Ontario’s new Progressive Conservative government is pulling the plug on 758 green energy contracts in a bid to save $790 million.
Energy Minister Greg Rickford made the announcement Friday.
“We clearly promised we would cancel these unnecessary and wasteful energy projects as part of our plan to cut hydro rates by 12 per cent for families, farmers and small businesses,” Rickford said in a statement.
“In the past few weeks, we have taken significant steps toward keeping that promise,” the minister said.
“For 15 years, Ontario families and businesses have been forced to pay inflated hydro prices, so the government could spend on unnecessary and expensive energy schemes,” he said, referring to previous Liberal governments in power from 2003 until the June 7 election.
“Those days are over.”
During the tenure of former Liberal premiers Dalton McGuinty and Kathleen Wynne, the province spent billions subsidizing green energy generated by wind turbines and solar panels.
Rickford said none of the cancelled projects have reached “development milestones,” so it should be cheaper to scrap them now.
The minister said Premier Doug Ford’s new Tory government plans to introduce an amendment in the legislature to protect ratepayers from bearing the brunt of any financial penalties or possible litigation.
“Even after all costs are accounted for, ratepayers can expect to benefit from $790 million in savings from this one decision,” the government said.
But Queen’s Park did not provide a list of the 758 contracts or a breakdown of how that amount was calculated.
A senior official in the previous Liberal government warned that breaching the contracts would be expensive.
“When we looked at each individual project through the Ministry of Energy when premier Wynne came to office it was clear that the costs of breaking contracts would be simply and obviously irresponsible,” said the former Wynne official.
“That was the advice provided by the public service. It makes no sense financially and even less sense in terms of saying to the private sector domestically and internationally that this new government can’t be trusted to meet its legal obligations,” the Liberal added.
“Why would firms do business in Ontario if they see this kind of government meddling?”
The Independent Electricity System Operator said Friday that Rickford had “directed the IESO to wind down certain feed-in-tariff and large renewable procurement contracts.”
“The directive notes that the IESO’s recent system planning work indicates that Ontario’s current contracted and rate regulated electricity resources are sufficient ... for the near term,” the regulator said.
“And that there are other means of meeting future energy supply and capacity needs at materially lower costs than long-term contracts that lock in the prices paid for these resources,” it continued.
NDP MPP Peter Tabuns (Toronto-Danforth) said Ford’s “war on science and the environment may be pleasing his friends in back rooms, and fulfilling promises he made to social conservatives that supported his election bid.”
“But for the rest of us, it’s going to means lost jobs, billions of dollars wasted, and tangible environmental damage,” said Tabuns.
“We’re calling on Mr. Ford to put a pause on cancelling these contracts until we know just how much it’ll hurt.”
Gideon Forman, a policy analyst with the David Suzuki Foundation, said “cancelling renewable energy makes no sense” for the environment or the economy.
“It will kill Ontario jobs and scare away investors. Renewables are the cleanest, lowest-cost option. Maybe that’s why economic powerhouses like Germany are investing in them,” said Forman.
Earlier this week, the Tories zapped the controversial White Pines industrial wind farm in Prince Edward County, south of Belleville, which could cost ratepayers $100 million in penalties.
Begun in 2009, it is nearing completion and was supposed to open this fall.
But many residents of the bucolic area strongly oppose the nine-turbine project.
The president of the wind farm’s German parent company penned an open letter to Ford on Friday, urging the premier to reconsider.
“Our company will incur a serious loss of over $100 million,” wrote Hartmut Brösamle, CEO of WPD in Bremen, Germany.
“A new elected government has any right to pursue a different energy policy,” said Brösamle, adding his company’s project is being “ruined retroactively.”
Ford has shown himself to be an interventionist when it comes to the energy business. On Wednesday, he engineered the departure of Hydro One’s CEO and board of directors.