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Taxpayers on hook for smart meters, poor value for public money

A flawed smart meter program and above market rates have Ontario residents paying billions of dollars extra for electricity, the auditor general reported Tuesday.

Most residential and small business ratepayers pay time-of-use pricing, enabled by a $2-billion smart-meter program that has so far spent double its projected cost and has not led to the government’s electricity conservation goals, auditor general Bonnie Lysyk wrote in her report

In addition, she said the cost for time-of-use electricity pricing and the Global Adjustment that sprung out of the Green Energy Act will cost ratepayers $50 billion between 2006 and 2015. Lysyk found the global adjustment increased by 1,200 per cent between 2006 and 2013 – meanwhile, the average electricity market price has dropped by 46 per cent.

The global adjustment is about 70 per cent of the electricity charge on bills and as a result the difference between on-peak and off-peak pricing narrowed to the point where it is “undermining time-of-use pricing as an incentive for ratepayers to shift to off-peak,” Lysyk wrote.

“There’s a reason why my office deals with hydro issues more than almost every other government ministry and agency combined,” said Todd Smith, MPP Prince Edward Hastings. “It’s because what this government has done to the grid could end up leaving poor and middle class people in the dark. Hydro in this province is a necessity – especially in the winter – and all this government has done is make it more expensive.”

Energy Minister Bob Chiarelli says the auditor general does not understand the “complex” system and disputes her numbers. He said the smart meter cost is closer to $1.4 billion and that some charges will not be passed on to ratepayers after Ontario’s Energy Board reviews regulatory submissions.

Lysyk also expressed concern about Ontario’s growing debt – more than $267 billion as of March and noted Infrastructure Ontario loans showed that 74 public-private project costs were about $8 billion highter than if they had been looked after by the public sector.

“No one is ever held accountable.” Smith said. “No minister is ever fired, or resigns. No one is ever held responsible when this government wastes money. That’s why we’ve repeatedly seen this government lurch from one billion dollar scandal to another. If they held someone responsible, maybe they’d have less incompetence.”

Ontario government programs  examined didn’t always provide value for money or deliver services as effectively as the public has the right to expect, Lysyk said following the release today of her 2014 Annual Report Dec. 9.

“Both of these two issues were at the heart of the 12 value-for-money audit reports we prepared this year,” she said after tabling the 600-page annual report, her second since becoming Auditor General in 2013.
“In some areas, taxpayers did not get value for money from the large amounts of public money spent. In other cases, services were not delivered as effectively as Ontarians have a right to expect.”
Among the findings in this year’s Annual Report:
Although nearly $2 billion was spent to install new “smart” electricity meters across the province, the government’s stated objectives of reducing power demand at peak times and eliminating the need for new sources of power are not being met.
The Alternative Financing and Procurement (AFP) approach used by Infrastructure Ontario assumed that the public sector would not have been able to successfully deliver 74 infrastructure projects on time and on budget. Specifically, Infrastructure Ontario’s AFP approach assumes that the risks of cost overruns and delays are about five times higher when the public sector manages infrastructure projects. The AFP approach assumed that it would be reasonable for taxpayers to incur an estimated $8 billion more (including $6.5 billion in higher financing costs) to have this work done by the private sector on time and on budget.
The Provincial Nominee Program lacks effective controls to mitigate the risk that people who are not qualified for the immigration program are nonetheless being admitted, and provincial officials didn’t always report attempted immigration fraud to federal authorities or law enforcement.
Infrastructure Ontario’s Loans Program made a higher-risk loan of $216 million to a subsidiary of the MaRS Discovery District, a not-for-profit organization, but the ultimate costs and benefits of this loan are unclear.
The Financial Services Commission of Ontario needs to better address the growing level of under –
funding in defined-benefit pension plans in Ontario to better protect the 2.8 million members of these plans.
The Ministry of Community Safety and Correctional Services needs to improve its supervision of, and rehabilitation programs for, adult offenders serving their sentences in the community to reduce the risk to the public and lower the reoffend rate.
The Ministry of Education needs to do significantly more to reduce the incidence of serious occurrences at licensed daycares by strengthening inspection processes and related enforcement actions.
The province has not inspected 45% of residences for people with developmental disabilities since at least 2010, creating risks. Wait lists are high, and provincial funding to homes is based on an out-dated funding model rather than the needs of individuals.
Fourteen years after a Commission of Inquiry that followed the Walkerton drinking-water tragedy recommended adoption of source-water protection plans, Ontario still does not have many of the plans in place, nor timelines for implementing the policies recommended in the plans.
The Ministry of Health and Long-Term Care lacks good information to monitor whether its Immunization Program operates in a cost-effective manner. For example, the Ministry does not track information on the total costs of delivering the program; nor does it have a reliable system for tracking immunization records.
The Ontario Energy Board needs to do more to verify the information submitted by gas utilities in their applications for rate increases. The Board should more fully assess the different approaches gas utilities use to recover their costs because this has a direct impact on the rates charged to consumers.
There is no co-ordinated system for Palliative Care services in Ontario. The Ministry of Health and Long-Term Care needs to gather more information on the services available across the province, as well as about the costs of services, patients’ needs and what mix of services would best serve those needs in a cost-effective way.

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  1. Mark says:

    Jack; the province is 300 Billion in debt and cannot meet the ever increasing costs of infrastructure and health demands. I spoke to this 2 years ago and the crisis and cuts on Ontario citizens that would result. The debt service is soon becoming the #1 gobbler of taxpayers funds. Liberals have done poorly but the Harris Conservatives set the table with deregulation of Ontario Hydro and the ill thought out amalgamation of hospitals and municipal governments. There is no one innocent in this mess! As I said when the deep severe cuts arrive which they will have to, those of us with money will leave rather than face the severe pain in our retirement years. Only makes sense. Adding to this dilemna is a federal Tory gov’t that see’s primarily the West, will not reduce Quebec funding and because Ontario votes Liberal leaves us to flounder. Just food for thought!

  2. Jack Smith says:

    We all want a refund and those Goverment Crooks should get prison time!!!!

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