Wednesday, October 10, 2012

The $733-million gas boondoggle

The Financial Post has an article up written by Bruce Sharp that tallies the cost of moving a generating station procured to service a local area hundreds of kilometers from that area.
Bruce is, I argue, the most knowledgeable voice in the province on electricity pricing forecasts.

The $733-million gas boondoggle | FP Comment | Financial Post:
It’s hard for one to choose the lesser of two evils from the saga of additional costs arising from moving the site of TransCanada Energy’s 900-megawatt natural gas-fired generation station from Oakville, Ont., to the site of Ontario Power Generation’s (OPG) Lennox Generating Station: whether ignorance or intentional distortions are at play.

In that Ontario electricity ratepayer dollars — and a lot of them – are involved, the process deserves transparency, investigation and explanation of a number of complex issues and calculations to check assertions made and to determine costs not documented.  I assert that additional costs to move the plant will exceed $733-million – much, much more than the $40-million presented by the Ontario government.
Continue Reading at the Financial Post:

The Hamilton Spectator also has a John Spears article that features statements from Bruce Sharp: Oakville gas-plant closure will cost $700m: Analyst

Ontario electricity users are on the hook for more that $700 million in extra fees because of the government’s decision to move a gas-fired generator out of Oakville after residents complained.
The province has acknowledged that moving the TransCanada Corp. plant from Oakville to the site of the Lennox generating station near Kingston, will cost an extra $40 million.
But energy consultant Bruce Sharp says previous estimates of the cost of moving the plant haven’t taken into account several huge items not explicitly costed in the most recent agreement.
He says the issue requires further scrutiny:
“People are saying: “Let’s get the auditor-general to look at this,’ and I agree.”

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