Private company 'gamed' $100M from Ontario's electricity system

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Hydro customers shelled out about $100 million in "inappropriate" payments to a natural gas plant that exploited flaws in how Ontario manages its private electricity generators, CBC News has learned.

The company operating the Goreway Power Station in Brampton "gamed" the system for at least three years, according to an investigation by the provincial energy regulator.

The investigation also delivers stinging criticism of the provincial government's Independent Electricity System Operator (IESO), slamming it for a lack of oversight.

The probe by the Ontario Energy Board's market surveillance panel was completed nearly a year ago, but was only made public in November because it was buried on its website without a news release. CBC News is the first media outlet to report on the investigation.

The excess payments to Goreway Power Station included:

• $89 million in ineligible expenses billed as the costs of firing up power production.
• $5.6 million paid in three months from a flaw in how IESO calculated top-ups for the company committing to generate power a day in advance.
• Of $11.2 million paid to compensate the company for IESO ordering it to start or stop generating power, the investigation concluded "a substantial portion ... was the result of gaming."

Most privately-owned natural gas-fired plants in the province do not generate electricity constantly, but start and stop production in response to fluctuating market demand. IESO pays them a premium for the costs of firing up production, through what it calls "generation cost guarantee" programs.

But the investigation found IESO did little checking into the details of Goreway Power Station's billings.

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Power company 'gamed' $100M from Ontario's electricity system, investigation reveals - Toronto - CBC News

 

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The Progressive Conservatives are calling on police to investigate $260 million in “ineligible expenses” — including staff car washes and scuba gear — billed by nine power plants, as revealed in last week’s auditor general report.

These are “abuses so egregious that a second look by law enforcement is only prudent,” Tory MPP and energy critic Todd Smith says in a one-page letter to OPP Commissioner Vince Hawkes.

“I have serious concerns about what appeared to be a broad and systemic abuse of the energy system and, ultimately, the hard-earned money of ratepayers,” Smith added.

“I have no faith in the Liberal government’s ability to punish the companies responsible.”

Previous requests for police investigations from opposition parties at Queen’s Park have resulted in charges against two of Premier Kathleen Wynne’s Liberal organizers in the 2015 Sudbury byelection — although a judge dismissed that case in October.

There were also criminal counts in regard to allegedly deleted documents after two gas-fired power plants were scrapped by then-premier Dalton McGuinty before the 2011 election.

A verdict in that trial, involving two former key McGuinty aides who have pleaded not guilty, is due Jan. 19. McGuinty was not under investigation and co-operated with police.

The hard-hitting report by auditor general Bonnie Lysyk blamed lax oversight of electricity companies by the province’s Independent Electricity System Operator (IESO) for the questionable expenses getting through.

The Conservatives and NDP have been calling on the Liberal government to force full repayment of the monies, arguing $92 million of the $260 million cited by Lysyk as outstanding and should be returned to hydro ratepayers.

But IESO vice-president Terry Young has said the $260 million number is “extreme,” with $200 million being a more “reasonable” interpretation.

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https://www.thestar.com/news/queens...eligible-expenses-billed-by-power-plants.html