Changebook Shell GameHands up any Ontario conservative who thinks that Tim Hudak’s energy plan is a promise Ontario citizens can trust this October 6th on election day. Speaking as a conservative, I do not trust Mr. Hudak’s plan. Ontario’s Progressive Conservative party needs a real energy plan.Recapping, here is the plan as reflected in the Party’s platform document Changebook and Mr. Hudak’s major pronouncements on the subject over the last 10 months. As it addresses energy, Changebook should be renamed Shell Game Book, that children’s game where you hide a pea under a bunch of moving shells.

(hands demonstrating a shell game)

Changebook promises to get “home energy bills under control”. How? Mr. Hudak will remove the HST from home hydro and heating fuel bills. This will only result in shifting tax cost to others, or to the deficit. Some ratepayer groups will get lower rates but that relief will all be at the expense of others. There is one shell game.

Shell games like this pollute Ontario energy history. Look for example at Premier McGuinty’s hopelessly empty-minded Ontario Clean Energy Benefit. There’s a shell game. He cuts 10% from household bills and tacks it onto the deficit for our kids to pay. Some folks support shifting power costs to the deficit, but they tend to be Liberal voters.

Changebook promises to remove the Debt Retirement Charge from home hydro bills. The public accounts of Ontario don’t detail where the DRC revenues that ratepayers have sent into the Ontario government over the years have gone, but the accounts are clear that the Ontario government’s official electricity debt left from the old Ontario Hydro, serviced in part by the DRC, is today over $14 billion. Until that debt is discharged, it would be irresponsible to grant any targeted group of Ontario consumers a break on the Debt Retirement Charge. Everyone else will get hit by either higher payment rates or longer payment terms if government waives the charge for some. Mr. Hudak’s DRC relief is another shell game.

Voters should ask, what conservative principles guided the party in promising these shell games with public finances? As we look in horror at the damage caused by deficit financing in places like Greece and the U.S., why would we want to do more of the same with Ontario’s power system?

Mr. Hudak promises is to eliminate the Ontario Power Authority. The grounds? Ontario Power Authority has “burned through $300 million in 6 years.” Hang on! All of the OPA’s spending has been approved by the OEB. In a big speech last October to the energy industry, Mr. Hudak committed to strengthening the OEB! I personally got sucked right in by that speech. Finally, I thought, a politician who will take a concrete step to reduce politicization in energy. But, you don’t strengthen an agency by abrogating its decisions. Mr. Hudak’s commitment to strong, independent public utility regulation was obviously not something he is prepared to stick with.

The truth is that the OPA has been doing what it has been told to do by McGuinty. There are a lot of good people at the OPA with much needed and highly specialized skills. Some experts at the OPA have excellent job prospects at comparable compensation levels. We need those skills right now to figure out how to operate the new, vastly more complex power system Mr. McGuinty has unwittingly created. Ontario needs a restructuring plan for the sector before we start ripping up agencies. If the OPA is torn up, its work will just be transferred to other agencies. Tearing up the OPA is an institutional shell game.

The platform says the Conservatives will “unplug” the smart meter “tax machines”. I hope every understands that the term “unplug” is used metaphorically. Literally unplugging your meter would be risky, illegal and leave you in the dark. The smart meter is no more of a tax machine than the meter it replaces.

Cutting through the careless rhetoric, what the Conservative platform tries to say is that households will have a choice of time of use or flat rates. Reverting from time of use back to flat rates is another shell game, that is worse than zero sum economically. Neither of TOU or flat rates will help us maximize efficiency. Consumers in Ontario have invested in the order of two billion dollars in smart meters, devices that are vastly more capable than the primitive meters they replaced. Stranding the smart metering investment is a losing strategy. With the smart meter investment sunk, we should be moving to utilize their real capabilities to aid conservation and enhance power system reliability by transitioning into real time pricing. Implementing a smarter pricing system that can earn the public’s acceptance will require consultation, creativity and fair dealing.

The only element of the current Conservative commitment to Ontario voters that stands on some logical foundation is the commitment to kill McGuinty’s Feed in Tariff (FIT) program. The FIT programs is anti competitive, absurdly inefficient, corrosive of community harmony in regions subject to unwelcome wind development, and outrageously contemptuous of consumers. The FIT program has made Ontario an international magnet for carpet baggers seeking to jump on the gravy train while McGuinty is still pouring the ratepayer’s champagne. As just one example of the FIT programs’ irresponsible waste: Quebec is buying wind power for 8.7 cents/kWh while McGuinty is forcing consumers to pay 13.5 cents/kWh. McGuinty is sticking with his buying spree while Ontario is spilling vast amounts of power generation. Even if McGuinty wins in October, the FIT program in its current form is toast.

Mr. Hudak is right to promise to kill the FIT but what will he replace it with? The only clue Hudak provides is in this sentence “We will invest in an affordable clean energy supply mix…gas, hydro and nuclear.” Who is this we? Throughout Changebook, it says we will cut the HST and we will cut the DRC. Clearly, we means government. Mr. Hudak obviously favours forcing Ontario taxpayers to be involuntary investors in Crown gas, hydro and nuclear plants enterprises. Mr. Hudak could have said that there will be an independent public review to figure out what assets will best serve consumers. He could have said that Conservatives favour competitive auctions to buy what consumers need at the best overall cost and risk. Instead, Mr. Hudak committed to a massive renationalization of the power sector.

Anybody who wants more nationalization in industry already has the option to vote NDP.

Again, what conservative principles guided the party to commit to renationalization of the power sector?

Premier McGuinty’s electricity legacy includes unprecedented rate increases and politicization of decision making, growing conflict in rural areas hosting wind power development, massive impacts on taxpayers and the deficit, a continuation of excessive compensation within the power sector, and demoralized public agencies. In some cases, his power reforms have been guided by out and out lies — like the claim that wind power is replacing coal power. During the heat wave of July 2011, coal replaced wind. In other cases, McGuinty has flipflopped so much, he keeps contradicting himself. In 2003, McGuinty campaigned to maintain taxpayer subsidies to power rates introduced by arguably Ontario’s worst ever Conservative premier Ontario, Ernie Eves. Then in 2004, McGuinty’s new line was that ratepayers had to pay the full cost of power and that we had to get the deficit under control. Only wingnuts opposed that rate increase. Now, caught by surprise at the costs of his green energy commitments, he has reverted to the Eves deficit-financing model. In energy, you can only believe McGuinty’s actions, not his words.

Voters concerned about relentless double digit rate increases year after year or other damaging developments in the power system will be looking to the Progressive Conservative party. Many people, even some with concerns about McGuinty’s irresponsible power plans, will think twice about voting for the PC energy shell game.

Ontario’s conservatives may win the election on October, despite the obvious lack of care and thought on the subject energy policy reflected in Shell Game Book.

If you think that Ontario conservatives need some better ideas for what to do starting the day after the election, I invite you to join the debate at www.tomadamsenergy.com.