Gas plant scandal won’t go away for Ontario Liberals

TORONTO — The Globe and Mail

The partially built structure of a gas-fired power plant that was to be constructed in Mississauga, Ont., photographed Feb. 21 2013. (Fred Lum/The Globe and Mail)

A raft of new documents on the expensive cancellation of two gas-fired electricity plants has deepened a scandal for an Ontario Liberal government that is trying to distance itself from the controversy under a new leader.

And in the first official acknowledgment the shuttering of the two plants – in Mississauga and Oakville – might have cost more than the $230-million previously cited by the government, the Ontario Power Authority CEO said the total price tag is still unknown.

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The Liberals, however, attempted to manage the fallout from the controversy differently this time, by getting out in front of it Thursday. Energy Minister Bob Chiarelli personally announced the document release in the legislature.

“This batch of documents is voluntarily being provided. There was nobody that was snooping around that said, ‘You better release these documents, or else,’” Mr. Chiarelli said. “We took the initiative when we found out about these documents to release them of our own volition. That should be evidence of our willingness to be open and transparent.”

“It’s disappointing that we didn’t know about [the documents], but we want all that information to be out in the public,” Premier Kathleen Wynne said.

The papers themselves comprise 592 pages, mostly e-mails discussing “Project Fruit Salad,” “Project Banana” and “Project Apple” – code names for plans to cancel and relocate the plants.

They contain dozens of invoices submitted to the OPA on the Mississauga project well after the government pulled the plug. The Liberals promised in the dying days of the 2011 election campaign to cancel the project because of mounting local opposition. But the company that had the contract, Eastern Power Ltd., did not stop construction until two months later, in November.

Bills were still rolling in that December, including $57,319 from a lumber company, $72,455 for machinery rental and $9,268 for portable toilets. The government paid $190-million in compensation to cancel the Mississauga plant, with money going to Eastern’s suppliers and eight hedge funds in the U.S. and Cayman Islands to cover the construction loan.

The documents also provide further evidence former premier Dalton McGuinty’s closest advisers were directly involved in sensitive talks regarding the Oakville plant. In an Aug. 16, 2011, e-mail, an executive at Ontario Power Generation, which owned some of the properties under consideration, said the Oakville discussions were being led by David Livingston, then-head of government agency Infrastructure Ontario. He was appointed Mr. McGuinty’s chief of staff in May, 2012.

Last September, at the behest of the opposition, the government released 36,000 pages of documents on the cancellations. Weeks later, the government turned over 20,000 more, which it said had accidentally been missed in the first search. The opposition, however, claimed the second group had been withheld in a deliberate cover-up and brought forward a contempt motion.

Mr. McGuinty abruptly resigned and prorogued the legislature.

Shortly after, the OPA realized it had overlooked even more documents by leaving out several search terms – searching for “Project Banana” but not “Banana,” for instance – OPA chief executive Colin Andersen said. The OPA did not finish combing through the new files until Wednesday, and Mr. Andersen stepped out of a board meeting to inform the deputy energy minister, who passed the word on to Mr. Chiarelli. OPA chair Jim Hinds said he personally apologized when Mr. Chiarelli telephoned him at 4:45 a.m. Thursday.

“We are in the business of producing electricity, not producing documents,” said Mr. Hinds, adding later: “We messed up the search.”

Asked about the total price tag for putting the brakes on the plants, Mr. Andersen said the cost would not be known until the province’s Auditor-General finishes examining the deal – a departure from the government’s previous assertion that $230-million had been spent on the cancellations.

Had the Liberals not stepped in, he said the OPA would have finished building the Mississauga plant, which he described as a “good project that would provide cost-effective electricity.” Having politicians interfere with such decisions can sometimes be difficult, he said.

“Does it always go smoothly? No. … But on balance, I think it works,” he said.

Mr. Hinds and Mr. Andersen both flatly denied that political staff told them what to release or what to redact.

The opposition parties, however, didn’t buy it, and accused the government of continuing to sit on information about the plants.

“At this point, it is very hard to trust anyone who has come back twice and said, ‘oops, we missed something,’” New Democratic Party energy critic Peter Tabuns told reporters.

Progressive Conservative energy critic Vic Fedeli said Mr. Andersen told a “very convoluted story” in explaining how his agency stumbled across the documents, and called for “heads to roll.”

 

 

36,000 pages

Sept. 24, 2012

What we learned: TransCanada Corp., the Alberta energy giant that has the contract to build the power plant moved from Oakville to Eastern Ontario, will receive $210-million up front from the province for gas turbines.

 

20,000 pages

Oct. 12, 2012

What we learned: Then premier Dalton McGuinty’s office established a high-level initiative code-named Project Vapour to manage the fallout from his government’s decision to cancel the Oakville power plant.

 

600 pages

Feb. 21, 2013

What we learned: An e-mail dated Aug. 16, 2011, shows that David Livingston – appointed Mr. McGuinty’s chief of staff 10 months later – led the discussions on Project Apple, the relocation of the Oakville plant.