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Ontarians charged for ineligible power generator expenses, demand action: over $260 million in costs

Ontario residents recently discovered that they had been charged millions for ineligible power generator expenses. A report released by Auditor General Bonnie Lysyk revealed that the Independent Electricity System Operator had not implemented changes that could have saved ratepayers $30 million per year, despite repeated recommendations to do so from the Ontario Energy Board.

 

 

According to Lysyk’s report, nine generators claimed $260 million in ineligible costs between 2006 and 2015, approximately two-thirds of which has been repaid. One natural gas plant in Brampton, however, gamed the system for $100 million. Generators also claimed thousands of dollars per year for various ineligible expenses, some of which include staff car washes, carpet cleaning, landscaping, scuba gear, racoon traps, and road repairs. One generator claimed $175,000 for coveralls and parkas over the course of two years.

In 2003, the IESO implemented a program that reimburses power generators for fuel, maintenance, and operating costs. Lysyk stated that the program, which was developed at a time when Ontario’s grid had supply issues, was implemented in a way that “bills could be submitted but without any support for the bills.” Residents continued paying these bills, not realizing what was happening. Residents eventually began to question rising costs and inconsistency, and they began to request more detailed information regarding their bills. It was then that the IESO became aware of the situation.

The program itself is deemed necessary, but the IESO is looking at changes that need to occur and investigating charges to see how much still remains to be reimbursed. Energy Minister Glenn Thibeault defended the program in itself, stating that it plays an important role in the electricity system. “These are programs that ensure that when Ontario families and businesses need electricity, it’s there for them,” he said. “If these programs were eliminated, reliability would be put at risk.” He also maintained that the program “helped avoid the need to build costly new generation in the longer term, which is a benefit to all ratepayers across the province, both residential and commercial.”

However, Ontario residents are understandably upset after the revelations, and they have since called upon the province’s Independent Electricity System Operator to release the names of the power generators so that action could be taken.

Todd Smith discussed the concerns of Ontario’s citizens, calling expenses like scuba gear and raccoon traps “insane.” He states that these actions “are the types of things that drive people crazy when they’re struggling to pay their own hydro bills and they’re seeing stuff like this ending up on their electricity bill.”

The IESO has implemented some changes that would prevent future billing of ineligible expenses, but ratepayers still want those responsible to be held accountable. The IESO’s Vice President of Policy Terry Young stated that the IESO cannot disclose that information, though the board could change their rules surrounding confidentiality in the future.

“We could look at changing the rules on our own,” he stated. “Would we do this? I guess we could look at something like this, but to be honest we haven’t gone down that path yet.”

Economic Development Minister Brad Duguid stated that he personally has no problem with the names of the generators being published and that in his opinion, “everything that can and should be made public ought to be made public.” However, he also said that it is the IESO’s process and that it was up to them to make those changes.

 

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