Consultant says Ontario gas plant’s cancellation cost 15 times more than claimed

The cost of cancelling a controversial gas-fired power plant in Oakville was more than 15 times higher than the Ontario government has claimed, an energy expert told a legislative committee investigating the matter.

Energy consultant Bruce Sharp estimated the government took a $638-million hit when it put the brakes on the plant in 2010, far more than the $40-million figure cited by the Liberals.

He also slammed the government for making decisions on energy policy based on political calculations.

“We’re sitting here today because of the siren call of political intervention,” he said. “And we really need to get away from that political intervention and swear a blood oath to not meddle in electricity policy in Ontario.”

The government’s $40-million cancellation figure represents only the sunk costs – money that had already been spent on the project before it was killed – and did not take other factors into account, Mr. Sharp said.

After the Oakville site was kiboshed, the government moved to build the plant further-away Lennox, which Mr. Sharp maintains would have resulted in higher costs to pump natural gas to the plant and transmit electricity from the plant to the GTA.

On a second cancelled power plant, in Mississauga, he said the government paid $28-million more than it needed to, since moving the plant to Sarnia could have saved on natural gas transportation costs.

The Liberals immediately tried to play down Mr. Sharp’s analysis, asserting transmission upgrades would have happened even if the plant had been built in Oakville, and that his calculations were preliminary.

“We should take Mr. Sharp at what he offers, which is his opinion,” said MPP Bob Delaney, a member of the committee. “He didn’t produce a study or a clear, compelling, quantitative analysis on which we can base the cost of the relocation of these two plants.”

The New Democrats, who called Mr. Sharp as a witness, hailed his testimony for validating their assertion the government has low-balled the costs of the plants.

“It was pretty clear today in the hearings that the government has not come clean on the cost of the Oakville plant cancellation,” said MPP Peter Tabuns. “The Liberal government...has to start being open and honest about the scale of the problem that we’re facing here.”

Progressive Conservative MPP Vic Fedeli said Mr. Sharp is a credible witness and well-placed to evaluate the costs.

“The fact that he has not worked for any of the parties involved makes him the most independent person to do that,” he said.

The Oakville and Mississauga plants drew fire from area residents and local politicians. The opposition parties argue the Liberals cancelled both purely to save their party’s seats in the area during the 2011 election.