that the OPA believed in all the circumstances was in the best interests of the ratepayers. That’s what an agreement is: Two parties come to see it as something that they both believe is in their best interests. They both worked hard, very intensely—very intensely—and they reached an agreement. They are in possession of the facts and circumstances that they believe are important to them.
Mr. Peter Tabuns: Minister, I’m trying to understand what happened here. Your saying, “Well, let’s just move on,” is not adequate. We’re $180 million out of pocket, the people of Ontario. Whether it’s through their rates or their taxes, they’ve incurred an expense they shouldn’t have incurred. We need to understand what happened.
In court in New York, the financiers said that Greenfield just simply went along, didn’t complain. So one has to ask, what inducements were offered to them? The financiers said that the OPA or the government of Ontario was paying off any liens that were being put against the equipment on the site. Did you tell Greenfield that you were going to assume any debts or liabilities that they might incur in the course of all this?
Hon. Christopher Bentley: —to make sure that equipment that had been ordered had actually been received, to make sure that the negotiations and discussions were able to continue? Are all those accounted for in the course of either the negotiated price or the relocation cost? Yes. That’s part of the discussion.
Mr. Peter Tabuns: So effectively, you became Greenfield’s financier at that point. Well, their financier pulled out. They were engaged in litigation. They didn’t have any other source of money; you were it. What did you offer? Did you offer to cover all their expenses? Did you cover their legal fees in this matter?
Hon. Christopher Bentley: The expenses that are part of the relocation cost are there. They add up to $180 million. Any other part that was the subject of the negotiations is reflected in the net revenue requirement price of $12,400. So lots of discussions; lots of items were talked about during the course of the negotiation.
Did money flow to pay off things like creditors? Absolutely, because the financier of the project was financing a project and there wasn’t a project proceeding at that site. When you take a look at the Mississauga site-specific costs for goods and services that can’t be used of $85 million, there were people who had to be paid. Somebody paid them, and they’re reflected in our price, in our $180 million—some of which were paid along the way and some of which have since been paid. But they’re all reflected in the $180 million.
Hon. Christopher Bentley: That would be great. Can we get extra copies? When I spoke yesterday about the cost of relocating the plant, and I broke out the Mississauga site-specific cost for goods and services that can’t be reused at the new location—
Hon. Christopher Bentley: Yes. I’m providing a copy to everybody, Mr. Chair, while I answer the question so we don’t grind up his time. When I spoke to the site-specific costs that can’t be reused and said it’s $85 million—when you talk about labour or equipment storage or transportation, those are things that have been paid for. So, yes, it’s part of our $180 million. But if you look to the bottom, there are additional, Mississauga site-specific costs, $7 million. That’s what we anticipate for bills that haven’t come in yet, and yes, the people of Ontario are responsible for those.
Minister, Ontarians as well as people in my beautiful riding of Richmond Hill are all benefiting from the investments they have made in our green energy and renewable energy. By doing that, they are also helping us to reduce our dependency on fossil fuel and advancing our green energy strategy. What do you think is the potential for Ontario to become a leader in green energy initiatives globally?
We have been reducing our dependence on coal. We made it clear in 2003 that we were going to do that. At the time, it had climbed to about a quarter of the electricity that we actually generated, through coal. A lot of hard work by Ontario families and businesses over the past nine years has enabled us to get down to the point where the actual amount that we use is less than 5%. We have capacity for more than that, but the actual amount that’s used is less than 5%. We’re getting out of coal. We’ll be out of it no later than the end of 2014.
When we launched the Green Energy Act back in 2009, it was with a twofold purpose: Make sure we built on the work that had been done in the years before—through the RES I and RES II RESOP programs, renewable energy approaches. This one used a feed-in tariff approach, used around the world, to make sure that we could not only accelerate bringing on green, renewable, clean energy, such as solar, biomass and wind; it also did it in a way that created jobs in the province of Ontario. We did that by requiring that a certain proportion of every project have Ontario content—made-in-Ontario parts, by Ontario businesses, hiring Ontario workers. It has been very successful: 20,000-plus jobs already; billions of dollars in investment; we see plants all across the province of Ontario.
We’re now in a position—and we’ve just conducted a review of the Green Energy Act—where we expect that over the next two years, as the projects get built out—many of them have worked through their approvals process—we will see more renewable energy projects plugged in in the province of Ontario with more Ontario-made parts by Ontario workers than cumulatively have ever been done in our entire history. That’s a strong statement of an industry here in the province of Ontario.
The question then is—and that’s the one you ask—how do we become a leader in the world? Well, first of all, do we want to be? Gosh, the market for clean, green tech is in the trillions by 2020 and beyond—trillions—and that includes renewable energy. We already have businesses such as OSM Solar down Welland way, such as CS Wind down Windsor way, such as the racking outfit up in Scarborough—the name of which has just eluded me—that already export around the world, different parts of the world.
My colleague Minister Duguid and I launched about two months ago an export strategy. An export strategy consists of a number of different steps, but the goal of the export strategy is to make sure that we not only support our businesses here in the province of Ontario to develop high-quality products, but we find ways of smoothing their ability, facilitating their ability to export this expertise around the world. If you think about it, we have very skilled workers, knowledge-driven workers, in the province of Ontario, so we can develop the products, we can innovate in the design; we’ve got the workers who are trained, through our training systems, to produce them, and it’s high quality, so we can export around the world. It really is a virtuous circle there, and that’s the goal of this particular approach.
One of the parts of that is to make sure that we are visible at different trade shows around the world, and my colleague Minister Duguid is handling that part. Another part of that is that we have a clean energy task force; Annette Verschuren is chairing that, and we’ve already had a meeting. Part of the goal of the task force is to make sure that people who have been in the industry and have expertise can let us know their views on how we best approach, from a government perspective, highlighting what we do, facilitating what we do, to make it even better and to better position ourselves for an export industry around the province of Ontario. By doing that, we encourage even more longer-term jobs here in Ontario.
Mr. Reza Moridi: Thank you very much, Minister. Minister, as you know, in the 1950s, when nuclear power plants became the technology of the day, the province of Ontario, by the introduction of Candu reactors, became the pioneer of this technology in the world. I’m pleased to hear that now, with the introduction of renewable energy, our province will become one of the leaders in this industry in the world.
Hon. Christopher Bentley: Well, it didn’t surprise me that you asked—in the preamble to that question, you asked a little bit about nuclear energy, or you mentioned a little bit. We did just celebrate the 50th anniversary, and I know, as a nuclear physicist, you’re always very interested in the developments around the world. You’re absolutely right: We are world leaders.
Smart grid: A lot of people have been talking about smart grid. To be clear, I don’t profess to be the engineer and I don’t profess to be the expert. Really, what a smart grid is all about is taking advantage of the technological advances that we’ve seen around the world in computers, phone technology and digital technology, and applying it to the poles and wires that are used to transport and transmit the power that we generate. Can we do it and can we control transmitting that power in a way that provides us information; that we can do it more effectively and more efficiently, so for less cost; that we can identify challenges, stresses on the system and problems, and fix them before they become a break? Can we reroute electricity around problems? The answer to all those and many other questions is, “Absolutely, yes.”
We have spent a lot of time over the past number of years putting in smart meters. Smart meters really are the beginning of the smart-grid solution, because smart meters are about collecting information that was always there—we just never had access to it—collecting information, putting that together, making it available to a system—and this is where the grid part comes in—that can then operate digitally so that you take advantage of the information and manage the system much more effectively.
Sometimes you hear about issues where a tree has gone down and cracked a line following a big windstorm or an ice storm. Years and years ago, you would need to find out about it first; then you’d need to dispatch the crew; then you’d need to figure out the repair, which might be simple and might not be. Today—and we’re just on the leading edge of the smart-grid issue—a control room will know long before anybody calls in. The control room will know. The control room can figure out, to some extent, how to reroute power to many of the homes and businesses affected. Many of those homes and businesses may see next to no break in their power, or a very short break at the same time as the crew is dispatched to make the longer repair. This is the type of power that we now have—we sort of take it for granted on our portable phones, our hand-held devices—as a result of technology. Really, with the smart meter, we’ve done the equivalent of going from the rotary-style phone to the smart phone, except instead of taking 50 years to do it, we’ve done it in five.
Some 4.7 million Ontario ratepayers have the smart meter, which is collecting information, which we can use for their benefit, to manage their power use and reduce their bill. We can also use it for the grid’s benefit. We do have a smart-grid fund that enables us, through this fund of $50 million, which is revealed in the estimates—and this is estimates committee so it’s probably not a bad thing to talk about something that’s actually in the estimates. The $50 million over four years allows innovators to apply for a grant. It’s not often a huge grant, but it makes these very innovative projects possible. These projects are ones that can better utilize information, for example, that’s collected by smart meters and turn it to the use of families and businesses in a certain area or allow storage opportunities to be implemented. Storage, as you know, is that huge opportunity that the world is looking at, that we want to be leaders in, and we’ve got a number of initiatives out there that we’re funding through the smart-grid fund, and many more that would like to be funded.
There are a lot of opportunities out there to build on the knowledge we already have with respect to the smart grid and go further. Many of the local distribution companies are already implementing smart-grid initiatives of some sort, and a number have been supported through the smart-grid fund already. We look forward to supporting more in the future.
Mr. Reza Moridi: Thank you, Minister, for that explanation. It seems, Minister, that our investment as a province in smart meters has been an excellent investment in terms of the modernizing and management of our power distribution system and also the management of our power system in the province.
You talked about the status of smart grids in Ontario—the technology is relatively new—and that we are making great progress, as you explained, in that area in the province. So how would you see, again, our role in the future to become a leader globally in the area of a smart-grid system and the electricity industry?
Hon. Christopher Bentley: That’s a great question. I think it was three or four months ago that 16 international journalists came to the MaRS centre on a conference that MEDI had set up, and energy was part of it. What they were interested in was what Ontario was doing in terms of the smart grid and smart meters. They had come here from all around the world, and the reason they’d come here is because they knew we were leaders, leaders in so many ways. In fact, the smart meter implementation is one of the largest, most successful implementations of smart meters anywhere in the world—basically on time, on budget, pretty much. The smart meters themselves now present us with a huge opportunity to collect information, but to use it for the benefit of families and businesses.
You might say, “How can I benefit, if I’m a family, from information collected on the meter?” And it’s collected on a minute-by-minute basis. Well, we have time-of-use rates. We have time-of-use rates that reflect the cost of actually generating the electricity at different times of the day. So if there is a discount, as there is, for off-peak hours, anything you can do in the off-peak hours cuts your energy cost almost in half, as opposed to doing it in a high-peak time. So if the smart meter is collecting information showing that you’re using a significant amount of power in high-peak times, you’re going to ask yourself, “Well, how can I switch that to low-peak?” You then combine that with some simple technology such as timers and, where you’re able to, you shift so you accomplish exactly the same task at an off-peak time.
How does that affect a business? Well, businesses may have specific production techniques that are very highly energy-intensive, but those techniques may not run 24 hours a day. If a business knows when the particular high-cost period is and they know what is causing a high energy use, they may—not necessarily all the time, but they may be able to shift their production to a lower-cost or off-peak time, or minimize their high-peak consumption. They accomplish the same task, minimize their costs—the same approach that businesses use for every part of the production stage, but the information collected by the smart meter really empowers. It gives us information. At the end of the day, people want to know. They want to know, and they want to know how this information can be useful for them.
Well, what we’ve done over the past five or six years is put in place this system of smart meters. We’ve got them everywhere. We’re collecting the information, and now the challenge—and it’s being met in part through projects from the smart-grid fund, in part through the innovation of the local distribution companies, and in part through the research and the innovators. What we’re doing now is figuring out the easy ways of turning this information into something that’s of immediate benefit to families and businesses. Let them manage their cost if they wish to do so.
That has, obviously, system benefits. There are huge system benefits from smart meters and the smart grid for all of us, but just for specific families and businesses, they can take this information that’s collected by the smart meters and turn it to their great advantage.
It is one of the areas where we’re working really hard, because this is an area that really can help the bottom line of families and businesses very, very directly. There are a number of outfits already out there that do it in different innovative ways, places like Lowfoot and others that take the information and give it to the consumer in an easier-to-use way.
One of the smart-grid projects that is being funded through the smart-grid fund is something that Energate is involved in, and it’s really going to empower consumers, about 1,000 consumers to begin with. It’s giving them information in a way that enables them to manage, either from in the home or from outside, their energy use, and to reduce their costs.
Hon. Christopher Bentley: It was set up about a year and a half, two years ago. It’s a $50-million fund over four years. Last year, my colleague Minister Duguid issued a smart-grid centre fund up in Markham with GE. That’s proceeding.
This year, we just had a round of grants. There were about 20 grants for about a little under $20 million, different projects all around the province of Ontario. These are decided on a very competitive basis. There were lots more applications than there were grants given out. They are decided through a review process, and it’s a very rigorous one, to make sure that the application for funds fits within the criteria of the smart-grid fund, that it’s something that has not already been duplicated or done somewhere else, that it’s going to advance how you’re getting good value for money and that there’s going to be some benefit accruing to the province of Ontario in the future—immediately, of course, of jobs, but system benefit to the province in the future. There are a lot of very exciting projects out there. I’m really quite interested in what—
Mr. Rob Leone: Thanks, Minister. You kind of gave us a little smile over here that we hadn’t asked you any questions on the actual estimates, and I think I did ask you a question on the estimates. I have asked you many questions on the estimates; you just haven’t answered those questions. So maybe I’m going to ask a question on the estimates that might allow us to have a discussion here.
I’m flipping through the pages of the Ministry of Energy here in the estimates binder that was issued to all MPPs’ offices. I’m wondering where this $180 million is coming from with respect to the relocation of the Mississauga gas plant. Can you point out the line?
Hon. Christopher Bentley: Thanks very much. There had been no agreement concluded when the estimates were prepared. There was no net crystallized cost at that time. The agreement concluded on Monday between Greenfield South Power and the Ontario Power Authority—that’s the point at which the $180 million of cost that can’t be reused, can’t be recovered, can’t be repurposed, comes from.
Hon. Christopher Bentley: Well, as I say, that decision has—we have not had the further discussion. If your party or the NDP has some advice, because I know you both committed to cancelling the plant that was going in Mississauga, as to where you would have taken the money from, I’d be very happy to receive it and to include it in the considerations that will be undertaken.
Mr. Rob Leone: You know, Minister—and this bears repeating; we’ve said it many times—that we would never have sited that plant in Mississauga to begin with, and you haven’t tabled any documents pertaining to why you sited it there to begin with. That was your decision and your decision alone, so this is $180 million that actually falls on your government and such.
Mr. Tabuns, in his line of questioning, raised an interesting point for me as well with respect to—that this decision was through a Liberal Party press release. I’m wondering, Minister—and I’ve asked this question before, and whether you can care to comment now—does this simply prove that this was part of the Liberal Party seat-saver program in the last election?
Hon. Christopher Bentley: Well, thanks very much. We had made quite clear when we initially made the commitment during the campaign—“we” meaning the Liberal Party—that it had become clear that locating a plant in Mississauga was not the appropriate way of proceeding, was not going to work—
Hon. Christopher Bentley: I take it that the PC Party reached the same conclusion, because it was a PC press release of the same day that indicated that a Tim Hudak government will cancel the plant. The NDP followed up two days later with similar comments.
Hon. Christopher Bentley: So at the end of the day, to implement that fact, we are all in—or would all have been in exactly the same position at the conclusion of the election. And then the question is, do you relocate it? That was our position. And do you negotiate hard to achieve the best possible agreement? And that’s what we did.
Hon. Christopher Bentley: Well, those are independent discussions. The new gas facility will be a combined-cycle facility, as the old plant in Mississauga was proposed to be. So it’ll be similar—it’ll be the same type of plant, using the same turbines, with the same maximum capacity.
It has, to my understanding, always been anticipated that if the Lambton coal generating facility is closed down and converted to something, it would be a single-cycle plant. They have different properties. Single cycle, as you probably know, has much faster turn-on/turn-off capacity.
Hon. Christopher Bentley: I never said that. I’m not sure where you got that. We’re closing coal. We’re not putting it on standby, as your party seems to think from time to time. We’re closing, we’re getting out—
Mr. Rob Leone: That’s the reason I asked the question. If you’re going to close the coal plant in 2014 and you’re building a new plant, isn’t it just simply cheaper to retrofit the coal plant that’s there and save some money? You’re incurring $180 million and we’re looking for some sort of accounting and accountability with respect to spending money of that magnitude on the relocation of the Mississauga gas plant. So why can’t we choose or why wouldn’t we go for a cheaper solution if retrofit does in fact prove to be cheaper?
Hon. Christopher Bentley: There are apples and oranges here. The agreement to relocate the plant was in the best interests of Ontarians. We get the capacity, we get a functioning plant; Greenfield South Power is able to construct and operate a plant, which is what they were intending to do in Mississauga. We’ve been able to fix the cost at $180 million for the relocation.
The future of the coal-burning facility is a separate discussion. Whatever happens in the future, coal will be done by the end of 2014. There won’t be any more coal generation there. Whether it is converted or whether it is not converted to something else will depend on a whole range of issues. As I indicated yesterday in answer to some questions after the press conference, they’re not the same conversation and they’re not transferrable costs.
Mr. Rob Leone: I just want to state, Minister—you said this is in the best interests of Ontario—I think this is actually in the best interests of the Liberal Party of Ontario, not the people of Ontario, who now have an added $180-million charge, whether through their taxes or through their rate increases, to pay for. I don’t think under any circumstance could that be construed as being in the best interests of Ontario.
Hon. Christopher Bentley: What I was saying, sir, to be very clear, is that once we all made the commitment that the Mississauga plant would not proceed, then the agreement that was reached was the best agreement in all of those circumstances.
Mr. Rob Leone: Minister, I notice that you’ve transferred the Mississauga gas plant from a Liberal-held riding to a PC-held riding. I also understand that in the particular case of Cambridge, in my riding, the OPA has issued some site requirements for a potential gas plant in that riding, one of which is that the site should be located near the Preston transmission station. The closest site to that Preston transmission station is a site owned by TransCanada on Witmer Street in Cambridge. Does this mean that the government is going to site a new gas plant or move the Oakville gas plant to the PC riding held by myself?
I hope that when you say that it is being located in a Tory riding, you are saying that with a sense of optimism about the future, because we certainly have had a number of letters from your colleagues—MPP Bailey. In fact, your leader has been on the CBC indicating that he would go to willing communities—and he mentions Lambton—with respect to gas facilities. So a number of the local elected officials down that way seem to have been, over the past several years, quite interested in locating gas facilities in that county and that region. I know when you say we moved it to a PC riding, you’re saying that’s a good thing.
Mr. Rob Leone: I do want to make a brief, brief comment on that, Minister, just before I hand it off to my colleague here. We believe that there has to be proper siting of these plants to locations that have community acceptance, to sites that are the lowest-cost. We have a set of criteria that we use in the siting of these plants. We’ve asked you to table those siting requirements, but you have refused to do that.
Mr. Rick Nicholls: Thank you very much, Mr. Leone. Minister, we know that the gas plant will be relocated to the community of Lambton in southwestern Ontario. That’s where I hail from, in that general area. Given the widespread opposition to the gas plant in Mississauga, as you say, and the opposition to your other energy experiments throughout the region, can you tell us what community consultation took place with the people of Lambton prior to making this decision?
Hon. Christopher Bentley: Thanks very much. You can appreciate that for exactly the same reasons, or some of the same reasons, I was saying to the committee that I didn’t have a further update during the course of the confidential negotiations. We respected and protected the confidentiality of the discussions.
The agreement contemplates moving the plant and locating the plant on the OPG site, where there has been electricity generation for some decades. It is a coal facility. There have been numerous comments, letters and requests by not only elected officials throughout the county but by your colleagues that further gas generating facilities be located there, either through conversion—or generally an interest in gas plants, whether Oakville or Mississauga.
That part of the world down there has long been known as an energy hub, both through generation, through what’s affectionately known as Refinery Row. Recently, I think you’ve got the largest solar farm—or it was the largest solar farm in North America before; not anymore, I don’t think. So it’s very much an energy hub, and it is a site that has long been used for electricity generation. And there is a gas plant, as I recall, just down the road near—I’m not sure it’s as far as Corunna. I’ll have to take a look at the map.
The original contract with Greenfield South Power and the OPA provided a power purchase agreement, and that is that Greenfield South Power would build, on their own dime, construct and operate a gas turbine electricity-producing facility. Their contract is for what’s known as a net-revenue requirement that they get from the Ontario Power Authority every month, but they’re responsible for the construction. This contract is exactly the same. It’s not exactly the same in all of its terms, but it’s the same approach. Greenfield South Power builds, constructs—they’re operating the gas turbine, electricity-producing facility. They have a contract with the Ontario Power Authority, which is a power purchase agreement where they get what’s known as a net-revenue requirement every month. It so happens that the face amount is a little less than the other one—$12,400 versus $12,900—just the face amount. There are some different terms.
Mr. Rick Nicholls: I see. Minister, the Society of Energy Professionals said today that the relocation of the Mississauga gas plant was a decision made on “political expediency.” Southwestern Ontario is already serviced by the Brighton Beach plant in Windsor and the gas plant in Sarnia. Could you please bring forth the documents to this committee demonstrating the need to move this plant to Lambton?
Before you are able to respond to that, I have a press release that came out today, again from the Society of Energy Professionals, and it has stated that, “‘The government is trying to paper over the mistakes that they made in cancelling the Mississauga and Oakville gas plants,’” and this is according to a gentleman by the name of Sheppard. I don’t have his full name here. He goes on to say, “‘Unfortunately their mistakes are being papered over with taxpayer dollars.’”
Then he goes on to say, “‘The government may be portraying this as a simple land swap, but at the end of the day it is a de facto privatization of publicly owned electricity generating assets.’” That was Sheppard. He goes on to say, “‘The other shoe to drop will be the now inevitable closure of OPG’s existing Lambton generating station which the government had long suggested might be converted to a gas/biomass generating station, which would have been the cheaper option.’”
The article then goes on to say, “Southwestern Ontario is already served by an existing 1,000 MW gas plant in Sarnia and the 540 MW Brighton Beach plant in Windsor. If OPG’s existing Lambton coal plant were converted to gas/biomass fuel it could generate between 800 and 1,000 MW, suggesting the new Greenfield Lambton plant is a product of political expediency, not system necessity.”
Again, Minister, my question is: Could you please bring forth the documents to this committee that would in fact demonstrate the need to move this plant to Lambton, despite the fact that this particular press release has been brought forward by the Society of Energy Professionals?
Hon. Christopher Bentley: I very much appreciate you quoting from a press release that I haven’t seen. We are talking about a plant that had been contracted as early as 2005 as an independent facility. I didn’t think that your party was necessarily opposed to private generation of power, but if that is a new position, I’m happy to hear that, or at least I’m happy to have additional information. I’m not necessarily happy to have the position, but happy to have additional information on that.
As I was indicating to your colleague a few minutes ago, this plant will be a combined-cycle plant. The conversion—and you’re right; we’re still taking a look at that possibility—would, as I understand, be of a different type. It would be a single cycle. It has different properties: a little less efficient in the production, but has ramping qualities up and down that are hard to match through others. We’re still taking a look at that.
We have lots of transmission capacity there, so we can take advantage of that with both the new and whatever is done with the Nanticoke—with the Lambton, sorry, coal generating facility. So that’s very much in question.
As I said before—I mean, I’m just sort of trying to follow the logic of what you’re now asking me. Your leader has said on CBC News—I have a quote here from October 5, 2011—“A PC government would go to willing communities like Nanticoke and Lambton, which already have transmission lines and a workforce at power production facilities.” So I might have thought that you would be at least recognizing that locating this gas electricity-generating facility on a site that your leader has said is one we should be looking at would be the cause for some—I guess “celebration” is too strong a word, but some recognition that we were following some suggestions or at least echoing some suggestions that your leader has spoken of. Your colleague MPP Bailey has also said that we should be looking at his area as we consider what’s to be done with Mississauga. I believe he—
Mr. Peter Tabuns: Thank you, Chair. Thank you, Minister. Minister, as I understand it, the site that the Greenfield plant was going to be built on will stay in the ownership of the partnership, Eastern Power. Is that correct?
Mr. Serge Imbrogno: —which is about 300 megawatts per month. But the contracts have—they’re fairly complicated contracts. They have a deeming provision where the net revenue requirement covers fixed and operating costs. But as the facilities are required to run, if they achieve a certain market price, that’s part of the contract. As they run and get revenues from the market, that reduces the net revenue requirement.
Mr. Serge Imbrogno: It would depend on how much they run, so it’s not really based on a per kilowatt hour; it’s based on this deemed provision and kind of a capacity payment to cover their ongoing costs.
Hon. Christopher Bentley: But as you said, if they run and generate electricity and sell it, they’ll get a price back for that. The price they will get is what they could get on the open market, whatever that is, or whoever is contracting to pay for it.
I think what the deputy was saying, and correct me if I’m wrong, is that at the end of the month, if they’ve earned $100 by selling electricity—I obviously made up the figure—then you take that away from the net revenue requirement.
Mr. Peter Tabuns: So we can order them to produce power. Ontario can order them to produce power because we need it, otherwise why would you produce power, incur expenses and have your revenue reduced?
Mr. Serge Imbrogno: Right, and if they don’t run when they’re deemed to have run, then they lose revenues. The contract is structured so that there’s an incentive for them to run, when it’s appropriate.
In the course of the negotiations and the discussions, which were very long and protracted, from the time that the price was arrived at until now, there’s obviously inflation. There’s the escalation of construction costs. There may be other costs that were lower before. Costs usually don’t go down in construction; they tend to go up. That would dictate a raising of the price.
Hon. Christopher Bentley: There were a number of other issues taken into consideration in arriving at the price, so it’s not an easy flow through. That’s why I said, in answer to a question, that the face price is a little lower. I’m not necessarily suggesting that you draw from that conclusion that it’s cheaper, when you consider all the factors. There’s a very complicated series of factors here, and you have to throw them all in. We’ve had eight to 10 months’ worth of very complicated negotiations back and forth with lots of different price questions.
Hon. Christopher Bentley: I can’t speak for Greenfield South Power and any agreement they have. My understanding at the time the agreement was signed is that they didn’t have a financier for the project. They’ll go out and find one. You need an agreement to find one. Who that will be, I don’t know.
Mr. Peter Tabuns: So they have a contract but they don’t currently have the money. They may or may not. And is there any consideration that the OPA or the government of Ontario will provide the financing for this?
Mr. Serge Imbrogno: I think Greenfield would do its best efforts to go out and get financing. The expectation is, like any other generator that gets a contract that has a net revenue requirement going over 20 years, that that is totally financeable in the market. Our expectation is that Greenfield, like any other generator, will get financing, finance the project and move forward. That’s the expectation.
Hon. Christopher Bentley: The reason I’m hesitating in answering your question is, my understanding may be yours, but I’m not Greenfield South Power; I don’t have access to their conversations and I wouldn’t want to say something on their behalf today that may or may not be the case.
What I know is that the $88 million in the backgrounder was the net settlement of all the lawsuits and the issues with respect to EIG. You saw the little asterisk at the bottom of it about the principal.
Mr. Peter Tabuns: Yes. The question of supply to Mississauga and Oakville: Has the IESO, has the OPA, gone back and looked at their initial projections that told them that a plant was necessary in this area?
Hon. Christopher Bentley: Let me answer it in this way, and I’ll build on the answer I gave you before with respect to Mississauga—and we’re confident that we can meet the needs today and in the future. There is constant planning going on, not just for those regions but throughout the province of Ontario. When the decision was taken with respect to Oakville, we spoke, and have spoken about since, of a transmission solution, which means it’s generated somewhere else and it’s brought in. The IESO and the OPA will constantly plan to make sure that that will happen and can happen. We’re confident that it can, and we’ll continue to be confident in the future.
Hon. Christopher Bentley: That’s a great question, asked in a very clever way. I wish I could tell you when I would have more to report on the Oakville discussions. That’s really what you’re asking me about.
Mr. Peter Tabuns: You’re telling me that there’s a transmission solution that’s going to deal with the problem you originally saw. You have confidence that that solution will be implemented. In which year will you have confidence?
Hon. Christopher Bentley: It has to be implemented on a minute-by-minute, day-to-day basis, doesn’t it? Right now in Oakville, the Halton region, we’re able to meet their electricity needs through various sources. We’re confident that we’ll be able to meet them in the future.
As you know, the supply-and-demand situation has been fluid over the past number of years. As a result of the worldwide economic recession, the demand curve did not recover as quickly as others hoped—we all hoped. Conservation has had a significant effect.
Over the past four weeks, as we’ve seen, weather events—you asked me the last time about weather events—are an issue. When we sit here in the province of Ontario now at the end of rather high temperatures and take a look at North America, and say: Am I glad we’ve got all that generation capacity available? You’re darn right, I am. Did I think two months ago, when I was answering other questions about potential surplus, that I predicted as hot a four-week stretch as we’ve had? No, I didn’t predict that. But maybe we’re into a slightly different time—and that’s one of the things that you were hinting at, I think, in your previous series of questions, that we have to be prepared for, and we are prepared for and will continue to be prepared for. So I’m okay with that.
Hon. Christopher Bentley: And if it ran for 24 hours a day and ran straight without a break for every single day of the year, I could calculate that out. I’m not sure whether gas plants actually do that or whether they’d be overstressed. I suspect not.
Mr. Peter Tabuns: There were reports in the paper, about a week ago, that Bruce nuclear was not meeting its deadline for restart of its refurbished reactors, and there are significant penalties attached to not meeting that deadline. Have they met their deadlines or are they paying those penalties?
Hon. Christopher Bentley: I can answer the first question. There were in-service dates for the refurbished reactors. They are past the in-service dates for those two refurbished reactors. The contractual issues are being considered and dealt with between the Ontario Power Authority and Bruce.
Hon. Christopher Bentley: Well, I’m aware of a contract and I’m aware of the issues, generally speaking. My understanding is there has not been a conclusion to the discussions about reasons, results, as a result of any contractual and other provisions.
Mr. Serge Imbrogno: The units were supposed to be on by July 1. Because of that, at this point, the units that are running are receiving the wholesale market price as opposed to the contracted price. The discussions between OPA and Bruce are continuing in terms of whether they accept that there was a force majeure event. But as of this point, Bruce is receiving the wholesale market price for the units that are running, 3 and 4.
Minister, you announced that you had come to an agreement with SNC-Lavalin and Westinghouse for construction plans, schedules and cost estimates for the new build at Darlington. Can you tell this committee what is being paid to those companies for doing that work?
Hon. Christopher Bentley: Ontario Power Generation reached an agreement with those two companies, not me. They reached an agreement with them to prepare the various proposals and estimates. Although I am advised that the specific price between the two is commercially sensitive—they had hard negotiations with each—the ballpark total price for the two is less than $26 million.
Mr. Peter Tabuns: So we’re paying each of those companies about, and I’ll just split the difference, thirteen million bucks—maybe I’ll be generous: $12.5 million each—to prepare essentially a bid on this new build.
Hon. Christopher Bentley: OPG has determined that the best way to be able to know costs, know construction timelines, know risk so that they can determine whether it’s financially the right thing to do, is to get these companies competitively to put together a hard estimate. It is not unusual, I understand, in large construction to get those who would put together such a bid—to provide them with some funds to be able to do that. The $26 million would be roughly the equivalent of somebody deciding to pay $50 in market research for a $20,000 car, depending on how you calculate out what the net cost would be.
So is it appropriate for OPG to ask for two to prepare this? Yes. Was it their decision to pay the two entities to do this research and to get an in-depth, usable product so they’d be in a better position to make a decision? Yes, because, as we’ve discussed before, these are very-large-ticket decisions and we want to make sure that if a decision is made—if it’s decided that we need the power, if it’s decided it’s going to be nuclear—we have as good an idea as possible on what the costs are, what the timelines are, so we’re better able to make the decision, better able to manage the decision. So they’ve taken this approach.
Mrs. Donna H. Cansfield: Thank you very much, Chair. Thank you very much for the opportunity to have some discussions with you, Minister. As you would know, the first place I’m going to go is conservation.
You’ve already discussed the issue of where it’s built, and then there’s the issue around distribution. I think it’s important, as well, to look at our total supply mix also from the demand-response side and look at the issue around conservation and the work that’s been done.
I’m going to ask you some questions that deal with the whole issue around load-shifting, demand-response, going from peak to off-peak, and the work that’s been done in both commercial—which I think is really significant—and residential, but a little bit more so.
Hon. Christopher Bentley: And I could have anticipated that that was the first place you were going to go, because you started every speech, when you were the minister, with conservation. I know that—very good leading work.
Ms. Sue Lo: Okay. There are a vast number of programs now that have been launched recently. In 2011, though, there was an entire suite of programs, in fact, on conservation launched by the OPA, and those programs are called saveONenergy. They were launched in 2011. Those programs target every sector, so they target the residential and commercial sector and the industrial sector too. In terms of what they do, I’ll give you some examples of business programs, for instance.
The business sector is highly complex. It’s highly diversified in terms of small businesses, medium-sized businesses and what the businesses actually do. First of all, there are energy audits available to help businesses realize what it is that they use their energy for. Consultants who conduct these energy audits look at the energy needs, the electrical needs in terms of heating, cooling, ventilation and lighting. You’ll probably know from your time at Energy that HVAC and lighting systems are the most energy-intensive for any business. In fact, HVAC, I think, is the largest expense in terms of the electricity portion, responsible for about 60%, and lighting accounts for about 30% of any business’s use. If you focus on those two elements and design systems that help to make the heating and cooling ventilation systems more effective—the building insulation, for instance, is another huge factor—and then also focus on the lighting, that’s what would really help with businesses.
I’ll give you an example of one particular case that we had. It was a water treatment facility in Hamilton, and they had a pumping system, so you have motors and pumps and air conditioning systems that need to be changed out and retrofitted. This particular water treatment plant in Hamilton went through replacing inefficient equipment and lighting, and saves around $400,000 annually now. The $400,000 actually represents about 20% of their total energy consumption, so that’s a huge thing.
I think your question was also related to demand response. So in terms of demand response, businesses, large and small, can sign up for the demand response programs that the OPA offers through their LDC, local distribution company, so businesses have incentives where they can sign up for the demand response programs. By signing up, what they commit is that they will not use their energy during the peak periods, which is most critical to the system’s needs, and they shift their use to the off-peak periods, so that’s a tremendous benefit to the system.
I should also comment on lighting, because lighting is something that contributes to 30%. So there is a saveONenergy small business lighting program that’s currently offered by LDCs. An example of a business that went through a lighting retrofit is a motorcycle shop. I’m giving you small and large examples. A motorcycle shop used a $1,000 grant from the OPA and Guelph Hydro—this is part of the Power Savings Blitz program—and they replaced their overhead lighting in their workshop, which was inefficient. The grant covered about 80% of installing and purchasing the new lighting and the customer provided the balance, so they did also pay a share. But the total installation time took about two weeks, and now the customer is saving 10% each month, resulting in about a $70 saving each month, so really worthwhile. These programs and rebates apply to everything from clothing stores to restaurants, drycleaners, medical offices and the very large industries as well.
Hon. Christopher Bentley: —as a result of the conservation initiatives to date. We have very aggressive targets, as you know, like 7,100 megawatts by 2030, 28 terawatt hours, which, on the basis of current demand, is almost a 20% reduction in our overall use—but already, 1,700 megawatts. Now, that is—well, you know; that’s huge. That is absolutely huge.
I think, to be fair, we need to give a lot of credit to families and businesses for really taking the lead on this, taking the good programs that are out there, combining with a lot of good homespun commonsense. They’ve made these programs work, because that is a huge reduction. We’re talking about a 300-megawatt gas plant over here, so that’s five of those plus. That is huge, and it underlines what you have always said, Donna, which is if you can save it, you’re not paying to produce it. And that is a big saving.
I’ll use the GTAA as a really good example. I think their cycle—off-grid plant is about 40, 44 megawatts. I think you should have an opportunity to talk a little bit more about some of those opportunities that are out there or have been taken advantage of.
Ms. Sue Lo: Sure. I can give you some other examples of success stories. For instance, there is the University of Guelph. Their library is called the McLaughlin Library. What the McLaughlin Library did was replace lighting and HVAC systems and reduced their electricity consumption by two million kilowatts a year. That’s huge. And they’re saving $180,000 annually. This library is large. It’s about 250,000 square feet. It was retrofitted with energy-efficient lighting and new lighting controls in 2008. So that’s a huge success.
In terms of typical office buildings, typical office buildings can go through access grants and incentives from BOMA, the BOMA Toronto conservation and demand management program. It’s funded by the Ontario Power Authority. A typical Toronto office building can receive a $50,000 incentive to go through energy-efficiency measures. This particular project, this particular office building, saved 33% of what that building would have consumed, by replacing their air conditioning—HVAC—system. That’s also huge. Over a million kilowatt hours per year were saved.
Mrs. Donna H. Cansfield: Thank you. We’ve talked a lot about what’s happening in urban areas. I know there’s the whole issue around distributed energy, as well, and that’s really the small energy and how it can be impacted—or impactful, I guess is a better word, for example to the agricultural and the related industries, i.e., greenhouses and such.
Again, I’d like to have in the record some of the suggestions and opportunities and how it represents that we’ve been able to save the dollars so that we don’t have to produce the energy, and how successful that program has been. I don’t know if you want to talk about fuel cells or biomass or Stirling engines. It doesn’t make any difference.
The biomass opportunity is a really interesting one. Europe, for a long period of time, has seen biomass as a way not only of generating electricity but, frankly, dealing with something that’s produced through agriculture and other ways. They don’t have the land that we have here. They don’t have as many opportunities for a landfill. They long ago figured out that they needed to get more creative about their approach to waste. You’ll know that Germany, Holland and a number of countries in Europe have long been leaders in terms of biomass.
One of the things that we started in the early days—and you were one of the leaders on this—was to look for opportunities here in the province of Ontario and work with farmers and the farm community to figure out how to use farm substances—biomass and others—in many different creative ways to create not only a way to better utilize them, but also a way to generate electricity.
There have been a number of projects throughout the province of Ontario that we sort of helped kick-start. The feed-in tariff provides a guaranteed rate for approved projects that are biomass or biogas. There are a number of these already. They’ve taken a little longer to sort of put together than maybe the wind or the solar projects have, but the directive that was posted just today, following up on the feed-in tariff review, provides a good, solid foundation for even more of this activity in the future. I’m really looking forward to the opportunity to see more and more of these bio projects of different types come to fruition and take shape.
As you know, one of the very large projects that we’ve been working hard on in a different area involves taking wood waste from the forestry industry. Can you take the by-product that we’re not otherwise utilizing and turn it into something useful? Pellets have been mentioned; fibreboard and other products, of course, are mentioned, but also electricity is mentioned. A lot of the work has been done by our colleague Bill Mauro, who has Atikokan in his riding, about what happens to that coal generating station when it closes down. We’ve committed to closing it down. We’ve also committed, working with Mr. Mauro and with the mayor, to convert it to bio products, and that very hard work is under way at the moment. That’s another way. That’s not agricultural waste, but that is forestry by-product.
How do you get more creative? At the end of the day, it all feeds into something that you’ve spoken about for a long period of time: sustainability. A sustainable society means that we’re using what we need to in the most effective and most efficient way possible, so we all get the maximum benefit out of it. We don’t have the luxury we might have had decades ago in just discarding things and forgetting about them and not seeing them, because they’re with us. Everybody wants to use our resources as productively as possible, and conservation, in all its forms—biomass, biogas etc.—is another way of utilizing what we produce in a very effective, creative way, minimizing ultimate costs to the system in the long term.
Mrs. Donna H. Cansfield: Thank you. One of the things, again, that’s been discussed a fair amount is the distribution of the energy and the ability to move from one place to another. If folks have the opportunity, I encourage everybody to go to the IESO and take a look at the Star Wars board, as I used to call it, where they actually track the distribution of the energy across this province and can tell where there’s an outage or a problem, and how they interact with the United States because we’re very much into a shared relationship, which we’ve had for many years.
Part of what also has happened in looking at the new gas plants is we’ve changed from a single cycle to dual—combined heat and power, a whole different approach from what was in the past to what’s in the future. Maybe you could speak a little bit about that planning process. Again, much has been said about, “Do you need it? How do you know you need it?” But it needs to be emphasized how this process actually occurs.
Hon. Christopher Bentley: Your question raises a lot of very interesting issues. There are some jurisdictions that derive all of their power from one source, or almost all from one source. That can have some benefits, unless something goes wrong with the source.
One of the great strengths of the province of Ontario is that we have a number of different sources of power. When one is having maintenance issues or, in the case of hydro—one of my favourites happens to be hydro—when there’s a drought in northern Ontario and there’s not as much water going to the hydro facilities, we have other sources to draw on. It’s very important to have a multiple of sources. It also enables us to look to the lowest-cost source and try to use our sources to minimize costs over the long term. In energy, you’re always looking over the long term.
In Ontario, of course, we’ve long had hydro, a great source, a reliable source, able to turn on and off very quickly—that’s really good. We’ve got some storage capacity in Niagara, for example, and we’re looking at other opportunities. We’re making some more hydro. We’re expanding Niagara Falls, of course, with the Beck tunnel, which will be huge, taking advantage of the generators we already have and just putting more fuel through them. I know my colleague Kim Craitor is really interested in that and has been there many times. You’re taking advantage of the generating capacity you have but effectively using more fuel. What’s the fuel? It’s water. It flows through; it’s just as clean as when it started.
This tunnel will take enough water to generate enough electricity for tens of thousands of homes without actually expanding the generating facility, simply by moving it from the top of the falls and down to the bottom. And, yes, don’t worry. The first call on water, as a result of a joint agreement between Canada and the United States, is always the falls. Power takes second place. It’s always the falls, which is very interesting.
What other sources do we have? My colleague Reza, my parliamentary assistant, spoke about nuclear power. We celebrated a 50-year anniversary. Ontario, for decades, has had a very strong, stable, clean, reliable and cost-effective nuclear industry. It has been about half of the generation we’ve used. Our intention is that it will continue to be about half of the generation we use. It runs. It runs reliably. It just runs.
Mr. Rob Leone: Thank you, Mr. Chair. I want to come back to a line of questioning I started with last time, one that deals with the question of taking responsibility, and the government taking responsibility, for actually siting the plant where they did. I have to reiterate the fact that the opposition parties did not site the plant there; it was the government that did that. Therefore, the government made the $180 million—to relocate the plant—their own mess.
As well, I noted before, Minister, that your response seems to be, “I wasn’t the minister at the time. Therefore, I shouldn’t take responsibility for that.” But I don’t think that answer really satisfies the people of Ontario. I think they want to know exactly who’s going to be held responsible for the siting of the plant where it was sited. I know you weren’t the minister at the time, but there was a Minister of Energy and that minister was a member of your party, and you have become the successor of that minister. Why are there two different rules of thumb here? Why does David Caplan get the boot for eHealth but Bentley doesn’t get the boot for Minister Duguid’s bungling of the siting of the Mississauga plant?
Hon. Christopher Bentley: Well, thanks very much for the question. I do appreciate that. You know, we’ve been very open about this. We said last September that as a result of very significant community pressure, advocacy and determination, both in Mississauga, Etobicoke and surrounding areas, building a plant, continuing with the plant at that site was just not the right option, and we committed, should we be elected, not to proceed with it.
I know that it was under our government’s watch that the original contract was signed. That’s quite clear. There was a rush—not a rush; there was a determination in the early years, 2003, 2004, 2005, 2006, to get as much generation up as we possibly could. We didn’t have enough. You’ll remember the brownouts in 2002-03. You’ll remember that notwithstanding increasing the amount of coal generation up to a quarter of our production, our actual capacity to generate electricity had gone down just under 10%, at the same time the population and the demand had increased 10% under the previous government’s watch—not a good direction. So we brought on the generation that was needed, generation that has been used, by the way, over the past four weeks to make sure we—
Mr. Rob Leone: Minister, I’m asking you the question of why there’s a double standard between Caplan and yourself in dealing with a decision that’s costing hundreds of millions of dollars. The situations parallel each other, and the people of Ontario are looking for someone to take responsibility for the decisions that your government has made. No one seems to be coming forward and saying, “I made a mistake,” and taking responsibility for those actions. I’m wondering why, Minister, aren’t you taking responsibility for those decisions, because you are now the Minister of Energy, on the original siting of the Mississauga gas plant, which was your government’s siting?
Hon. Christopher Bentley: We’ve been very clear: We said that, as a result of the position of the community in Mississauga and the surrounding area, we were not going to proceed with—the same position your party took and the NDP took.
Mr. Ted Arnott: Minister, I’m pleased to have this opportunity to ask you a few questions. I want to continue to focus on the announcement that the cost of relocating the Mississauga gas plant is $180 million. You said facetiously in a previous round that some might be celebrating the decision to relocate that facility in Lambton. I can assure you that no one in the opposition is celebrating. The people in Wellington–Halton Hills will be aghast to learn that $180 million of taxpayers’ and/or hydro ratepayers’ money will be expended to—
Hon. Christopher Bentley: At no time did I suggest in any way, shape or form that that was a cause for anything that you just said. I said the relocation of the plant to Lambton—that’s what I meant; that was very clear. It was also very clear from the quotes that I read from previous Tory members.
Mr. Ted Arnott: I go back to the decision that was taken just days before the writ period was actually initiated. In an effort to apparently save at least one Mississauga Liberal seat or perhaps others, the decision was made to cancel the plant. We initially asked questions about what the cost would be. We speculated that it might be in the hundreds of millions of dollars. That has now been confirmed.
I’m going to ask you this question. I assume, even though you weren’t the minister at the time of the decision—and I understand you have said publicly that, in fact, you learned about it in the newspaper, so there apparently wasn’t a cabinet discussion that you were aware of or privy to.
I’m going to ask you—because I assume that you’ve been thoroughly briefed on the decision since that time; I anticipate that you’ve had a lot of questions, probably in your initial briefing, as to what was going on with that decision—what was the role of the Liberal candidate in Mississauga South in the decision to cancel the Mississauga gas plant?
Hon. Christopher Bentley: We’ve been very clear on the position that we took when we announced that it was our intention, should we be re-elected as the government, to relocate the plant. I note that your party issued a press release the same day indicating the same intention. I am assuming that your intentions were not with respect to gaining a seat, but with respect to the appropriateness of locating the plant in that location in Mississauga. I’m assuming that when the NDP issued their press release or made their comments two days later that they wouldn’t build the plant, it wasn’t for the purpose of gaining a seat; it was for the purpose of responding to a community position. But if that’s different, I remain to hear about that.
Implementing that decision has meant a number of actions that we took since then, including a lot of discussions and decisions. We’re putting together and we’ll be releasing documents relating to those that are not otherwise covered by solicitor-client privilege. You’ll be able to make the determinations as you wish from the documentation.
Mr. Ted Arnott: Did the Liberal candidate in Mississauga South speak to you or, to the best of your knowledge, did he speak to your predecessor prior to the decision? If so, what did he inform you of?
Mr. Ted Arnott: Can you tell us what your conversations with him have been since you’ve been the minister? Perhaps you were privy to the fact that he was concerned about it prior to the election; I don’t know.
Hon. Christopher Bentley: I get lots of people having conversations with me about lots of things. There is no doubt that the Mississauga gas plant issue is something that I’ve been aware of, and I’m aware of the negotiations between the Ontario Power Authority and Greenfield South Power. He has not been part of those negotiations, nor has any other member. The negotiations speak for themselves in the resulting agreement. Whatever statements anybody has made publicly are out there to be made publicly. They’ll live by those discussions, and I know that there were—I anticipate; I don’t know, because I wasn’t following—comments in the press for all the candidates for that particular riding or any other at the time, leading up to the press release that was issued on the 24th of September.
Hon. Christopher Bentley: I don’t think it can be suggested that anybody who has got 15 hours’ worth of estimates and has been either here or on call for what seemed like dozens and dozens of days can be ragging the puck. Even hockey games, even with stop action, come to a conclusion after 60 minutes. I did play hockey as a kid.
Hon. Christopher Bentley: On the Mississauga issue, I have been available and answering questions from the moment I became the minister. Yesterday, I was pleased to be able to announce that I was in a position to provide a report with respect to the Mississauga matter. As you have seen from the material and the documentation you’ll be receiving with respect to this, there’ll be lots of information to talk about, but we have indicated very clearly that the cost of relocating the plant is about $180 million. There’s an outline of those costs there, and no doubt there will be details later on.
Mr. Ted Arnott: Did the Liberal candidate in Mississauga South, to the best of your knowledge, send emails, faxes, letters—any correspondence to your predecessor concerning the Mississauga gas plant, or has he sent any to you? If we could ask that those be shared with the committee.
Mrs. Donna H. Cansfield: I was just curious about the questioning about the Liberal Party as really being a part of the minister’s responsibility in estimates. I don’t think they’re the same. One is to deal with the Liberal Party, which is quite separate from this committee’s responsibility, which is to question the minister on the estimates from his ministry.
The Chair (Mr. Michael Prue): But the minister also has responded, pointing out that it was a Liberal Party announcement. He was the one who said that it was a Liberal Party announcement to start it. I don’t know how you stop the question, other than: The minister is very deft at handling that puck.
Mr. Ted Arnott: Well, we have to—I mean, people listening will assume and conclude that it was the Liberal campaign team that initiated the decision resulting in the $180-million penalty to the people of Ontario.
Hon. Christopher Bentley: When the issues surrounding the decision to work to relocate the gas plant were announced in our press release, were confirmed in your press release, were confirmed by NDP comments within the space of about three days—I think the people of Ontario can draw whatever conclusion they wish to draw, one of the conclusions being that we were all making exactly the same commitment at exactly the same time and would have been in exactly the same position when the election was done. What we have done over the last eight, nine months is to bring that—
Mr. Michael Harris: All right. Minister, thank you. Yesterday you actually were quoted in the Globe and Mail as saying, “Last year, after listening to the community’s concerns, our government made a commitment to residents in Mississauga and Etobicoke to relocate the Greenfield South Power natural gas plant.” What specific concerns raised by those residents convinced your ministry to cancel this project? As a follow-up, because I know we’ll drag this one out, how on earth, through that process or the environmental site plan assessment, did they miss those concerns?
Hon. Christopher Bentley: You’ve mentioned the approval process. There is a fairly lengthy approval process at a number of different stages, without going through the details, unless you wish me to, that took place, in this particular instance, over a number of years. As that came to a conclusion, as it became clear that there was going to be a plant located on this site, my understanding is that community comment, however you characterize that, built quite significantly and continued to build. As the press release and subsequent comments have indicated, we responded to the wishes of the community in the surrounding area and took the position that we did.
Mr. Michael Harris: Thank you. You know, Minister, obviously, paying $180 million to relocate a power plant is a big price to pay to save Liberal seats. In my community of Kitchener–Waterloo, 20,000 people are without a family doctor. I want to just run out some stats in terms of what $180 million could in fact pay for, to provide help for those 20,000 folks in my community of Kitchener–Waterloo. It would provide, in fact, 900 extra doctors in the province of Ontario. It would buy 3,144 first-year nurses in Ontario. It would employ 2,100 nurse practitioners throughout the province—6,000 cancer treatments at $30,000 each. In fact, that amount, when we’re talking about estimates, nearly equals the amount needed to operate the Ministry of Citizenship and Immigration, as well as the Ministry of Aboriginal Affairs. How can you justify this to Ontarians, wasting $180 million?
Hon. Christopher Bentley: Thanks very much for the question. I’ve been very upfront about the costs. I’ve outlined them yesterday. They are costs of fulfilling the commitment that we made yesterday that was echoed by your party and the NDP, and those are the costs of the relocation.
You said before in this committee that the Mississauga and Oakville sites were chosen because there was a demand for power in the GTA. What happened to that demand? Is there no longer a demand for power in the southwest GTA?
Hon. Christopher Bentley: I’ll answer the question, and there are at least two approaches. The demand question, overall, we’ve addressed earlier in conversations at this committee. We plan for the demand in the province of Ontario on a regular basis. The IESO and the Ontario Power Authority regularly plan to make sure that we meet the needs, brought on a number of different generators in the early years throughout the time—since 2003—to better meet the demand, to be less reliant on imports, or brownouts.
Obviously, it is always, no matter what you’re talking about, a factor to consider as to whether you have the ability to meet a demand located close to the load. That’s always an issue; something you take a look at.
Are we able to meet the demand in Mississauga, in this part of the GTA, on the basis of what we have available today and into the future? Yes. Are we determined to continue to do that? Absolutely, yes. Do we still require the plant? Yes, we do, and that’s why we’ve proposed to relocate it.
Hon. Christopher Bentley: No. We have transmission already available, as you know, from the Lambton generating site because it’s been used to generate electricity through coal for a long period of time. We are not generating as much coal-fired electricity from Lambton as your party did; more historically was used and therefore the transmission capacity that would otherwise have been used by coal is available for other purposes. That’s my understanding.
But be clear: We will continue to make investments in the transmission infrastructure throughout the province, which for many years had not received the investment it needed, to make sure that it is reliable and serves the needs of the people of the province of Ontario.
Mr. Ted Arnott: Just a moment ago, I wish to inform the minister, I received an email from one of my constituents who lives in Erin, and he says, “Hi Ted. If you like give this ... to the Premier. The power plant in Mississauga makes me want to throw up.” That’s the first email I’ve received on this issue.
Mr. Peter Tabuns: Thank you, Chair. Just to reiterate, Minister, I understand from your comments yesterday and recent comments that the reason for cancellation of the plant was that the public in the area rejected the plant. Is that correct?
At the time, last September—there are some reporters in the room who may well have been around for the announcements—there was a statement made that construction of condominium buildings and other factors had changed the air pollution impacts from these plants. Are we to assume now that that argument was of no consequence, that in fact it was an empty argument?
Hon. Christopher Bentley: No. That’s one of the factors, one of the changes that had happened since the time the plant was originally contracted that I suspect—I wasn’t on the ground at the time; I don’t know—gave rise to increasing community comment and consideration. The community expressed, as I understand it, itself in many different ways. There were many different comments and some of those mentioned the changed residential landscape in the area since the plant was originally contracted—not all of them, but some of them did.
Mr. Peter Tabuns: So what is the break point for this kind of decision? I went out to York region when those people were organizing against their plant, and they were hopping mad, I have to say. There was a big movement, strong opposition from across the community, and yet that plant went forward. What was qualitatively different in Mississauga?
Hon. Christopher Bentley: I think you raise an interesting issue, an interesting question, and you make reference to an interesting challenge. Every situation will have its own facts. You’ll remember the York issue started out as a transmission approach. The first—
There was a discussion initially about a transmission solution. The community spoke very loudly about the possibility of a transmission solution. It made its views very clear, so that solution was out. That leaves either not meeting the needs of the community or a generation solution. You’re left with no choice, so you have a generation solution. That really, in a very short way, is where you end up with respect to the York situation.
Hon. Christopher Bentley: You know, I can’t—what I can say is what was contained in the statement on 24 September and moving forward. I think every situation is going to be a continuum and have a large series of considerations.
There will be few energy projects that are conducted in the province of Ontario in which somebody doesn’t have an objection; I’m unaware of any in my tenure. Maybe there has been one in the history of the province which doesn’t have somebody objecting to something; either it’s creation or it’s non-location or it’s transmission. So it’s obviously a continuum of issues about how you meet the needs and what’s the best way to meet the needs and how you listen to, understand and respond to community comment.
Hon. Christopher Bentley: Well, I won’t speak to specific cabinet discussions. I don’t think I’m entitled to do that. What I’ve said all along is that there have been confidential discussions going on—there were confidential discussions going on; there aren’t at the moment—between the Ontario Power Authority on the one hand and Greenfield South Power on the other with respect to relocation and related matters, and that they reached a conclusion. That’s the report I made yesterday. That was the agreement that was reached Monday.
Hon. Christopher Bentley: The decision to contract was an Ontario Power Authority decision. The conclusion was an Ontario Power Authority decision. The Ontario Power Authority was at the table the whole time, and in the documents, you’ll see much of the history of this—the documents I think that are being prepared that are not solicitor-client privilege.
Hon. Christopher Bentley: I think I’ll leave that to the documents. The Ontario Power Authority has been at the table throughout. The Ontario Power Authority is making decisions about this, and the Ontario Power Authority reached the agreement with Greenfield South Power. It was, no question, a commitment of our party in September that it was our intention, if re-elected as the government, not to proceed with the construction of the plant and to work to relocate it. That was no question. That was our commitment in September. There’s no question about that. I think that’s very clear.
The Chair (Mr. Michael Prue): I’m going to stop you there because it is 12:30, and we have half an hour for lunch. Lunch is provided to all of the members of the committee and all of the people, I assume, who are in the room—
Mr. Peter Tabuns: Minister, just before we broke for lunch—the Liberal Party made a decision before the election, made a promise; the OPA had authorized the construction of this gas plant, had authorized the contract with Eastern Power. When did the OPA decide to cancel this contract or relocate this plant?
Hon. Christopher Bentley: We made the commitment during the election campaign. When we were re-elected, we worked to fulfill the commitment. The OPA made its decision to work to relocate the plant after the election was concluded, and the documents, I think, will outline the specific date.
Hon. Christopher Bentley: The OPA documents and their position will speak for themselves. We made a very clear commitment during the campaign, and when we were re-elected it was obviously our expectation that we would implement that commitment. The agreement the other day indicates that we fulfilled that commitment. So it won’t be surprising that after the election campaign that it was our intention, that I expressed publicly on a number of occasions, that we work to fulfill the commitment that we made. But, as I say, the documents will speak to the specific dates about the issue.
Mr. Peter Tabuns: So, in the end, the OPA approved the plant. The Liberal Party made a promise to cancel a plant that they’d previously supported, approved, as a government. They were elected, and they told the OPA, “You have to cancel construction here; you have to move it.” They were given a political decision to implement. They weren’t following their planning guidelines; they were just simply told, “We’re the government; we’ve made a commitment that we’re going to do this. Cancel this plan.”
Hon. Christopher Bentley: If elected, it was our intention to work toward the relocation of the Mississauga gas facility, which has been concluded. The OPA made the specific decision. They have been negotiating and discussing with Greenfield South Power for some period of time now—a very long period of time. The OPA has concluded the agreement, just on Monday, with Greenfield South Power—
Hon. Christopher Bentley: No, no. I said that after the election was concluded, it was our commitment during the campaign that, should we be re-elected as the government, we would work to relocate the Mississauga gas facility. It was our commitment not to pursue a gas-fired facility in Mississauga on that site. After we were re-elected, it was our stated intention—it was public a number of times—not to proceed with the Mississauga gas facility; to work to have it relocated. The OPA expressed their intentions to the proponent, the other party, Greenfield South Power. They worked very hard, the two of them, over the number of months since then to conclude the agreement.
Mr. Peter Tabuns: It’s now clear the OPA wasn’t acting autonomously. They had been given instructions initially to approve the plant and set up a contract. After the election, they were given instructions to wind things up on the Mississauga site. Can you tell us, because I assume that you have been intimately involved in this process: Were you told, as Minister of Energy, to tell the OPA to cancel this plant after the election?
Hon. Christopher Bentley: I’ll let the documents speak for themselves. It was absolutely our intention, should we be re-elected as the government, to proceed to implement the commitment that we’d made during the course of the election. It was absolutely our intention to do that.
Mr. Peter Tabuns: Minister, I’m not asking for any great secret. You were appointed Minister of Energy after the election. We agree on that fact. You talked to the OPA and said, “This plant can’t go ahead in this location.” Is that correct? Did you tell them that?
Hon. Christopher Bentley: There was correspondence going back and forth, and I outlined, in some of that correspondence, our government’s commitment during the campaign and our determination, because of the position of the residents of Mississauga and the surrounding area.
Hon. Christopher Bentley: It was a very clear commitment that our party had made during the campaign. It was clear that, during the campaign, we made the commitment. We ran on the commitment, and it was our determination to fulfill the commitment after the campaign. I was certainly anxious that we fulfill our commitment; absolutely.
Hon. Christopher Bentley: It’s pretty clear. We issued a press release as a party. There was a press event as a party. We ran on the issue as a party. The commitment was that, should we be re-elected, we would work to do certain things that we certainly work to do. I spoke in the House and outside the House about these matters many, many times. I just reported the other day that we’d fulfilled the commitment that we’d made during the election campaign. We’ve been clear, transparent and open about that from the very beginning. We fulfilled the commitment.
Hon. Christopher Bentley: It was a campaign commitment, like all campaign commitments. Some were contained in the platform; some were rolled out during the course of the campaign. This one was made during the course of the campaign. If you go back through the history of this last campaign, you’ll see that a number of parties made different commitments during the course of it that may or may not have been contained in their campaign document platform, including about this plant. That’s what we proceeded to implement. We ran on it. We were very clear about it.
Mr. Peter Tabuns: So why won’t you say who, in that election, made the decision to cancel this plant and incur penalties, unknown at that time, but which so far have been determined to be $180 million?
Hon. Christopher Bentley: I don’t think anybody can reasonably take the position that when you make a decision like this, it’s going to be easy or it’s going to be without challenge. I don’t think anybody could have said that.
Hon. Christopher Bentley: I don’t think I can add too much to what I’ve said. It was a campaign commitment that was out there in a press release. There was a press event. There were public statements about it. We ran on it and we proceeded to implement it. I had been the Minister of Energy. I had been working to implement that commitment. There is correspondence and there are documents. The OPA had signed the original agreement. The OPA has been at the table and they signed the subsequent agreement. But be clear: I’ve never said anything else. We made the commitment as a party that if we were re-elected as the government, we would implement the commitment. That’s what we’ve done.
Mr. Peter Tabuns: Minister, in the course of making this commitment to save these seats, did you ever contemplate that this should be an election expense for your party, $180 million? You made a very big promise—
Hon. Christopher Bentley: If you’ve concluded your question, all parties have made commitments in every election campaign. Your party made a number of campaign commitments, both before and during, and those campaign commitments outline your position that you’ll implement, should you become the government. That’s what our party did. The discussion as to how the costs will be allocated among Ontarians has not yet been taken up after the agreement was concluded. That there would be costs of relocation would have been clear to every single party that made the commitment—every single party: your party, the PCs and ours.
Hon. Christopher Bentley: I think you’ll see from the correspondence what transpired. It would have been apparent to everybody that we had made a commitment during the campaign and that it was our commitment to proceed with the commitment, should we be re-elected. That is something that we said to the people of Mississauga, Etobicoke and the surrounding area and the people of Ontario that we were going to do if we were re-elected. We ran on it. It was made before election day, so it was clear and it would have been clear to everybody.
Before I ask my question, I just want to share a couple of comments with you, Minister, and I’d like to have them put on the record. That’s why I’m doing that. I want to let you know that about two or three weeks ago—and I thank your office for this—I received a phone call asking me if I could represent you at an event outside of my riding because you weren’t available, and it was to do with jobs. I will go anywhere when there’s an opportunity that creates jobs. I had the pleasure of visiting Beamsville, which is not in my riding, and I had the pleasure of meeting a company that was spending $5 million opening a plant there which was going to employ 50 people to start with. The purpose of the plant was wind power and electronics.
I had the opportunity to meet with the CEO, who explained to me quite clearly, when I asked him the question, “Why would you be locating here in Ontario?” He said, “It’s pretty simple. Number one is the Green Energy Act. Number two is that the requirement in the act is that you have a certain percentage of the product produced here in Ontario. Thirdly,” he says, “this is a great location.” He said, “The Niagara region is a great location.” We know that the region of Niagara wants to become known as the wind power—economic development for Ontario. The region itself, with Gary Burroughs, who’s the chair, has been leading that charge.
About two weeks later, I received another call asking me if I would attend an event at a former plant that closed, called Hayes Dana. It was sad to see it close. I remember working there when I was a kid. It had been sitting there idle, and a company from China came in and was spending $15 million and had bought the entire plant and all the land associated with it. They were in the process of hiring 100 people to start with, and they were going to be producing wind turbines. They’ve been in the business for years. The mayor of Thorold was there and just ecstatic, saying, “This is the future. This is the new industry, and I’m proud that the government”—I’m quoting him—“went forward with the Green Energy Act. For the people of Thorold, this is just a great day.” The regional chair was there as well, and there were a number of economic development officers who were there from Niagara Falls, from Fort Erie, from Thorold. They were all there, saying, “This is a great day.”
When I had a chance to speak with Chris—he’s the CEO—I asked him the same thing. We were talking. I said, “Why did you choose here?” He said, “It’s the Green Energy Act. You’re making the right decision. Secondly, we have to locate in Ontario. That’s part of the condition.”
He explained to me that this was the first phase, and he expects that they will be hiring probably another 100 more and that they’ll be investing millions and millions of dollars more, in addition. He also explained to me that a lot of their product that they’re going to be producing is leaving Ontario. It’s not that it’s all being utilized here, but it’s leaving Ontario because they are distributors worldwide.
I tell you that because I had a chance—this is the highlight of both events—to actually meet people who had jobs. I remember talking to this lady—that was the one in Beamsville. She didn’t know who I was; we just started talking. She was saying to me, “This is a great day. My husband lost his job about six months ago, seven months ago. He was working in industry. He has a job, and this is a really good job, so we’re just so ecstatic that this is happening.”
Hayes Dana: I met a number of the people who had lost their jobs when the plant had closed. Some had gone back to Mohawk College. Some were at Niagara College, because they’re now offering training programs. Niagara College explained this to me. They’re saying that they realized this is a highly skilled job, whether it’s to do with solar power or wind power, and now it’s going to require certifications. So they’re now putting together a curriculum to offer training programs with the certificates.
Both of these companies said to me the same thing. They said, “The problem you’re going to have is that you’re not going to have enough workers.” They both said to me, “You’d better get yourself prepared by making sure your educational system is in place to get these workers trained, because we’re going to need them.”
Mr. Kim Craitor: The Niagara tunnel: I’ve had this question asked of me a number of times, and I know the answer, but I think it’s just important that we have it from yourself and we put it on record. It has been asked of me about the additional capacity, because I think it’s something like 160,000 more homes or 200,000 more homes because of this additional electricity. People are questioning me, “Can we utilize that electricity? Are there transmission lines in place? Can it be moved around? Because we know it doesn’t always stay in our community.” I’ve been reassuring them, “Yes.” I think I said that we’ve spent a lot of money putting in additional lines, but I thought it would be good coming right from your ministry, just to confirm that the electricity will be used and there’s a need for it and that it’ll be moved throughout Ontario.
Hon. Christopher Bentley: You’re absolutely right. First of all, thank you for sharing the jobs-related events that you went to. It’s good to hear first-hand what the experience of people in different communities is and has been, and it’s good to hear first-hand that what we hear at a very high level, actually, is having an effect on lives. It was nice to hear from the community member, through you, about that. Thanks for doing that.
Big Becky: What a fascinating project. You’re right; it’s going to provide electricity for at least 160,000 homes. In my early days, what I said to Tom Mitchell was, “How many extra megawatts is this project going to create in the Niagara complex, in the Beck complex?” Because every time we talk about a power generation facility, we’re talking about extra megawatts of capacity. He said, “None.” I was a little taken aback, and I said, “What do you mean?” He said that this project has had a capacity to generate electricity far beyond what the fuel will allow it to do—the fuel is the water. They haven’t been able, because of the limitations of the existing water transport structures, to utilize all the capacity that they have to generate electricity in the plant, just using the existing equipment. What I found fascinating is that even after this largest hard-rock tunnel in the world, they’ll be up to about 75% or 80% of their capacity. Depending on how much water is available, they can do even more.
But you’re absolutely right. Do we need the electricity? You bet. Hydro is clean, it’s cheap and it can ramp up and ramp down very quickly. I understand that when we had the blackout in 2003, it was the Beck facility that was really the hub. The people around Beck didn’t have any power outage; they still had power. That was the hub where the authorities at the time started getting electricity out to others, and kept it going for our different facilities to get them up and running. It really was a very impressive fact to know about the Beck facility.
Do we have a need for it? Absolutely. Do we have a need for power of this character and type? Absolutely. Do we have the wires to take it? Yes, we do. Yes, we have the wires. As you would expect, Hydro One, the IESO and the planners always look to see where, if we put in extra transmission capacity, we can have even more flexibility in the system. So it’s not always just about, “Can you take it out?” but, “How many different directions can you take it out in?” You’re always looking for opportunities to have not only the best system, the most reliable system, the most flexible system. We have the ability to take it out, we have the ability to get it around, and, yes, we want to use it.
Mr. Kim Craitor: The other thing I want to close with saying is thank you. I have been inundated—and I’m going to say the name HotWired, from Fort Erie. They’ve been calling me regularly. I’ve had so many companies coming in about: When are we going to make the announcement about the FIT program? When are we going to go forward with it? So, I’m pleased to hear that you’ve issued a directive, and that’s going forward. Allen, I said I’d wave to you, if you’re watching TV. The minister has made that directive, so it will be coming forward.
The other thing, Minister: I’ve got such a large number of people coming in that want to go with the wind power projects, particularly out in Niagara-on-the-Lake. They’re coming in and hoping that we’re going to go forward. The difficulty was—and I know you know this, but I just want to put it on the record—when the election was called—and I have a company in Fort Erie called DMI that produces the wind power turbines. It was the company that explained this to me; this is not me that’s telling you. They were saying that the challenge was that the orders stopped coming in because no one really knew what was going to happen with the election. There are no guarantees in our business, but we knew that one particular party was very strongly opposed to wind power; that’s their right to have that opposition. So the orders stopped, and everything slowed down. They’re hoping now that if we start moving forward and get the positive signs, those orders will start coming back in. So that’s one. It’s called DMI, in Fort Erie. I was out there the other day, and they’re feeling positive.
In fact, I should tell you that they were excited over the fact that this company has come in from China. I thought there would be a little bit of concern because they’re producing the same type of product. The general manager said, “No, this is a good thing, Kim. This is a good thing, to have competition. We have no problems with that at all, so we’re glad to see it.” So I just want to pass that on to you as well.
Hon. Christopher Bentley: Thanks very much. I’m pleased that the Ontario Power Authority was able to get the directive up on the website today. That is the directive that sets out the rules resulting from the green energy review that we did that concluded several months ago. We put the original draft directive up for discussion and review. There were lots of technical issues with those, I understand, and lots of people had the ability to comment even on the directive. Many, many thousands had the ability to comment originally, so it was great to get those comments to make sure that, as we proceed, we do it in the most effective way possible. I’m really looking forward to the applications. Thank you.
Mr. Reza Moridi: I’ll continue. Thank you, Mr. Chair, and thank you, Minister. Minister, since 2003, when our party came into office, we have made lots of investments in the area of transmission. We have built 5,000 kilometres and did the maintenance work and upgraded 5,000 kilometres of transmission lines across the province. Could you please tell us about the major investments we have made recently in the transmission lines?
Mr. Jon Norman: Hi. Thank you for the question. Since 2003, the government has invested more than $9 billion in the transmission system and the distribution systems. That, overall, represents an expanse of about 5,000 kilometres of wire if you put it in wire equivalents. Even in the past two years this investment has been accelerating as well because of the aging infrastructure on the system. Since 2011, Hydro One has invested nearly $1.5 billion in upgrades and expansions of the transmission and distribution system.
Major improvements since 2003 include the Bruce-to-Milton line, which was referred to earlier, which is the largest transmission project to be built in Ontario in the past 20 years. That was recently put in place and will connect over 3,000 megawatts of clean energy, and will also help facilitate the removal of coal-fired generation in the province.
Another major project since 2003 has been the reinforcement of power transfer capability between the northern Ontario system and the southern Ontario system, which is an important bottleneck in the Ontario system. This has allowed for many hundreds of megawatts of renewable energy projects as well as the expansion of the Lower Mattagami hydroelectric project in the north.
Finally, another major project has been the Ontario-Quebec interconnection. There’s a series of six interconnections between Ontario and Quebec, and there was a joint agreement between the province and Hydro Quebec to expand that transfer capability by 1,250 megawatts, which has allowed the system to have more flexibility, both in terms of dealing with times when power is needed and in times when Quebec needs power as well. It was done to the mutual benefit of both parties.
I would also point out that there’s a good deal of investment that has happened with regard to keeping the system at a level that can ensure the safety, reliability, quality and efficiency that Ontario customers are used to. Transmission reinforcement has occurred in Niagara, in London and in Kitchener, to the tune of approximately $400 million over that time period. In addition, because of aging transformer station infrastructure, 15% of Hydro One’s transformer stations have been upgraded as well over the past five years, which has amounted to an investment of $850 million.
Mr. Reza Moridi: Thank you very much. Speaking of the Bruce-to-Milton transmission line—just recently, I believe, the minister officially opened that line—could you elaborate on the impact of this line on the communities across the province, particularly around the power line, as well as the type of generation which this power is going to deliver from the source to the consumer or the consumption place?
Mr. Jon Norman: Yes, thank you. Bruce-to-Milton is a good example of the importance of transmission investment in the province. Very often, the discussion is around the supply side, the locations of that supply and where that source comes from. But of course, the wires are really the backbone of the electricity system.
The Bruce-to-Milton project, being the largest transmission project in over 20 years, has really allowed for the expansion of capacity from the Bruce area to the major load centres in the greater Toronto area. That has, in particular, allowed for up to 3,000 megawatts of new, renewable generation—that’s wind generation and solar generation—in a very promising region of Ontario for that type of investment.
In and of itself, the investment into the wires has resulted in 500 jobs at the peak construction period, and that’s not including indirect jobs that would come from the project and the amount of economic activity that comes from that. Perhaps more importantly, the project has allowed for those significant thousands of megawatts of renewable generation, which has also enabled a good deal of some of the manufacturing companies that have participated in the feed-in tariff program and allowed for that economic growth as well.
Just to give you an idea of the scope, the amount of generation that that equates to is enough to power about 1.5 million homes. It’s a very significant investment, both for the Ontario electricity system but also for the economy of that region.
Mr. Reza Moridi: Thank you very much. Ontario’s long-term energy plan, which was introduced a couple of years ago, calls for some new transmission line projects. Could you elaborate on those, please? What are those projects in terms of their geography, in terms of their generation-to-load locations?
Mr. Jon Norman: Sure. The long-term energy plan, because it’s an integrated plan, of course also recognizes that transmission is an important backbone of the electricity system and important for reliability over the long term. There is a specific transmission plan in the long-term energy plan that allows for the objectives of the plan to be met: for instance, achieving the target of 10,700 megawatts of renewable generation; for achieving the replacement of coal-fired generation; and, importantly, to ensure that reliable, adequate service is maintained to all Ontarians at all times.
There are five projects that are outlined in the plan. They’re spread between the north and south of Ontario. The first in the north is called the east-west tie. It is a link between the northwestern Ontario system and the rest of Ontario. It will increase that transfer capability by about 300 megawatts. It’s a $600-million project. It’s very, very critical to continued reliability in the northwest, and also to ensure that in times when there are significant amounts of hydroelectric generation, it can be brought to the rest of the province and vice versa: During time periods when there may be a drought, power can be brought into the northwest to ensure system reliability there as well.
Mr. Rob Leone: Minister, I would like to have some clarification between the relationship between the OPA and the ministry. Can you describe that? Is it at arm’s length from the ministry or does it simply respond to the direction that you set forth? Can you give us some explanation as to what that is?
Mr. Serge Imbrogno: I could try to answer that. The OPA is an agency of the ministry. It’s consolidated through the ministry. It has a board of directors. The minister can provide direction to the OPA on procurement. So that’s kind of the general overall structure, but the OPA board is charged with, once that direction is given, fulfilling that direction.
Mr. Rob Leone: Okay; that’s very helpful. The minister, in essence, can provide direction to the OPA and, in so doing, the ministry would have some involvement in some of the decisions that the OPA would make, which means that suggesting that the OPA made a decision to relocate the Mississauga gas plant may have in fact been a result of some direction from the ministry.
Hon. Christopher Bentley: You’re going to have the specific correspondence soon. Let’s be very clear: We campaigned on it; we said we’d do it if we got elected. It was my determination that I review the documents and see where we were, implement the campaign direction and implement the commitment that we’d made.
Mr. Rob Leone: So was the ministry directing the OPA, or had some sign-off authority on actually siting the plant where it did? Did the ministry have any way in providing its feedback on the actual siting of the plant? I’m not talking about the relocation; I’m talking about the siting.
Hon. Christopher Bentley: Let’s be very clear: The specific contract party was the Ontario Power Authority. I don’t think there would be much question that they were aware that we’d campaigned on it. I did a very extensive review of documentation, as I believe you’ll see in the documents, and outlined my review with the Ontario Power Authority, as I believe you’ll see in the documents. I don’t have it in front of me, so I don’t have the specific wording.
Mr. Rob Leone: The reason why I asked the question, Minister, is because I got some maybe inferences, if not stated words, when Mr. Tabuns was asking you some questions, that there was some sort of sidestepping, perhaps, maybe passing the buck, in terms of the decisions that were made, to the OPA. But if you’re in fact the minister responsible for the OPA, you are, in effect, responsible for the delegation and direction that you provide that ministry. If that is in fact the case, then your ministry and you, as minister, can be held personally responsible for the decisions that have been made, particularly with the siting of the plant. I’m not talking about the relocation; I’m talking about the first siting of the plant. Is that correct?
Mr. Rob Leone: Typically, as these sites are being discussed and debated, you’re providing input to the OPA in terms of what the government’s preference, perhaps, is on these sites, particularly with reference to where they’re located. Do you recall, as a minister—obviously in a different ministry—that the original siting was actually discussed around the cabinet table?
Hon. Christopher Bentley: First of all, I won’t comment on cabinet discussions. The OPA does have a very strong, independent planning authority, so I can’t speak for any minister-OPA discussions that occurred at the time of the original siting. I think I’ll just leave it at that. I’ll let the correspondence speak to the actions that I took and the way that they were phrased. I know you’re asking some specific questions, so I just want to make sure that I have the specific phrasing in front of you.
Mr. Rob Leone: With respect to the relocation of the site, assuming that the ministry provides input to the OPA, and some feedback or discussion or perhaps debate around the cabinet table did in fact occur—and you’re not at liberty to talk about those, so we’re going to have to assume that that simply happened. Why was cabinet not notified of this decision to relocate the site? As you’ve previously mentioned, you learned about the relocation of the site reading the newspaper. There was no conference call of cabinet; this was something that you learned, as a cabinet minister—in a different ministry, mind you, and I respect that—in the newspaper. Don’t you think this would be something that cabinet would throw around, would debate, particularly when it’s costing us $200 million?
Mr. Rob Leone: But it was a campaign commitment, Minister, that no one really knew about. This was an 11th-hour campaign commitment. You released your campaign platform before the campaign actually started, as I recall, just the weekend or a couple of weeks before the campaign. This seemed to be at the 11th hour—about 11 days before the actual election. This might have been a campaign decision, and I respect that the Liberal Party and people like Don Guy are calling the shots in this government, but this can’t really be construed as a long-term commitment if it just came out at the very last minute.
Hon. Christopher Bentley: My recollection during the campaign is that all three parties had a campaign platform document, and all three parties made additional campaign comments or commitments during the course of the campaign on different issues. On this particular issue, all three parties made a commitment with respect to whether or not the plant would proceed. We were very clear on the commitment that we ran on. Once the election was concluded and we became the government, it was obviously our intention, which was outlined a number of different times, to proceed to fulfill the commitment. There were several approaches to fulfilling the commitment. The negotiation/discussion approach is the one that we chose. The OPA had a very long, extensive, detailed—as I understand it—discussion on both sides, and that reached the agreement at the end of the day. They were at the table.
Hon. Christopher Bentley: As I said to you a number of times, or answered a number of different questions, pretty clearly, there was a press release—just like your party issued a press release, and just like the NDP had public comments about it; I don’t know if they issued a press release. We ran on the commitment—there might have been a press event the same day. My recollection is that there was. When we were elected, we proceeded to state our commitment to fulfill the commitment we’d made during the campaign—just like all parties had made commitments during the campaign.
Mr. Rob Leone: As a member of cabinet, and in the creation of party manifestos like platforms that you run on, are cabinet ministers typically consulted on what is actually included in those party manifestos?
Hon. Christopher Bentley: Gosh, you know, I’m sure every party has proceeded in pretty much the same way historically in coming up with its campaign documents. Lots of input from lots of places would be the general rule. Campaign commitments would have been made. What is very clear is that we made it openly, made it by press release, ran on it and proceeded to implement it.
Mr. Rob Leone: The Toronto Star claims that even press aides on the campaign press bus didn’t know about the fact that this was actually going to happen. This was, and very much seemed like, an 11th-hour decision to change course. I’m wondering if you could offer us any idea: Did Premier McGuinty actually authorize this decision at all, or did this simply happen from Don Guy and his folks?
Mr. Rob Leone: At what point, Minister, did you effectively become briefed on what has happened, what has transpired, in your ministry? What would that briefing have included? Would it have been simply a briefing that was prepared by the deputy minister and the ministry staff? Would you ever have encountered or had a conversation with the previous minister about some of the hot-button issues that are in your portfolio?
Hon. Christopher Bentley: Well, there were obviously briefings. There are briefings in every ministry that I’ve been in on materials prepared by the public service, and those briefings commence almost the minute that you’re appointed and leave the appointment ceremony. Obviously, there were briefings on this and many other issues.
The public service is not political, so the public service would not have participated in those, to my expectation—any press release that went out from the Liberal Party—just as they wouldn’t have participated in any that were made by your party or the NDP. That would be my expectation.
Mr. Rob Leone: Minister, I would suspect that it would be the case in your party, as it would be in ours, that at the very least the leader would have some knowledge of what would be committed to on a particular day. They would be well-briefed on those occurrences, and the rationale for making these particular decisions with respect to that would be clearly outlined and clearly tabled. Some references might be, in terms of the electoral impact of said decisions—I’m sure that calculus is part of the decision-making process in any party, in any government. I find it very remarkable that at every stage there seems to be a skirting of political and personal and ministerial responsibility with respect to this decision that’s costing taxpayers, or electricity ratepayers at the very least, $180 million. That’s a lot of money.
What I’m trying to assess here, Minister, is, who takes the fall for that decision? Is it you, as minister? Is it Don Guy, as the campaign chair? Is it the Premier himself? Is it some scapegoat that decided that it was a good idea to make sure that we save Liberal seats in terms of protecting your own? Perhaps it’s the campaign manager for the MPPs and the Liberal candidates surrounding the plant. Who takes the fall for a government’s decision to locate a site where it did, effectively costing taxpayers $180 million? That decision, mind you, was a decision made by the government. It wasn’t made by the opposition parties. It was simply made by the government itself. Who takes the fall for that?
Hon. Christopher Bentley: We were pretty clear in the commitment, that we made a commitment. You did join in, as did the NDP. We ran on it; I suspect without knowing that it was discussed a number of times during the balance of the campaign. When we were elected, we proceeded to fulfill the commitments that we had made. We’ve been very clear and open about that. It doesn’t get much more open than issuing a press release and then, as I recall, having a press event. That was out there for all to see and to make determinations on, and everyone would have known that, obviously, if you make a decision to relocate, there are going to be some costs.
Mr. Rob Leone: That’s understandable, Minister. But obviously, if another party did form government, there would have been responsibility. There would have been an indictment on the past decisions that your government would have made. Since you did actually form the government, a minority government, mind you, no one has taken political responsibility for the decisions that your government has made. When it has cost $180 million, does that number, in an era of austerity, not raise alarm bells for you in terms of what it could potentially buy: hospitals, schools, roads in different communities that perhaps need infrastructure and things like that? Doesn’t it bother you that there’s $180 million that has been lost as a result of your government’s decision to locate the site where it did?
Hon. Christopher Bentley: Everybody would rather there be no cost or low costs, including me. There were some very hard negotiations and discussions during the course of the last number of months. We have reached an agreement. The OPA and Greenfield South Power have reached an agreement to relocate the plant. Those are the costs of equipment and work done that can’t be reused. Every party that made that commitment would have known that there would be costs associated with the commitment. Depending on whether you relocated the plant or not, the costs would have been much higher.
Mr. Rob Leone: I know, Minister, that you keep coming back to the fact that we were part of that, but there’s one thing that sets us apart, I think, and that’s that the PCs—I don’t mean to speak for the NDP, but I’m sure they’ll agree with this statement—admit and we fully state and we don’t shy away from stating that this decision to locate the site where they did was in fact a mistake. Are you prepared today, Minister, to state clearly that the decision to locate the plant where your government did was in fact a mistake?
Hon. Christopher Bentley: I suspect the decision that was made at the time was the decision that was appropriate in the circumstances. It was pretty clear that the circumstances changed dramatically in terms of the community approach and position with respect to that. I’ve already been asked about some changes in the residential makeup of the surrounding area. That’s one aspect that probably fed in to and contributed to significant, building community concern about it. That’s why, in those changed circumstances, the decision was made, and that’s the position that we’ve taken. I suspect it was the same reason that your party indicated they wouldn’t proceed with it, but I don’t know; I can’t speak for it.
Mr. Rick Nicholls: Thank you very much. Earlier today, Minister, you provided us with a backgrounder identifying the costs of relocating the Mississauga gas plant. Again, you stated in there that the government was able to minimize the cost impacts by repurposing $85.5 million in equipment and work for use in the new facility. Had you not been able to do that, I would then assume that the cost was $180 million, plus that $85.5 million. That would be a correct assumption? Okay.
Here’s my question for you, sir: How much money did the government have invested in the Mississauga power plant before the decision was made to pull the plug? And I think I can hear taxpayer money going down the drain here.
Hon. Christopher Bentley: The way the power purchase agreement works is that there is an agreement on the part of the Ontario Power Authority to pay the other party a certain amount of money every month for a plant with capacity. The proponent is responsible for the building, so the proponent goes out and does the necessary approvals, gets the design, gets the engineering—you’ve seen that referred to in the document—contracts for the equipment—
Mr. Rick Nicholls: But how much money, Minister, was actually invested, whether it be on the contractor’s part or the government’s part? How much money was invested in that power plant prior to the plug being pulled?
Hon. Christopher Bentley: When the commitment is made and we campaign on the commitment, there are then a number of discussions with respect to the relocation and the negotiation. When you see the first basket of costs here, that $85 million represents the costs and the services that can’t be reused in the new plant. So there would have been labour that was contracted for, there would have been equipment that was paid but can’t be reused—“repurposed” I think is the phrase of the day—construction material and the like, things that might have been delivered after we got elected, but they had already been contracted for and paid for. So when you say how much had been spent, there would have been monies that had been contracted for or otherwise spent, or otherwise in the process of being used, up to the beginning of the fulfillment of the commitment. I think those are all the baskets there.
Mr. Peter Tabuns: Minister, possibly the deputy minister will have advice to you on this one: Eastern Power got a contract initially in 2005, and they couldn’t get financing until 2011. That was a long period of time, and yet they had a guaranteed power contract that was of some value. What kind of company with a guarantee to sell power can’t get financing in that period of time?
Mr. Serge Imbrogno: Mr. Tabuns, I don’t have specifics on Eastern Power. They would have received the winning bid in 2005 and then would have proceeded to get their approvals. So I don’t know whether between 2005 and 2011, there were issues with approvals that they were getting, or whether it was a combination of that and financing. I don’t have that breakdown for you.
Mr. Serge Imbrogno: I think there would have been basic financial tests that they would have had to have met. But then once they got the contract, it would be up to them to go out and get the financing. They don’t bring the financing when they come forward, but they would have to present an acceptable balance sheet.
Mr. Serge Imbrogno: They would be owned by Greenfield. But the value of those assets would have been taken into account in setting the net revenue requirement going forward. In other words, they would have been subtracted off as part of the negotiation of the net revenue requirement going forward, and that partly explains why the net revenue requirement dropped from $12,900 to $12,400.
Hon. Christopher Bentley: You’d asked an earlier question in an earlier round about payments that had been made and some of the payments that have been forwarded related to equipment that was contracted being delivered. In the course of the negotiation, as I understand it, payments that had been made for equipment that was going to be of benefit to Greenfield South Power was taken into consideration in lowering what the net revenue requirement would otherwise have been, just as they might, I assume, have brought to the table things like inflation and increased cost of construction in trying to raise it.
Hon. Christopher Bentley: I’ll let the documents speak for themselves in their legal terms, but generally, the approach was that the Ontario Power Authority would enter into discussions with Greenfield South Power about relocating the facility. It was always our intention to not have a gas plant proceed on the Mississauga site, but have a gas plant at another place. It wasn’t a “We’re ripping up the contract. We don’t want to see you anymore”; it was a “We don’t want it here. Can we find another place?” That is a different construct of a discussion and negotiation. That’s really what was happening.
Mr. Peter Tabuns: Again, I’m going to go back—the OPA apparently sent a letter to Greenfield. This is the court transcript from New York. On November 14, Eastern Power gets a letter from the OPA saying, “We’re not going to purchase power from you under a power purchase agreement for the next 20 years.” The conversations start from there. Why is it that you continued—why did the OPA, why did the government of Ontario continue—giving money to Eastern Power after they had sent that letter? Why was it our problem?
Hon. Christopher Bentley: Well, there was—I’m not going to speak as a lawyer on the issue. I’ll just speak on my understanding of the issue. There was a power purchase agreement with Ontario Power Authority and Greenfield South Power.
Hon. Christopher Bentley: I won’t speak to that document because that’s not my document, but the hope was and the expectation was that, although the issue is challenging, discussions could be had with Greenfield South Power not about ripping up the contract, going to court, having a fight and figuring out all the damages, but how to take the proposed plant from Mississauga and find an acceptable resolution to move it somewhere else so that we benefited from the power, we benefited from the facility and attempted to work hard to minimize the relocation impacts.
Hon. Christopher Bentley: It was part of the determination, I suspect, to make sure that the commitments that have otherwise been made, the commitments that were site-specific, could be met and that discussions could continue in good faith on both sides—all of which has been taken into consideration either in the specific costs or in the price of the new power purchase agreement.
Hon. Christopher Bentley: I don’t know about a “When did you decide on Sarnia?” I don’t know if I can specifically ask and answer that question. The agreement was concluded on Monday between the parties. I think it would be fair to say that very early on in discussions about this, my thought was that Sarnia would be a site, the Lambton facility would be a site—my personal thought.
Hon. Christopher Bentley: I don’t know exactly the conversation; I wasn’t at the table. Obviously at some point, the Lambton site was voted as a possibility and the agreement was concluded on that basis. I know that they would have reached the agreement because they both determined, from their good analysis of the situation, that that was the appropriate site, not on the basis of any thought I might have had personally or uttered in a different scenario otherwise. I don’t purport to be the expert on siting gas plant facilities. There are others who do that. They obviously decided that this was an appropriate place and I don’t disagree with that decision.
Hon. Christopher Bentley: It seemed like a good fit. They’re both good sites. They both have coal generating stations on them. We’re getting out of coal in both places. I think the Nanticoke site is a good one as well, but the Sarnia one is the one that was agreed upon, and I think that’s good.
Mr. Peter Tabuns: I’m going to go back. When Eastern Power was told that the OPA was no longer going to buy power from them, the complaint in court by EIG, the financier, was that Eastern Power didn’t complain, didn’t make any legal filings over it. They just rolled over. Why was that? What was the relationship between Eastern Power and this government that allowed the government to say, “I’m cancelling a 20-year contract with you. I’m not buying power from you. You’re about to be put on a very risky venture into uncharted territory as to whether or not we can find a site for your plant”?
Hon. Christopher Bentley: You’ve probably heard me say, wearing a number of different hats on a number of different occasions, that I tend not to comment on the minute-by-minute flurry of remarks either in court, orally or through documents or submissions. Lots of things are said. I wasn’t there at the time and I’m not either of the parties, so I’ll let them speak to that.
I don’t accept your characterization. I think the facts would reveal, and the facts do ultimately reveal, in the agreement, that Greenfield South Power worked very hard to reach an agreement and stood up for their interests and their owners. It was not an easy agreement to reach. These discussions went on, you’ve heard me say, for a long period of time. We’re in July now. I don’t know if I made my first comment in October, but I suspect I did, within a day or so of being—in fact, my recollection is that there were certain press comments the day I was being sworn in. That’s my recollection. I’ve been commenting somewhat continuously since then, not in as much detail as I was able to yesterday, about this. So, I have long since resisted the temptation to speculate on why people say different things in court or through their documents. What’s important for me is that that’s concluded—that’s done. The EIG part is done, by agreement, and the lawsuits there and here and with them, all of the comment and allegations have been withdrawn because allegations are not facts. The whole point of court, of course, as we all know, is for the trier of fact and law to determine what the facts really are, not for everybody to speculate. So, that determination was never made because those never went to trial. They were all withdrawn and concluded by settlement. So, it’s the settlement—and I’ve revealed the settlement, the $88 million—which settles those out.
Mr. Serge Imbrogno: —the OEFC—board of directors. So, Eastern Power has two prior non-utility generator contracts that were signed with the old Ontario Hydro that were transferred to the OEFC or remain with the OEFC as the continuation of the old Ontario Hydro. I think those are still in place. There are two biomass ones, Keele Valley and—I’m sorry, I forget the other one, but they’re fairly small NUG facilities that are mainly biomass.
Mr. Serge Imbrogno: I’m just aware of those assets in terms of when you asked about any contracts with Ontario government agencies. I’m not aware if they have any other assets contracted with anyone else or outside Ontario.
Mr. Peter Tabuns: Okay. One of the things that came up in your comments, Minister, in November of last year, was problems with siting. You said, “Clearly, we have difficulty here with siting.” Can you tell us what you’ve done since then to review siting criteria and the changes that you’re proposing?
Hon. Christopher Bentley: Thank you for that. You asked me a little bit about this, I think, a couple of sessions ago. We indicated, as you said, that there had been some challenges on siting. We indicated that we were going to take a jurisdictional scan to see if somebody had a better approach. We can speak about it in more detail. I think it would be fair to say that there isn’t a universal rule that constitutes a better approach. An approach that has been taken either in one jurisdiction that works but doesn’t work in another jurisdiction; one that involve hearings in one that work but don’t work in another jurisdiction. Sometimes within the same jurisdiction, they don’t work. It’s just one of the challenges about siting power generation facilities. You have similar issues with respect to transmission, of course. The jurisdictional review has not resulted in a pattern that one can follow.
If you ask me why I’m attracted, in part, to a place where they’ve generated electricity for decades from a coal facility, that’s close to transmission, close to a gas line, in a region that has long been known as an energy hub with Refinery Row, maybe one good reason is that it’s challenging elsewhere. But we’re still looking.
Mr. Peter Tabuns: You told us earlier today that you’re constantly reviewing transmission issues, grid issues. Can you tell us the investments that are going to be made in the southwest of the GTA over the next five years in transmission capacity?
Hon. Christopher Bentley: The IESO and the OPA are constantly reviewing, yes. You got an answer to the previous question from Jon Norman on the long-term energy proposals, the different major investments. That’s in the plan. The one that’s going ahead is not in the southwest. We just finished and opened up the Bruce-to-Milton line. I’d count that as part of the southwest.
Hon. Christopher Bentley: Oh, okay. Sorry; I just heard “the southwest.” I’ll go back and find out if there’s a specific breakdown. Hydro One is always looking at upgrading and renewing its facility. Toronto Hydro and the other utilities within the southwest GTA would all be constantly looking at how to upgrade their own facilities. What specific investments they all have, I’m not aware of.
Mr. Peter Tabuns: I’m interested in Hydro One investments in the southwest GTA that you have proposed for the next five and 10 years. Similarly, if you could tell us what the power demand growth or reduction has been in the southwest GTA over the last five years and what it’s projected to be for the next five.
Mrs. Donna H. Cansfield: Thank you very much. Actually, it’s a little bit, Minister, in the same vein. I was interested yesterday in your announcement that, in fact, you were switching us over to the Lambton area. My first question is: When was the plant in Lambton slated to close?
Hon. Christopher Bentley: Thank you. As you know, as we’ve been very clear since the spring of 2003, we’re getting out of coal. There’s a lot of very hard work in not just getting out of coal but having other forms of generation to pick up the slack, other forms of generation with different properties. We have said that we are getting out of coal and closing the facilities by the end of 2014—that’s the Lambton generating station, by the end of 2014. Several of the units have been closed completely already. Most of the units that remain don’t run most of the time but are there for emergency use, if required. But they’ll all be closed by the end of 2014, no later.
Mrs. Donna H. Cansfield: So that’s probably about half the capacity there was. I think it was about 1,900 originally, so you’re probably at 1,000 or so. That doesn’t mean you use it, that just means it’s there. That’s really important.
Mrs. Donna H. Cansfield: For me, one of the reasons around the reduction in the coal and the phasing out of coal and to look to cleaner sources—and certainly natural gas is a cleaner source—is the issue of the pollutants and what’s emitted even still at Lambton. As I recall, Lambton was probably the second-dirtiest plant, next to Nanticoke, because of the kind of coal they used. They were high in NOx and SOx, which are the nitrous and the sulphur, and probably a significant number of other contaminants.
Hon. Christopher Bentley: That’s a great question. You want to make sure you can make the progress that needs to be made with respect to the environmental issues, with respect to the health issues, as well as having the appropriate supply online. When we made the commitment to get out of coal, it was a very important decision at the time because, as I’ve said before, coal had already grown to be about a quarter of our power use. This was in 2003, when we didn’t have enough. Using all of our facilities, as much as they could be used, there wasn’t enough power in 2001, 2002 and 2003, particularly in 2002 and 2003, to meet the needs of the province of Ontario. There were a number of brownouts. For years after, Ministers of Energy, I know, would have been sitting on the edge of their seats whenever anybody even hinted that we had a really hot, muggy day, because we didn’t know if we had enough.
It’s great to talk about importing power. The problem with talking about importing power is that the jurisdictions we’d most likely import from tend to have much the same weather that we have at a particular time. So if it’s really, really hot in the province of Ontario, as it has been the last four weeks, well, guess what? It’s really, really hot in Michigan, Ohio, Pennsylvania and New York as well. There isn’t the ability, then, to import. And the tie that we had with Quebec at the time, 2002, 2003, was not as much as we would have liked it to be to draw in lots of power. They sell to the States as well.
So we made this commitment—great environmental benefits, huge health benefits. It was estimated that we were spending about $4 billion a year through the health and other taxpayer pockets for health care and environmental effects of burning coal. That doesn’t make any sense, because there’s no gain on that. In fact, there were thousands of people who were suffering and deaths that were attributed to the dirty air that burning coal produces, so we decided to get out of that. We’ve had to do it, and we’re doing it in a very systematic, measured way so that we still have the power that we need throughout the province of Ontario to meet the needs, whether it’s Sarnia–Lambton, London, Mississauga, Halton, Oakville, GTA or elsewhere, and we’ve been able to do that.
So as you close down, you’re building elsewhere, making sure you’ve got the transmission to take it to where it’s actually needed. That work has been very successful—very hard work by men and women throughout the facilities in Ontario, very hard work by Ontario families and businesses to do this, because it’s not easy.
So then, as you try to locate power generating facilities, you quickly discover that although everybody wants the power and expects it will be there and expects it will be reliable, there is not the same degree of enthusiasm for having power facilities in all parts of the province where it might be most desirable to have them, and then certainly not necessarily the same degree of enthusiasm for transmission of the power. It’s just one of the challenges that we have.
As we look to locate facilities, we look at a number of factors—the OPA and the IESO do. Obviously, in this particular case, as we were looking to locate a gas facility, having it on a site that has historically been used for the generation of electricity does make some sense. They have the skilled workers. They happen to have lots of construction trades, of course, there. It happens to be a site that’s used to having generating facilities—coal-burning facilities for a long period of time; this is a much cleaner approach. It is very close to transmission facilities, so there is transmission to take the power. And it is, I understand, relatively close to a gas line. That’s important if you’re having a gas-fired facility.
So it just seemed to be a very good fit and one, obviously, that the parties in this particular case thought was a good fit because they were able to reach an agreement in this very challenging circumstance to put the plant there.
Mrs. Donna H. Cansfield: Thank you. I know the Ontario Clean Air Alliance has stated that it’s about a 60-some-odd per cent reduction in air pollutants by switching to natural gas. Certainly a number of those pollutants that come as a result of burning coal are the same ones that impact respiratory disease, pulmonary disease. I remember my predecessor, Chris Stockwell, who said you can’t close down the coal-fired plants because people would be without electricity. “It’s that simple,” he said. That’s not true. We’ve proven that.
Actually, that takes me on to my next question I wanted to ask you about, and that is the task force: the composition of the task force, the expectations of the task force. If you could give us some information about that, I’d be pleased.
Hon. Christopher Bentley: The Clean Energy Task Force—and just before I do, the deputy has got some really good figures with respect to the environmental benefits of getting out of coal. Maybe I’ll just let the deputy—
As you know, we’re on track to meeting the coal phase-out by 2014. Overall it’s equivalent, in terms of climate change, as well, with CO2, to removing seven million vehicles from the road by the end of 2014.
Hon. Christopher Bentley: The Clean Energy Task Force: We’ve had our first meeting, co-chaired by—actually chaired by Annette Verschuren, but Minister Duguid and I are both there. We’ve asked a number of very capable individuals to participate: Lisa DeMarco, who is one of Canada’s leading climate change and energy law experts; Tim Weis, director of renewable energy efficiency policy; James Murphy, director of business development for Invenergy Canada; Carmine Marcello, executive vice-president of strategy for Hydro One—just to name a few. We’ve got about 15 people who have volunteered to come and join.
What are they going to be doing? Well, here are some of the questions that we’ve really asked them to take a look at and provide us with their strategic sense and advice. How can we identify and eliminate barriers to the implementation of new clean energy technologies by innovative Ontario companies? There are lots of good things going along. We hear from time to time about barriers. They’ve got good on-the-ground experience. So what can we do?
What are the best export opportunities for our technologies and expertise that we develop here? We don’t want to get rid of the expertise; we want to use it, create jobs here and generate wealth here by selling to the world. So what are the export opportunities? It’s good to have a group of individuals who have breadth not just in the issue, but have a breadth of knowledge about different jurisdictions. We may have something that we’re very good at here that is being used around the world, but the need for that is being met locally. Focusing on that as an export opportunity really is not going to get us very far. On the other hand, we may have expertise in a particular technology or approach that isn’t in great supply elsewhere, or if it is in great supply, we’re either better or more cost-effective or both at it, and we can identify that as an export opportunity. Where’s our real leadership position that we can use? They’re going to give us some good strategic advice on that.
How can we attract investment and maximize the benefit of our position as a global leader in the advancement of smart-grid technologies? Our colleagues were asking earlier about the smart grid. Everybody’s talking about it now. Particularly in the States, you hear a lot of discussion now as a result of adverse weather effects and some of the challenges they’ve had. Huge investment is required—huge. How can you attract the investment? How can you make sure that you’re going to get real-time, tangible benefits for that investment so that families and businesses are better off by the investment beginning immediately?
How can we advance our economic opportunities and benefits associated with our renewable energy right here? What’s the best way to market our clean energy expertise? Is it trade shows? Is it advertising? Is it piggybacking with somebody else? Is it identifying the businesses that are leaders? They’re going to give us good strategic advice. I’m very thankful to all of the members for participating. It’s already started out well.
I wanted to also ask you a couple of questions about—we had some discussion around the transmission and the importance of the renewing of the transmission. My question was just how we’re working with the local distribution companies on their local distribution.
Hon. Christopher Bentley: You know what? Can I just echo something that I said a couple of hours ago? We’ve had some very challenging weather the last four weeks. Lots of us love hot weather in the late spring and the summer—lots of beach and cottage and other resort opportunities. Gosh, the power demands when the hot, muggy weather arrives are huge. They really tax the system. They tax us in terms of meeting the maximum demand, air conditioning in particular. They tax the technology. You probably heard the comments about some rail and road technology; it gets superheated. You’ve got to take extra precautions. That’s just natural.
The same happens with electricity technology: transformers, grids. So it is important to make sure that you do whatever you can so that you’re ready for the worst—you’re planning all year, having things sit all year so you’re ready for the worst—so that you can meet the demand and you can meet it effectively in the weather conditions.
I just want to thank the local distribution companies that we have in the province of Ontario, just under 80 of them, for the hard work that the men and women do, whether they’re out on the road, whether they’re dealing with the lines, the transformers, answering customer issues or in the planning or in the control rooms, because, gosh, they really did a great job throughout the province of Ontario. We’re never out front of events, but if you take a look at how we’ve done the last four weeks, the great work that they’ve done, with the experience elsewhere, we’re very fortunate for the hard work that the men and women have done—very reflective of the strong planning and investments that have been made at the local level and at the provincial level. It has been a good approach, but you can’t rest, because there’s always a challenge.
You heard about the equivalent of 5,000 kilometres of wire: $9 billion worth of investment. Obviously, that’s reflected in the bill, but you have to do it. Otherwise, the wire that you have with the transformers can’t take the energy that you need from a Niagara Falls and get it out to homes throughout the province of Ontario. You just have to make this. Anybody who has a home or a car knows that. You can ignore things, but if you ignore, your car is breaking down on the highway or the water is coming through the roof, and then it’s too late to be making those wise investments.
They’ve been making these investments. They’re going to keep making the traditional investments. Hydro One tells me that they have many, many thousands of poles that are decades old and need to be replaced, with the additional challenge that we have the beginnings of this technology to put in the smart meters, and now we have this other digital and related technology that allows us to manage a system in a way that we never have been able to before. The benefit of wise investments there through a smart grid are seen to be huge. The challenge is what to invest, when to invest and how to make sure that you’re getting the benefit from the investment in real time so that families and businesses are making the investment, but they’re also seeing the benefit right away.
That’s the great opportunity and challenge we have with the technology right now. It’s a very exciting time, as investment in this area used to be all about poles and wires and transformers, I understand, and now it’s at least as much, if not more, about the digital opportunities, the computer-based opportunities, the smart meters, smart technologies and where to invest money in that so that it can take the stress off your poles and wires and make the whole system run infinitely more efficiently than it ever has before.
I’ve seen lots of great examples throughout the province of Ontario already. Hydro One has been a leader; a number of our local distribution companies really have taken a great leadership position. They’re actually helping some of the other LDCs in the work that they’ve done—a very exciting opportunity. My view has always been that it’s great to invest; I want to see the benefit in real time, because families and businesses want to see that benefit in real time as well. So how do we match up the benefit with the investment as much as possible?
Mr. Rob Leone: Okay. That way, I will ask some more questions, Minister, about this gas plant issue that has certainly been the talk of the committee today in estimates. I’m wondering, Minister, if you could tell us who in fact wrote that press release that changed the location of the Mississauga gas plant. Do you have an idea who would have written that?
Hon. Christopher Bentley: I appreciate the questions. I think I’ve told you all that I possibly can with respect to that. We issued the press release; as a party, we campaigned on it—the same type of commitment your party made and the NDP made. We were elected, and we proceeded to fulfil the commitment.
Mr. Rob Leone: The issue, Minister, is that we’re now out $180 million because of the relocation—also because of the delay. In fact, after the decision was made in a press release, the construction of the plant continued, costing tens of millions of dollars, hundreds of millions of dollars of taxpayer money. We are in an era of austerity, as we like to say often in all parties. We have to show some restraint, and that $180 million is a lot of money. It’s a lot of money that could go to build the cancelled hospital expansions that you have on page 40 of your budget. Doesn’t that bother you, Minister?
Any amount of money is a big amount of money for me. Any opportunity to minimize the relocation cost was taken, and it is a positive development that they were able to reach an agreement on the relocation of the facility so that it continued. I’m pleased that they were able to reach that agreement and, as I say, any amount of money, for me, is a large amount of money.
Mr. Michael Harris: Minister, since yesterday’s announcement, I’ve been inundated with emails and phone calls from my constituents just flabbergasted at the cost of this careless, reckless decision. In fact, locally, one of the greater KW chambers of commerce’s concerns was the long-awaited Highway 7 expansion between Kitchener and Guelph. The $180 million would have got us halfway there already to build this ever-so-needed highway.
A couple of other stats I found interesting that some constituents have relayed on: Were you aware or are you aware that we could hire, in fact, 3,500 teachers for one year with $180 million that we’ve just recently wasted, or your government, has wasted? A student’s average tuition is $6,600 for post-secondary—
Mr. Michael Harris: The entire population of the University of Waterloo could have gone to school for a year with that $180 million. When you’re in London, what do you tell people in your constituency? How do you justify, again, wasting either ratepayers’ or taxpayers’ money to the tune of $180 million? What do you say?
Hon. Christopher Bentley: There’s no question that every effort was made to minimize the relocation costs. Every party knew, or would have known—including yours—when the press release was issued and when your subsequent press release was issued, that there would be costs to the relocation or the cancelling, which is the term that you used, and every effort has been made. Any amount of money is a lot of money for me. I find that the examples that you’ve been using are interesting, because you are not noted for making investments in education. You are noted for raising tuition, not lowering it. But that’s beside the point. The point is that everybody has worked very hard to minimize the relocation costs, the same effort that you would have been involved in had you had the opportunity to either cancel the contract or work with the party to relocate the plant.
Mr. Rob Leone: Minister, once again, you keep trying to put the blame on us, but you were the government that actually sited the plant where you did, so you are, in fact, responsible for $180 million going to things that have no relation to any of the investments that my colleague Mr. Harris has outlined. I have to note, since you tried to suggest that we are a party that does or doesn’t make certain investments, you’re the party noted to waste money when it comes to energy—billions of dollars, in fact, in energy contracts, whether it’s this gas plant or green energy or others. That’s your party’s legacy. It’s your party’s swan song, perhaps, when it’s all over, that you have given Ontarians a massive deficit, doubling the debt; and these energy experiments that are ending up costing us billions upon billions of dollars, that’s your party’s legacy. So you can’t put that on us, Minister, effectively what your government has to decided to do and impose upon us.
This is interesting, because roughly 27,000 people, which is roughly the population of the University of Waterloo; it’s very similar to what the population of the University of Western Ontario—in effect, all the students there could have gotten free tuition, a free education, as well, for a year, in terms of going there.
Don’t your constituents raise these concerns with you when you’re out and about? Are you knocking on doors, are you listening to people who are coming to you with their hydro bills to try and outline these global adjustment charges that are excessive? What do you say to them? What do you say to them in terms of all of the money that you’ve effectively spent on energy that you’re not spending on core social services?
Hon. Christopher Bentley: We’ve been working very hard as a government to address the fiscal issues. I would have appreciated some support on some of the initiatives that we advanced during the course of the budget process from your party. Unfortunately, that was not to be forthcoming. You had a number of different investment opportunities.
Look, I know you’re not particularly happy when I say it, but all three parties made a commitment not to proceed with the gas plant. The words your party used were that you would cancel the plant; whether that means move it or whether that just means rip up the contract, I don’t know. But every party would have known or should have known that there would have been costs to the decision that they committed to make. We made one. It was a clear commitment. We ran on it. We were judged on it and we proceeded to implement it.
Mr. Rob Leone: Our party also stated, Minister, that someone should be held responsible for this. Certainly, you don’t repeat those words very often right back to us. You conveniently just stick to the fact that we all agreed to cancel it. You’ve never taken responsibility for actually putting it there. You have never agreed with us that we want to find out who is responsible for this particular decision.
I don’t know why, Minister, you wouldn’t—if you had a name perhaps, why won’t you share that? Because it certainly would take the spotlight off you, in terms of you being responsible for these decisions. So why won’t you offer us a name? Is it because it’s you?
Hon. Christopher Bentley: It was pretty clear that we issued a press release. I believe that we did a media event—not sure, wasn’t there. But we all ran on our commitments as a party. The voters made a judgment. We proceeded to implement those commitments.
Mr. Rob Leone: In terms of the effect that you are simply not going to take responsibility for this decision, that you’re not even going to call it a mistake—certainly the member for Mississauga South, the Minister of Citizenship and Immigration, called the idea “dumb.” But the government is not similarly going to be making that sort of statement. Don’t you see a problem with that in terms of what Ontarians may well see as being, perhaps—maybe it’s being oblivious to the fact of what’s going on in the Ministry of Energy or, perhaps, incompetence. Don’t you think people are going to ask legitimate questions with respect to why no heads are rolling with respect to the moving of this plant from Mississauga to Lambton?
Hon. Christopher Bentley: Well, as I say, we were very clear and transparent with the commitment that we made. It is clear from this and a number of other issues that locating the generation facilities that we have in the province of Ontario has been a challenge. We all want the power; we all expect the power to be there; we expect it to be reliable and plentiful. Locating generating facilities of any type or locating the wires to take the electricity from anywhere seems to be something that attracts a fair degree of comment. That’s one of the challenges that we have. I’ve indicated that we are looking at a better approach to siting facilities.
I also indicated, in answer to some questions posed by my colleague from the NDP, that I haven’t yet come up with a magic solution. There seem to be comments about any generation facility of any sort that’s located anywhere. It will continue to be our work to work hard to make sure that we can meet the needs of the province of Ontario in terms of energy, which we’re doing. This particular one is going to a site that your leader has otherwise indicated is a site that we should be looking at, so they’ve agreed to go there. That is—
Mr. Rob Leone: I don’t, actually. I don’t have it, but I’m assuming that if it was a siting of a gas plant, we would try to find the most cost-effective way possible to actually place a plant, which doesn’t seem to be the case here.
Earlier in my line of questioning, we talked about how retrofitting Lambton would have been a more cost-effective way of putting gas down in that location. Now you’re building a new plant for whatever reason, we still don’t know. I’m assuming it’s because you’ve concocted some deal with the group that’s moving down there. So you’re trying to, I don’t know, instill blame or show that we’re all with you, Minister—I don’t know what you’re trying to attempt to do here.
The reality of it is that you’re the government. You made a decision to locate the plant in Mississauga. You decided to relocate that and come to an agreement with the parties that are at the table. That’s costing taxpayers a $180-million fee that has not been accounted for in the estimates or in the budget. That is essentially the story that emerges from this. You made a decision, you relocated it, it’s costing money that we don’t have, and you seem to be flippant about the fact that this is actually happening.
This is under your watch, Minister. You would, I would think, want to have some reasonable answers to some of the concerns that are not just being made by myself and my colleagues here, but are concerns that are going right across the province of Ontario, concerns that are coming to your email box as well as mine. People have legitimate questions and concerns. They want to see somebody held responsible for this decision, and nobody is stepping up to the plate. When we ask those questions, your response is either “I wasn’t there” or “I simply don’t know.”
Hon. Christopher Bentley: I just reject your comments completely. That has not been my approach in this at all. I’ve been clear, open and direct about what we committed to do, what we’ve done and the costs. All of that’s out there.
I’m just referring to a number of comments that your leader has made that we should be taking a look at willing communities like Nanticoke and Lambton, which already have transmission lines and a workforce at power production facilities.
A number of the comments by either your leader or other members have referred to the retrofit, but they have also been more general comments following on the decisions taken with respect to Oakville and Mississauga. I’ve taken from those comments, unless you have something to the contrary, that they’ve wanted us to take a look at these sites in terms of not only retrofitting the existing facility, but also new build. That’s what was done as a result of the agreement. It’s not an agreement that was concocted in any way, shape or form; it was an agreement that was reached between the OPA and Greenfield South Power after many months of very hard negotiation that actually does move the plant. Another approach could have been to rip up the contract and go to court, but this was one of working with the proponent to move it and to try to minimize the relocation costs.
Mr. Rick Nicholls: Minister, we’ve talked about the Mississauga power plant a bit today, but this debacle is not the only lawsuit the Ontario Power Authority is involved in. In April, the OPA was the target of a $1.2-billion lawsuit for cancelling the offshore wind farms in Lake Erie. It is even reported in the Winnipeg Free Press. So your government’s legal troubles are fairly well known across the country by now. By simple math, that’s nearly $1.4 billion in lawsuits against one of the government’s chief energy agencies. How have these lawsuits affected the OPA’s ability to conduct its business?
Hon. Christopher Bentley: Thank you for the question. The proposed offshore wind facility that you refer to is not one that actually had a contract, to my understanding, between the party that is making the allegations in court—allegations made through court documents are not proven; they’re allegations. As I said, my understanding is that there was no contract there. There was no contract.
Governments make decisions, and governments get challenged from time to time on those decisions. It is a fact of life. It has been a fact of life of every government. The resolution of those decisions, whether it’s in court or otherwise, is there for all to see.
Hon. Christopher Bentley: I don’t know how the last one you’re referring to could have been avoided, because I’m unaware of there being any contract. I can’t speak for those who exercise their right within our society to go to the courts and ask for redress—whether there is merit or not to their claim. That is just the nature of the legal process and the legal opportunity, and the basis of our democracy.
I’m not sure if you’re aware, but this year, the province will spend about $199 million on water and environment infrastructure to protect Ontarians, obviously, and increase the viability of their drinking water. Your government has wasted $180 million to relocate a power plant that took the equivalent of what the province is spending on protecting our water and environmental infrastructure. As well, your colleague the Minister of Labour’s entire operating budget for the Ministry of Labour is around the same amount, $188 million—to the same tune as the $180 million that has been wasted to relocate this power plant.
I just think the magnitude is phenomenal in terms of the financials. You could have diverted that money to health, education or our valuable social programs. Today, we hear concerns of different fee cuts with our doctors, picking fights with teachers, and we turn around and throw money into a big hole, basically—$180 million. I just want to make you aware of some of those interesting numbers.
Hon. Christopher Bentley: It’s a good question. It’s an open question. There has been a consideration of just closing it, and that’s it; there has been a consideration of closing it and converting it either to gas or to gas and biomass—a number of different proposals. There have been many thoughts and proposals out there by many different people, and those are still being looked at.
As I think I said earlier, that would be a plant, as I understand, of a different type than the plant that’s being located there. That’s a single-cycle plant, so it’s used for ramping up and ramping down very quickly. It’s not used as much, although it can be, for longer-term generation, because it’s not as efficient.
Mr. Peter Tabuns: So the expectation, then, is that the Lambton coal plant is going to stop burning coal, but you are currently considering other options for producing power from that site. Is that correct?
Hon. Christopher Bentley: No, but we’ve been asked by local elected officials, by others, to take a look at the opportunities that might exist for that. We have been, but we’ve not made a decision. Obviously, the IESO and the OPA, as you know, are constantly planning and taking a look and trying to judge whether we need additional power, and if so, what type, and if so, where.
Mr. Serge Imbrogno: But the Mississauga site would have been part of the long-term energy plan—that 300 megawatts would have been—and whether you locate it in Mississauga or Sarnia, it’s still feeding the system. So it’s not serving a local need, but it is serving an overall system need.
Hon. Christopher Bentley: Not in the way you say it, no. There are a lot of factors, as I understand, that go into trying to locate facilities. Obviously, finding an appropriate site: It is a factor to have the generation as close to the load as possible; that’s obviously a factor. It’s not always possible; in fact, it’s not often possible. The Portlands facility in Toronto is one that’s very close to the load, and that’s got advantages. There would have been advantages in having a facility close to the load, but the facility that will be located on the Lambton generating facility will still provide the same capacity through wires that exist to the system that needs it. So that’s still a benefit.
Hon. Christopher Bentley: Yes. Whether it goes directly from Lambton to Mississauga I couldn’t tell you, because that’s not the nature of the beast. It goes into a system and the system is managed so that it feeds off into different places. But yes, it has the same characteristics and the same capacity to feed the same system that the Mississauga plant would have had.
Hon. Christopher Bentley: I can’t say exactly when you’ll know. It’s our determination and it’s our stated intention to close the coal-fired facility no later than at the end of 2014. There are, I think, two units left that haven’t been formally closed, although they don’t run very often at all. They’re going to be closed. What the future is, that’s still a discussion. We’re no closer to making that decision.
Mr. Peter Tabuns: Well, before 5 o’clock in any event. Very useful. That being the case—and I think all of us will be quite fascinated to go through that paper—this committee won’t be sitting any further, so we’ll miss that opportunity to question you in this way with those details, but I’m sure others will take advantage of their opportunities to talk to you, Minister.
Hon. Christopher Bentley: I thought that was a good feature of the review. There were a lot of groups—maybe you’ve spoken to this in the past—that were very interested in community participation in renewable energy projects. They have, in the past, been a little slower to get going. It’s always more challenging to speak to a roomful of people than to speak to one or two people. Getting them going, making sure that they are good, viable projects, has been a longer trajectory, so having some specifically set aside for that is a good thing. That’s on the bottom of page 1 of the directive that went out this morning.
Mr. Peter Tabuns: Okay. Thank you for that. Many weeks ago, I had the opportunity to ask you about climate adaptation. Since I asked you those questions, we’ve seen the impacts in the United States of more extreme weather, both in terms of storms and heat, and we’ve seen the heat impacts directly here. At the time, you told me that you had technical people who looked after these things. Have you had a chance to talk to your technical people, and have they been able to give you information indicating that we will be prepared, over the next 10 years, for the increasingly extreme weather conditions that we’re facing?
Hon. Christopher Bentley: Is it Hydro One?—about climate change effects, to share their expertise with the conference. I saw that just over the past week. Yes, I thought of you when I saw that person going there.
Mr. Michael Reid: In terms of the climate change story and the electricity sector, the electricity sector is making great progress towards achieving greenhouse gas emission reductions in several key areas. We’ve talked about some of those already today, including the phase-out of coal, which is one of the single largest initiatives in Canada and the equivalent of taking seven million vehicles off the road, as well as new clean energy, which again is going to help reduce the GHG profile of the electricity sector.
In terms of the adaptation question specifically, there are a number of things that are going on in a number of the different electricity agencies. The agencies, as well, do talk to make sure that they’re taking advantage of their specific expertise and modelling capacities as well as their specific concerns concerning adaptation, whether it be on the generation side with OPG or the grid side of things with the IESO and Hydro One.
The Independent Electricity System Operator, Ontario Power Generation and Hydro One, for example, have basically incorporated risk evaluation and management as just a basic, ongoing part of their core business delivery as well as their system planning. That includes things like severe weather events, and the potential for increasing severe weather events; just making sure that the grid does have all the capacity to withstand and to adapt to severe weather events.
In addition, the IESO, through the market rules and also some of their engagement with US standard-setters, is also making sure that, as market rules emerge and as reliability standards change, it is building into these things emerging in the ongoing studies about what climate change could mean for the electricity grid, again, whether that be severe weather events or things like hydroelectric and water supply, which again has been referred to a little bit earlier.
We also talked about the smart grid a couple of times in the proceedings today. The smart grid is also another feature of the adaptation strategies; again, just making sure the system can, in real time, continue to respond to things like severe weather events and that power can be rerouted if and when necessary.
Hon. Christopher Bentley: The answer is no. My recollection is that we had until the end of the year on their recommendation to come forward with a document—after your question, getting advised of some of the work, we’re going to be working on that approach and that strategy.
Hon. Christopher Bentley: Not specifically as a result of me, as the minister, taking a look at the issue. Michael spoke about different agencies and the work that they’re otherwise doing, and I have no doubt that their work is resulting in either investment or cost or something like that, as a result of pursuing that work, but not as a result of me taking a look at this. As I said, we’re determined to make sure that we achieve the goal that was set for us by the end of the year.
Mr. Peter Tabuns: I believe they had asked for a complete report within a two-year period. I gather that OPG has done some studies. Hydro One hadn’t published anything when the Environmental Commissioner did his assessment and commentary. You’re saying to me that Hydro One is going forward with its study and will have a report on how we’re supposed to adapt to climate change by the end of this year. Is that correct?
Hon. Christopher Bentley: No. We’ll have more to report by the end of the year, me as the minister and as the ministry make a more complete outline as a result of what’s going on in different agencies and where we think we need to get to—we’ll have more to say about that.
Hon. Christopher Bentley: I can’t speak to you about that at the moment, because I don’t know what form it’s going to take. But I think part of your questioning was about making sure that it was on the radar, and it is.
Mr. Peter Tabuns: Okay. Have we been looking at the experience in the United States this year as to what a changing climate will mean in terms of the resources that will be needed to keep the grid going?
Minister, for instance, it was clear with the recent windstorm or derecho that the level of staff on standby to keep the system going was higher than was expected. In some parts of the United States, authorities are talking about burying their power lines because they’re at much greater risk with them above ground. We’re talking substantial expenses there to make sure that people have continuous power. Have you got a group that is assessing the American experience at this point?
Hon. Christopher Bentley: Well, I would expect that all of the agencies are assessing not only our own but the American experience. As you know, Tom Mitchell is constantly travelling the world, responsible for the generation capacity that he has, and constantly assessing new requirements that are put up, in part as a result of weather and as a result of other experience.
Hon. Christopher Bentley: —a solar flare issue—and how they had one a few years ago, and now they were more aware and prepared and they were watching for it. So this has clearly been on the radar of these agencies. They’re taking steps.
I think your good counsel would be that we make sure that we learn from what has happened in the States over the past four weeks. I think it would be my expectation, and I think they’re doing it, that they are learning constantly—not only of the States but elsewhere. This is very much part of the consideration.
With regard to generation and nuclear investment, you are proceeding with proposals by SNC-Lavalin and Westinghouse for new build at Darlington. You’re asking them to do an assessment. Are you, in both cases, ensuring that whatever specifications they’re putting forward reflect the lessons we’ve learned so far from the Fukushima experience?
Hon. Christopher Bentley: Let me just, if you don’t mind, recast very briefly what we’re doing. OPG has asked Westinghouse and SNC to work up, effectively, the outline of the proposal. It does not mean we’ve committed to new build. It does not mean we’ve said that we have to have the new generation. What we’ve said as part of the various issues is that we want them to work it up. OPG will be in a position to assess what they’ve worked up and will obviously be taking a look at what they’ve worked up, and the detail, against what they have been able to learn through not only their own experience, the Point Lepreau experience, but the experience around the world. I think you can take it that they will be.
There’ll be lots of questions as we get more into any decision around that, just as we’re asking lots of questions with respect to the refurbishment approach that should be taken at Darlington and the reason that we’ve taken a fundamentally different approach to this one than fohas been taken in the past around the world. In fact, this is a first of its kind, as I understand.
Hon. Christopher Bentley: As you know, Tom Mitchell, the CEO of OPG, led the international review of Fukushima. He was in charge of it. There were 13 recommendations that came back. Obviously, those recommendations are being considered by the nuclear regulator, CNSC, which is a federal responsibility, but obviously Tom Mitchell has those recommendations. The task force had made 13 recommendations, which I can broadly divide into two categories: the technical and operational recommendations relating to the design and operational enhancements, and regulatory recommendations which require commission approval to amend the CNSC regulatory framework, which I assume have gone to them. He, in real time, not only reviewed the issue with the team, helped develop the recommendations, but now obviously would be implementing the recommendations.
The Chair (Mr. Michael Prue): Okay, a question. I just had a statement. It may be on the same point. The clerk has reminded me that since we started with the Conservatives in the first round, they would not get the last full 13 minutes. It will be divided so that each party will have exactly the same amount. It will be four minutes per party, when we get there. Was that the question?
Chair, my question is with respect to what I believe to be—I think the minister stated that we’re going to receive the documents and the correspondence and the emails and such for the Mississauga gas plant, the issue that we’ve been talking about today.
My question is whether it is possible to at least have some time to review that before further, or going into our last—even though it’s four minutes, I’m wondering if it’s possible to just have a chance to view those documents and then maybe ask some questions at a later time of the minister. Is that possible?
The Chair (Mr. Michael Prue): It would be up to the committee, if the committee wishes that. I don’t know how much time you would need and I don’t know how voluminous these documents are. It might take hours to review them to do four minutes of questioning. I’m in your hands, but I’m not sure whether the propriety of that is a good one. I’m sorry, this is—just the length of time for four minutes’ worth of questions, that’s literally one question each and one answer each.
Mr. Reza Moridi: Mr. Chair, we have been here since early May, and I think it’s time we let the minister go. He has lots of work to do as a minister. We have dealt with almost all questions in this committee. I think it’s time just to wrap up the committee today and let the minister go and deal with his very many issues as minister.
The Chair (Mr. Michael Prue): Thank you. There does not appear to be consensus so I’m going to go straight to the government. You have 20 minutes and then we’re going to divide the remaining 11 minutes, so it’s a little bit less than four minutes each.
Minister, I understand that you have a program in your ministry called the industrial electricity incentive program. Could you elaborate on that program, please, and tell us how this program helps businesses?
Mr. Serge Imbrogno: The industrial electricity incentive program was announced on June 12, 2012. It really is intended to make it easier for large industrial companies in Ontario to expand their operations and to create jobs.
While Ontario has, I think, almost fully recovered from the economic downturn, there is a need to increase electricity demand. It’s well below its pre-recession level, so there is room to grow. The program itself will help us better manage the energy supply that we have by allowing companies to access the excess power that we have in the system right now. So rather than exporting it, we can allow the industrials to take advantage of it. That’s kind of the basis of the program.
It really is intended to encourage new industries to come into Ontario, or existing industries to expand. Eligible companies that expand are expected to create jobs—that will be a key determinant of whether you get into the program—and to maintain those jobs to keep the benefit of the lower rate going forward.
We think it will stimulate investment in Ontario. It will stimulate businesses to expand because they will have a rate that’s more competitive with other jurisdictions that they’re competing against, industry in those other jurisdictions. It’s broadly consistent in terms of pricing with where other jurisdictions are, which at this point have a competitive advantage over Ontario because they have access to different sources of energy, like Quebec with access to low-priced hydro.
For business itself, I think the program works. We’ll be consulting with business, but a couple of things: It provides for a longer-term contract, which allows them to make an investment decision over a longer term. It also will provide a competitive rate so they can compete with investment in other parts of the provinces—or other parts of the country or competing US jurisdictions.
Mr. Reza Moridi: Thank you, Deputy. Speaking of the eligible businesses, could you elaborate on that? Which businesses or which types of businesses or industries are eligible to benefit from this interesting program?
Mr. Serge Imbrogno: Yes. The businesses, the large industrials—it’s across all of Ontario. It’s not tied to any particular region, so any large industrial across Ontario could put forward a proposal to get into the program.
Initially, we’re setting aside five terawatt hours of electricity, which basically equates to the industrial load that has dropped since 2007. We’re trying to get that load back up to pre-recession levels.
Companies can take advantage in two ways. There are two streams to the program. Stream 1 is really for companies that want to make major, transformative investments in Ontario. If you’re in stream 1, we would offer a longer-term contract—it could be up to 20 years—at a competitive rate. The company would be expected to make an investment of at least $250 million, so it is a substantial investment in the province. They would also be required to maintain jobs throughout that term of the contract, to maintain that guaranteed price of electricity that would be inflated over time. Those companies would put in proposals, and there would be an assessment of which one contributed most to the economy through job creation. That would be stream 1: big, large, transformative investments.
Stream 2 is really intended to provide companies that are already in Ontario with an incentive to expand. Stream 2 is really intended to provide anyone who wants to expand beyond a certain point that they would get a low rate, and they would basically get the wholesale electricity price plus an uplift if they consume during peak hours. We would build in an incentive for these large industrials to still consume during off-peak hours. These large industrials in stream 2 would be expected to expand their load, and we would have a measurement of where they are today versus where their expansion is, so there would always be a measurement of incremental investment. It would also be linked to jobs as well. Again, there would be an application process, and we would sort who’s in the program by when they come in and how much, in terms of the benefit, job creation.
Mr. Reza Moridi: Speaking of the size of industries, as you mentioned, Deputy, do you have a specific definition of which types of industries you consider as large industries to be eligible for this program?
Mr. Serge Imbrogno: Yes. We set up the general framework for the program. We are in the process now of consulting with industrials. It would be sector-based manufacturing, so we’d have a sector definition. The size would really be related to the investment they make into Ontario and into their operations.
We are consulting now, and we’ll be in the process of consulting with industry and other industry associations to firm up on the exact details of eligibility. We have a general framework. Over the next few months, we’ll firm that up and then we plan to launch the program beginning in January 2013.
Mr. Reza Moridi: It seems, Deputy, that this program is going to save quite a significant amount of money for industries and that will boost our economy and will help create more jobs in the province. Could you please elaborate a bit more on the economic impact on the province of this program when it’s implemented?
Mr. Serge Imbrogno: Part of the rationale for the program is we think there’s a lot of idle capacity right now in many industries: pulp and paper, and autos as well. Part of the stream 2 type of investments would be for these companies. If they can get a competitive rate on their marginal investments on incremental use of electricity, we think it would allow them to quite easily bring back an additional line, bring back a line that has been idle. We also think it would allow a number of companies that have to compete, maybe, with even their own head office for investments, whether they invest in Quebec, Ontario or the US—this would allow them to go forward with a plan that says, “We can bring forward this project, and here’s how the economics work.” We think it will allow industry to make those investments in Ontario.
The stream 2-type projects—if they can reduce their costs by about 25%, we think it will lower their overall costs of electricity by about 16%. It could be a substantial benefit to the large industrials that are willing to make those investments in Ontario.
Mr. Reza Moridi: How is this program going to affect our baseload production, particularly the surplus baseload—and also on the export of electricity, as we do export electricity? Is there going to be an impact of this program on the surplus overload and also on our export of electricity to our neighbours?
Mr. Serge Imbrogno: Right now, we do have excess power. Our consumption internally is about 140 terawatt hours. We produce about 150 terawatt hours. Right now, those additional terawatt hours are usually exported, and we get the marginal cost of that production. What this program does is it doesn’t incur additional—we don’t have to build any new capacity; we have the capacity and the capacity that has been contracted going forward. But what it allows us to do is instead of exporting that excess power, we can use that excess power to invest in Ontario industry and allow Ontario industry to take advantage of that excess power at that marginal cost.
The program is designed not to have any cost impact on the existing rate base, and it’s intended to make use of that excess power that we currently export to other jurisdictions. The bottom line is that we’re not incurring additional costs for existing ratepayers.
Mr. Reza Moridi: Deputy, this is going to have quite an impact on the economic growth of the province. Just to put it in perspective, how would you compare the impact of this program on the economic growth of the province to other similar programs we have in the government, other initiatives which boost our economy and create jobs? Can you give us some perspective, in your view, in terms of comparison with other government programs?
Mr. Serge Imbrogno: As we roll out the program, we’ll have a better sense as we consult with industry. We’ve had some initial indications from AMPCO, for example, that they believe a lot of the industrials that are part of their association would take advantage of this program. We think because we tied it to job creation and maintaining job creation, it’s more of a competitive process, where those companies that come in that have the best prospects for creating jobs would be chosen. We think it would create a lot of jobs.
In terms of costs, because we already have this excess power, we’re not really incurring additional costs. For us, it’s a fairly low- to no-cost program that generates benefits. But we haven’t got all the information available to say how many jobs we expect. It will be based on how much investment we get through the program.
Mr. Reza Moridi: We have a similar program, as you know, for ordinary Ontarians which is called the Ontario clean energy benefit. Could you talk a little bit about this program as well, and who is eligible to benefit from the Ontario clean energy benefit program?
The Ontario clean energy benefit was announced in the 2010 Ontario economic outlook and fiscal review, or the 2010 fall economic statement. It took effect on January 1, 2011, and will run for five years until December 31, 2015.
The intent of the Ontario clean energy benefit is to help families, farms and small businesses manage rising electricity prices as the province invests in its transition towards a clean, modern and reliable electricity system. We’ve talked a lot about those investments today.
Specifically, the Ontario clean energy benefit helps mitigate these price increases by providing a 10% benefit on the total cost of eligible consumers’ electricity bills. In terms of the customers who are eligible for this Ontario clean energy benefit, it’s offered to all customers who are eligible for the regulated price plan, which is administered by the Ontario Energy Board. This includes farms, residential consumers, small businesses and other small consumers who use less than 250,000 kilowatt hours per year of electricity or who have a demand of 50 kilowatts or less. This amounts to about four million residential consumers and over 400,000 farm and small business consumers.
A few other things to note in terms of the eligibility criteria: It includes customers who are directly metered by their local distribution companies. It also includes customers who are sub-metered in multi-residential buildings, so that would be condominiums, for example. It also includes tenants who directly receive an electricity bill from their landlords, as well as customers who will sign or have signed retail contracts with electricity retailers.
Mr. Reza Moridi: What you’ve mentioned to me about this 10% discount, basically, or reduction in the costs—what costs are included in that 10%? Is it the total cost or part of the cost of electricity included in that 10% discount?
Mr. Michael Reid: There are a number of elements to consumers’ bills. To give you a sense of the elements that the clean energy benefit applies to, I can outline them and then maybe talk briefly about a couple of them.
Specifically, the elements that the clean energy benefit applies to are the commodity price of electricity, all delivery charges, regulatory charges, the global adjustment, the debt retirement charge, as well as any harmonized sales tax that’s payable in respect of any of those elements I just outlined. In addition, for customers who are sub-metered, the benefit also applies to any fees that they may be charged by their sub-metering providers. It’s probably also important to note that there are a couple of things that aren’t covered by the benefit that include any amounts on bills that are carried forward from previous invoices, any penalties and interests, as well as charges that don’t relate to electricity—for example, some consumers will receive a bill that has both their electricity as well as, say, water and sewage on it; obviously, it only applies to the electricity portion—and any other sort of one-time charges that appear on the bill.
Mr. Reza Moridi: In the 2012 budget, which the government introduced, there have been, I believe, some changes to the Ontario clean energy benefit. Could you elaborate a bit on that, if there have been any changes?
Mr. Michael Reid: Yes, definitely. There were indeed changes that were announced to the Ontario clean energy benefit in the 2012 Ontario budget. The specific change that was announced was that the Ontario clean energy benefit would basically limit financial assistance to eligible consumers to the first 3,000 kilowatt hours of electricity that they consumed each month. Consumers who use more than 3,000 kilowatt hours per month will continue to receive the benefit up to the maximum of this 3,000-kilowatt-hour consumption, but any consumption over and above that would no longer be eligible for the benefit.
It’s important to note that in putting this cap on the financial assistance of the program, the eligibility criteria themselves did not change at all, so all residential consumers, farms and small businesses that meet the eligibility requirements will continue to qualify for the Ontario clean energy benefit.
As well, under this change, the Ontario clean energy benefit will continue to provide a full 10% benefit to almost all residential consumers. Just to give you a sense, a typical household of four would consume, on average, about 800 to maybe 1,000 kilowatts per month, so that’s well below the 3,000-kilowatt cap. Just to give you a sense of what the benefit would be, if you take a typical household that uses 800 kilowatt hours a month, the credit is about $160 per year.
Mr. Reza Moridi: So basically, what you’re saying is that this cap, which the government introduced—3,000 kilowatt hours per month consumption—doesn’t affect any residential or small businesses? For them, this reduction would be as usual, as they had in the past? They will continue to benefit from this 10% reduction, practically speaking?
Mr. Michael Reid: Yes. Most residential as well as small retail businesses will not be affected by the cap. Larger users will be affected by the cap. In that instance, I think it’s important to note that there are conservation programs that are in place to help some of the larger users as they transition away from the Ontario clean energy benefit.
As well, it’s probably also important to note that the cap was implemented basically as a responsible way to balance both the needs of electricity consumers on the one hand as well as the fiscal implications of providing electricity price relief in the current fiscal situation.
Mr. Reza Moridi: I wonder, Mr. Reid, how this Ontario clean energy benefit affects people who are living in condominiums, apartment buildings or condo townhouses? How does this affect them? Because they pay their electricity bill as a part of their condo fees or apartment fees, how does this affect them, particularly with the cap that you have now introduced, the 3,000 kilowatt hours per month?
Mr. Michael Reid: Yes, that’s an interesting question. Recently a regulation has been put in place that does detail the way in which the cap will be calculated in a variety of circumstances, including multi-residential units like apartments or condominiums. Specifically, the way the cap will apply in these multi-residential instances depends on how the building is metered. So there are two different ways in which buildings are metered: They’re either bulk-metered, which is a single meter for a building, or they can have individual meters for individual units.
Mr. Rick Nicholls: Thank you very much, Chair. Minister, I’m going to change the tone a little bit here. My staff and I have visited the families that suffer from the presence of industrial wind turbines on their property—this is all about health. Have you been up close to one of those turbines on a windy day?
Hon. Christopher Bentley: Well, the approach that we’ve taken to wind turbines and their location has been based, first and foremost, on the advice that we’ve received from Ontario’s medical officer of health and the studies and information out there. We’ll continue to take a look at that and act in the best interest of Ontarians.
Mr. Rick Nicholls: Okay. Well, again, families in my riding, Minister, describe the noise that they hear from these turbines similar to the effect achieved by driving down the highway and opening up a passenger window—you know, that helicopterish kind of noise that’s achieved by air displacement.
Now, Minister, your government has in fact commissioned a University of Waterloo study to examine the health effects of living near industrial wind turbines, but the development of wind turbines is still pushing ahead despite this study not being released. Just recently, yesterday, Health Minister Aglukkaq at the federal level also has made a comment and said that these health issues deserve deeper consideration.
Some of the effects, Minister—and I have in fact spoken to a number of people—include: insomnia, dizziness, little children saying, “Mommy, when are the bees going to stop buzzing in my ears?”—and that’s a real thing for these children—nausea, increased blood pressure and so on. Of course, these wind turbines are getting bigger, and I dare suspect that, as a result, the ill effects from these wind turbines will also increase as time goes on.
My question to you, Minister, is a very simple question. I’m going to ask you this because health is a very serious thing. In light of what’s going on with regard to our health budgets etc., will you agree today on placing a moratorium on all currently agreed-upon and proposed industrial wind turbines until more conclusive studies on health effects on people are conducted? The health minister at the federal level stated that a study—until 2014. We can’t wait that long. I’m asking you: Would you, in fact, place a moratorium today on all proposed and currently agreed-upon wind turbines in Ontario until—
Just back to Bruce B, there are a number of proposals that Bruce has made, in fact, for the Bruce B units which could extend their lives for a number of years, and we’re taking a look at those proposals.
Hon. Christopher Bentley: I’m going to take the opportunity, at the front part of these three minutes, to go back to something that Mr. Nicholls was asking me because he didn’t know that he was about to be—the three minutes go so quickly.
Hon. Christopher Bentley: With respect to the approach that we’ve taken to siting green energy projects, generally, and wind projects, specifically, we’ve always acted, and we’ll continue to act, on the basis of the best health interests of Ontarians and the best medical advice that’s out there. The Chief Medical Officer of Health has given us advice. There are many studies—some Ontarian, some Canadian, some North American, some international—which outline the health considerations. The setbacks that we’ve taken are consistent with the direction from the medical officer of health from those studies. We have some of the most aggressive and significant setbacks anywhere in the world. We’ll continue to take a look at information as it comes in, whether it’s from Dr. Sivoththaman, from the Health Canada study, or any other study that comes in before either of them, to make sure that we’re always acting in the best interest of Ontarians and on the most up-to-date and reliable health information.
You’re right: We’re investing in green energy because health is important. The health of Ontarians is why we made a determination in 2003 to get out of coal, because burning coal creates dirty air, and dirty air makes people sick. That’s why we’re getting out of coal. That’s why we’ve looked at cleaner sources of power—whether it’s wind, solar, bio, nuclear or hydro. We’re looking at cleaner sources of power to make sure that we are cleaning up our generation of electricity in the sources and we’re able to make sure we have the cleanest possible.
I just want to thank the members of the committee and the Chair. I want to thank my deputy minister, the staff, the ADMs: John Whitehead, Rick Jennings, Sue Lo, Michael—the others who have been here all the time, all of those people who are not here who have been able to participate and prepare.
Obviously, the members of the committee—all members of the committee who have been sitting on this—you won’t mind if I give a special nod to my colleagues who are here today and have been here in the past; and all of the staff who happen to be present in the room, some of those visible, some up in booths and not quite visible; and all those who have had the benefit to assist not only me and my staff, but I suspect each and every one of us in the course of the number of minutes and hours that we’ve been able to be here. So thank you very much, and that’s the end of that.
The Chair (Mr. Michael Prue): I have a request for a recorded vote. Just so everyone is aware, if you want to follow along, page 183 sets out what these numbers actually mean. Vote 2901 is the ministry administration program.
Before we adjourn, I would ask, if those documents are forthcoming to the clerk, that the clerk make them available to members of the committee. I would assume that any member of the committee who wants them would come back to this room in fairly short order.
The Chair (Mr. Michael Prue): If you want. You can do whatever you want. The clerk is responsible, and I trust that she will do it as expeditiously as possible and make them available to those members who want to wait. To those who don’t want to wait, I’m sure that they will be available tomorrow.
Having said that, we are adjourned until 8 a.m. on Thursday, July 19, 2012, to commence the estimates of the Ministry of Finance for seven and a half hours. Should we finish that, which I assume we will—I’m ever optimistic—then we will continue with the Ministry of Health and Long-Term Care for the remaining time on Thursday, July 19.