Energy Professionals: True Cost Plant of Gas Plant Flip-Flops Well Over $180 Million

TORONTO, July 11, 2012 /CNW/ - The Society of Energy Professionals says allowing Greenfield South Power to build a gas generating plant on Ontario Power Generation's Lambton Generating Station site is an irresponsible decision which will cost Ontarians well in excess of the $180 million price tag announced by Energy Minister Chris Bentley Tuesday.

"The government is trying to paper over the mistakes that they made in cancelling the Mississauga and Oakville gas plants", said Sheppard "Unfortunately their mistakes are being papered over with taxpayer dollars."

"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", said Sheppard. "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."

"Privatizing this electricity generation will undoubtedly result in increased electricity rates for consumers," said Sheppard. "That's where the hidden costs come in".

OPG receives spot-market price for its thermal generation. For first 6 months of 2012 the spot market has been paying a weighted average of approximately 2 cents/kWh.

"We'll never know what Greenfield gets for this privatized generation, because they will get a secret contract price, but you can be sure it will be well over 2 cents/kWh.", said Sheppard. "Ratepayers will be on the hook for the difference in the form of the Global Adjustment that goes on their bills."

Southwestern Ontario is already served by an existing 1000 MW gas plant in Sarnia and the 540MW Brighton Beach plant in Windsor. If OPG's existing Lambton coal plant were converted to gas/biomass fuel it could generate between 800 and 1000MW, suggesting the new Greenfield Lambton plant is a product of political expediency not system necessity.

The deal announced Tuesday does not mitigate the province's liability for the TransCanada gas plant which was cancelled in Oakville immediately prior to the last provincial election, suggesting another costly settlement is yet to be announced.

"The bottom line is that we have to stop writing our electricity policy on the back of an envelope.", said Sheppard "We see now how costly it is when we don't have solid, evidence based long-term planning. Unfortunately with the proposed changes to the long term planning process contained in Bill 75, we see the government continuing to move in the exact opposite direction"

The Society of Energy Professionals represent more than 8300 engineers, telecommunications and information technology professionals, scientists and others who for generations have designed, built, operated and helped safeguard Ontario's vast electricity system. The Society's members work for Ontario Power Generation, Hydro One, Bruce Power, the IESO, the OEB, the ESA and other key electricity sector employers.

Bob Kanduth
Communications Officer
416.979.2709 x 4002 Cell 647.404.8918
or
Rod Sheppard
President
416.979.2709 x 3039 Cell 416.670.6835