When Energy Minister Bob Chiarelli suggested this week that Ontarians have to get used to paying more for power, the opposition Progressive Conservatives pounced – citing it as the latest evidence that a government that has mismanaged the energy file is insensitive to ratepayers.
It’s an issue on which Tim Hudak’s party has relentlessly hammered the governing Liberals for the past couple of years, and understandably so. Skyrocketing bills have placed a strain both on homeowners and on businesses, particularly in the province’s hard-hit manufacturing sector. While many of the increases have been the result of overdue infrastructure investment, the government has invited blame upon itself with an ill-considered green-energy strategy – the costs of which are only hitting now – and a scandal around gas-plant relocations.
But it is one thing to lament current rates, and another to promise price relief. And if Mr. Hudak is planning to do the latter in an election campaign likely to happen next spring, it could be especially difficult to take him seriously because of a curious policy decision on his part.
Responding to the revelation last month that the government is scrapping plans to buy new nuclear reactors, the safest approach for the Tories would have been to grudgingly agree with the decision. Even many nuclear-friendly members of the energy sector concede that a decline in consumer demand had negated the need for a new build; Mr. Hudak could have blamed that lack of demand on Liberal economic mismanagement, and moved on. Instead, the Tories have insisted that if they form a government, they will recommit the province to the investment. By their account, that’s because they’re confident that their economic policies would generate enough growth that more power would be needed after all.
If that seems unduly optimistic, and most economists would probably tell you it is, Mr. Hudak may also have other reasons for continuing to pledge new reactors. He is trying to project a more responsible approach to energy policy than the highly politicized decision-making of the past few years, and consistency could help with that. Many of his party’s supporters have a positive association with nuclear power and there are thousands of jobs in the troubled nuclear sector to be protected.
But there is no getting around it: While often well worth it in the long run, nuclear is very expensive to build. A conservative estimate would put the cost of two new reactors north of $10-billion, and it’s worth remembering that such projects have a history of cost overruns.
It’s not as though most of that sum could be counterbalanced by pulling funding away from other projects to which the Liberals are committed, and which are part of the reason Mr. Chiarelli will project in next week’s long-term energy plan that nuclear’s share of the energy supply mix will shrink from 56 per cent to somewhere in the forties. It would be prohibitively expensive to cancel most remaining contracts for new wind and solar power; the same goes for the two relocated gas plants being built in Sarnia and Napanee.
In other words, Mr. Hudak may be handing the Liberals an easy response to his attacks. If he accuses Kathleen Wynne during a campaign of inflicting unaffordable rates on Ontarians, she might well respond that prices would go up much more under the Tories because they’re the ones who want to spend tens of billions of dollars on nuclear power the province doesn’t need.
That would be an oversimplification, since related costs probably wouldn’t hit bills until some years down the road. But as Mr. Hudak knows well, arguments about energy policy have a tendency to get oversimplified.
This particular argument is not one the Liberals could actually win; energy policy will not be a net positive for them with voters in the foreseeable future. But the Tories are giving them more of a chance than they should have, based on their recent record, to make it a wash.