Colin Andersen, CEO of Ontario Power Authority (OPA), testified April 30, 2013 before the committee investigating the cost of moving the gas plants from Mississagua and Oakville. He arrived armed with a study prepared by a firm hired by the OPA to put a price on that latter move. The Liberals have continually stated the taxpayer cost of the Oakville move was $40 million.
When Andersen handed in the 70 page document this writer found it very strange that the OPA, founded by the Liberals to do “long-term” planning for the energy sector, was unable to develop it's own estimate of the gas plant move. They are all well paid civil servants (81 on the 2012 Sunshine List) yet they had to contract an outside firm for the report! The report, prepared by NERA Economic Consulting, put the cost of the Oakville move at $310 million. If one examines the calculations of how NERA arrived at that figure you realize that the actual cost of the move was $849 million but because the 900 MW gas plant will deliver power 5 years later then planned (2019 instead of 2014) NERA deducted $539 million, calling it, “Time deferral”. That amount represents the net revenue requirement (NRR) that would have been paid had the plant started producing power in 2014. The Auditor General granted the Liberals a similar dispensation but only to the extent of $56 million in respect to the Mississagua gas plant. Future obligations to ratepayers of $595 million have been pushed out 5 years. Perhaps an economist can justify that calculation but this retired banker has trouble understanding how you can save money by delaying a committed purchase to the next day. Read more »
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