The Ontario Government admits that the cost of electricity will increase by 40 percent over the next five years. Part of the reason is that the power grid—the network of power lines and transmission facilities has been allowed to deteriorate and massive upgrades are needed. In addition the nuclear facilities which are the backbone of the power system are aging and need expensive retrofitting. Skimping on maintenance of our electricity infrastructure is only one part of the tangled mess that has been made of energy policy in Ontario. Ontario developed its manufacturing base by the introduction of “power at cost,” the mantra of manufacturers like Sir Adam Beck when they first started Ontario Hydro. It wasn’t long after Hydro was established that industry began to spring up all over the province. The availability of relatively cheap power was what attracted the steel industry to Hamilton. Today Ontario has one of the highest power rates in North America. Electricity costs are trending downward in the US, but upward here. The green energy program is paying hundreds of millions of dollars to producers, but the power is being wasted as it is sold to the US at a huge loss.
The government has made some huge mistakes in the way it has handled the location of power generation sites. When the government tried to place gas fired plants in Mississauga they were nearly run out of town by angry residents. Yet this was the same government that, in its zeal to get rid of coal fired plants, shut down Mississauga’s Lakeview Generating Station in 2005 without having a suitable replacement in place. That forced the government to find a new location in Mississauga, which is what triggered the public outcry and the government’s panicky withdrawal of the gas plant on the eve of the last election. Even worse the Lakeview plant was demolished. At the very least the Lakeview site should have been preserved as the location for a new operation since transmission lines were already in place. Meanwhile we are running out of places to store natural gas in North America. The price of natural gas sits at a quarter of the price it was in 2006 according to the Ontario Energy Board. It’s estimated that the proven reserves of natural gas currently sit at 100 years, and rising, as the result of the new shale fracturing process that is opening up new deposits all over the continent. Hopefully the government will consider retrofitting coal fired plants to gas before abandoning thermal generation altogether. At the very minimum the existing thermal sites should be the first choice as sites for replacement generation. We need a return to cheap power policies in Ontario if we are to regain our position as the engine of the Canadian economy.