Ontario's cancelled gas plants cost could exceed earlier $1.1-billion estimate

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The Ontario Liberals' decision to cancel two gas-fired power plants could cost the province even more than the $1.1-billion previously estimated, a senior civil servant told a legislative committee probing the matter.

What's more, the government long knew that the cancellation would be costlier than it was claiming publicly.

Earlier this month, the Auditor-General reported that the price tag for killing one of the plants, in Oakville, was between $675-million and $815-million. Added to the previously-disclosed cost of pulling the plug on a facility in Mississauga, the total tab would be as high as $1.09-billion.

But Serge Imbrogno, the top public servant in the province's energy department, said Tuesday those costs are only estimates. The actual cost could wind up more or less than that figure.

"Future costs could be lower or higher," he said. "That's correct."

Up until last fall, the Liberals insisted the price of cancelling the Oakville plant and moving it to Napanee would be just $40-million – the total cost of work that had already been done in Oakville.

But, Mr. Imbrogno testified, the government had been briefed long before that that there would be many more costs.

"There was probably an understanding that it could be more, we didn't know the exact amount," he said. "We would have briefed the minister."

Those additional costs ultimately soared into the hundreds of millions. They included the price of shipping gas to Napanee and sending electricity back to the GTA, where it was needed.

The Liberals pointed to several savings in the new Napanee contract, which were designed to offset these costs. However, those savings turned out to be just a fraction of the additional cost to the province's ratepayers.

In later testimony, Municipal Affairs Minister Linda Jeffrey said she did not know what the cancellation would cost.

"This was an issue I was certainly aware of, but it was not my file," she said. "I knew there were complex negotiations going forward, but I had no idea how much it was going to be."

She also said that a government decision to hold back releasing documents related to the cancellations – a move that prompted the opposition to accuse the Liberals of a cover-up – was made by former premier Dalton McGuinty and then-energy minister Chris Bentley. To her knowledge, it was not discussed with the rest of cabinet.

Ms. Jeffrey was one of several ministers who signed off on a mandate to negotiate a settlement over the Oakville plant, but she said she signed off only on the mandate for the sunk costs negotiation.