Ben Chin and Gerry Butts: we’ve seen this show before

After watching and reading the former Attorney General’s testimony before the House of Commons Justice Committee, Yogi Berra’s famous quote “it’s deja vu all over again” immediately came to mind. The former AG, Jody Wilson-Raybould (JWR) in the 30 minutes of her opening remarks mentioned two names: Ben Chin (seven times) and Gerry Butts (five times).

For the benefit of those who didn’t follow Ontario politics during the McGuinty/Wynne era, it’s worth pointing out both Gerry Butts and Ben Chin played significant roles in Ontario, especially the ill-fated electricity file.

Butts is credited as the mastermind behind Dalton McGuinty’s election as Ontario’s Premier: Butts was, according to the Toronto Star, “the man they call ‘the brains behind the operation’ and policy architect of the Liberal government since 2003.”

Butts left the McGuinty government in mid-2008, after he and the Ontario Liberal team set the stage for the Green Energy Act, by pushing for renewable wind and solar projects and to close coal plants. Butts went off to lead the WWF (World Wildlife Fund) for four years before joining Justin Trudeau as his political advisor. As we now know, Butts was the director leading the “drama teacher” Justin Trudeau, to a win as Canada’s Prime Minister.

Ben Chin, engaged as a “political advisor” to Dalton McGuinty, was the McGuinty candidate chosen to run against the NDP’s Peter Tabuns in a byelection in 2006. Chin lost, but returned as a “senior advisor” to Premier McGuinty’s office where he again worked with Gerry Butts. Chin left for the private sector and a short while later was hired back as Vice President Communications for the OPA (Ontario Power Authority). The OPA was the creation of Dwight Duncan when he was McGuinty’s Minister of Energy and became the Crown corporation to enact the myriad of things mired in the Green Energy & Green Economy Act (GEA).

Chin later became embroiled in the “gas plant” scandal as the Premier’s principal contact with the negotiating team dealing with TransCanada et al on compensation issues related to the cancellation. Ontario’s ratepayers know how that turned out! While Chin occupied his position with the OPA, Tom Adams and I were investigating the gas plant scandal by reviewing thousands of documents. Tom and I uncovered interesting details in exchanges between him and a political staffer in the Energy Ministry headed up, at that time, by Brad Duguid.

The following reveals some of our findings in an article I wrote about the “smart grid” and a Brad Duguid directive.

Co-incidentally (noted by Tom Adams), the Duguid directive is dated the same day as the e-mail exchange between Alicia Johnston (formerly a senior political staffer for Energy Minister Brad Duguid, later promoted to the Premier’s Office) and Ben Chin (a senior Ontario Power Authority executive).  That e-mail exchange contained Ms Johnston’s suggestion to engage Tyler Hamilton, a contributor to Toronto Star, as an “expert” to counter the Adams and Gallant duo who “are killing me”; Chin agreed. Shortly after, Hamilton received a contract from the Independent Electricity System Operator (IESO) for a report on the smart grid.

The spin emanating from the Prime Minister’s Office (PMO) and the Prime Minister himself is not all that different than what we were hearing several years ago during the gas plant scandals days. The following is one such quote from the mouth of the former Premier of Ontario, Dalton McGuinty when queried as to the costs of the gas plants move: “I am waiting for the day when somebody says, ‘Actually it’s $400 trillion,’ because, as I say, ‘If Elvis says it, I’ve got to print it.’ What was the latest number? $1.3 billion? Do I hear 1.7? When are we going to get to 2.8? It’s kind of an interesting game . . . In total we are talking a $230-­million cost.”

Those two unelected individuals (Butts and Chin) originally involved in the Ontario electricity muddle now find themselves named as two (out of eleven) of the bullies pressuring JWR to grant SNC-Lavalin a DPA (deferred prosecution agreement). In the case of the GEA and the gas plant scandal it took much longer to surface in the public eye than the current SNC/JWR scandal so it would appear the Chin/Butts team has lost some of the spin abilities they displayed in the past. Not to usurp of malign the mainstream media, the following are a few excerpts from the JWR testimony related to Ben Chin and Gerald (Gerry) Butts.

The Chin former AG dialogue:

“Two days later, on September the sixth, one of the first communications about the DPA was received from outside of my department. Ben Chin, Minister Morneau’s chief of staff, emailed my chief of staff and they arranged to talk. He wanted to talk about SNC and what we could do, if anything, to address this. He said to her, my chief, that if they don’t get a DPA, they will leave Montreal and it’s the Quebec election right now so we can’t have that happen. He said that they have a big meeting coming up on Tuesday and that this bad news may go public.

And:

“A follow-up conversation between Ben Chin and a member of my staff, Francois Giroux, occurred on Sept. 11.Mr. Chin said that SNC had been informed that the PPS — or by the PPSC — that it cannot enter into a DPA, and Ben again detailed the reasons why they were told that they were not getting a DPA. Mr. Chin also noted that SNC legal counsel, Frank Iacobucci, and further detailed what the terms were that SNC was prepared to agree to, stating that they viewed this as part of a negotiation.” And:

To be clear, up to this point, I had not been directly contacted by the prime minister, officials in the prime minister’s office or the Privy Council Office about this matter. With the exception of Mr. Chin’s discussions, the focus of communications had been internal to the Department of Justice.”

And:

On Sept. 20, my chief of staff had phone calls with Mr. Chin and Justin To, both members of the minister of finance’s office, about DPAs and SNC.”

The Butts former AG dialogue:

“On Dec. 5, 2018, I met with Gerry Butts. We had both sought out this meeting. I wanted just to speak about a number of things, including bringing up SNC and the barrage of people hounding me and my staff. Towards the end of our meeting, which was in the Chateau Laurier, I raised how I needed everybody to stop talking to me about SNC, as I had made up my mind and the engagements were inappropriate. Gerry then took over the conversation and said how we need a solution on the SNC stuff. He said I needed to find a solution. I said no and I referenced the preliminary inquiry and the judicial review. I said further that I gave the clerk the only appropriate solution that could have happened and that was the letter idea that was not taken up. Gerry talked to me about how the statute was a statute passed by Harper and that he does not like the law. I said something like that is the law that we have.”

And:

“On Dec. 18, 2018, my chief of staff was urgently summoned to a meeting with Gerry Butts and Katie Telford to discuss SNC. They wanted to know where I — me — am at in terms of finding a solution. They told her that they felt like the issue is getting worse and that I was not doing anything. They referenced a possible call with the prime minister and the clerk the next day.”

And the foregoing led to this:

“I will now read to you a transcript of the most relevant sections of a text conversation between my chief of staff and I almost immediately after that meeting.

Jessica: Basically, they want a solution, nothing new. They want external counsel retained to give you an opinion on whether you can review the DPP’s decision here and whether you should, in this case. I told them that would be interference. Gerry said: “Jess, there is no solution here that does not involve some interference.” At least they are finally being honest about what they’re asking you to do. Don’t care about the PPSC’s independence. Katie was like, “We don’t want to debate legalities anymore.” They keep being like, we aren’t lawyers, but there has to be some solution here. MOJAG — I text — so where were things left, Jessica? Jessica: So unclear. I said, what? Of course, let you know about the conversation, and they said that they were going to kick the tires with a few people on this tonight. The clerk was waiting outside when I left, but they said that they want to set up a call between you and the prime minister and the clerk tomorrow. I said that of course, you’d be happy to speak to your boss. They seem quite keen on the idea of you retaining an ex-Supreme Court of Canada judge to get advice on this. Katie Telford thinks it gives us cover in the business community and the legal community and that it would allow the prime minister to say we were doing something. She was like, “If Jody is nervous, we would, of course, line up all kinds of people to write op-eds saying that what she is doing is proper.”

The foregoing highlights the unmitigated gall of two unelected individuals who, for whatever reason, see themselves as “king makers” much as they did for the McGuinty government in Ontario. Presumably they reasoned, it worked once so we will try it again.

The voters and believers of democracy in Canada should be grateful for the intestinal fortitude displayed by Jody Wilson-Raybould!

PARKER GALLANT

P.S. If the reader would like to see the damage done to Ontario in respect to the electricity sector my 2012 writings over 10 Chapters referenced as “Electricity and the Liberals Hansard History” Chapter 1 through 10 can be found on the WCO website: http://www.windconcernsontario.ca/?s=ELECTRICITY+AND+THE+LIBERALS+HANSARD+HISTORY%2C+CHAPTER

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Ontario ratepayers gored at Goreway

What’s up with the big consumer rip-off Mike Crawley has ably reported on? (ref: http://www.cbc.ca/news/canada/toronto/goreway-power-station-investigation-1.4433061)

The report that Crawley relies up on was issued by a secondary watchdog agency within Ontario’s power system called the Market Surveillance Panel (MSP). The MSP reports to the OEB and relies on a research department within the IESO.

Here is the report: https://www.oeb.ca/sites/default/files/MSP_Report_Goreway_201709.pdf

As Crawley notes, the report explains in detail how Ontario ratepayers have been getting ripped off by a large gas-fired power generator located near Bramalea called Goreway Station Partnership (Goreway).

The current owners are the Japanese firms Toyota Tsusho Corporation and JERA Co. Inc., each with 50%.

The dollar amounts of the estimated ripoff are large. The MSP estimates that over a three-year period starting when the plant went online in June 2009, Goreway was paid at least $89 million more than could be justified. Some secret amount plus a $10 million fine was paid by Goreway over the course of subsequent investigations. In addition, in a parallel investigation the MSP found that “the Panel believes that a substantial portion of the $11.2 million in Ramping CMSC payments received by Goreway during shut-down over the course of the Investigation Period was the result of gaming.”

In addition, in another parallel investigation the MSP found that Goreway had benefitted from approximately $5.6 million in what the panel called “anomalous top-up payments” under a payment program called the Day Ahead Commitment Process that were “unwarranted”.

More troubling than the dollar amounts of the particular Goreway example, the investigation has pointed to vulnerabilities in the power situation that make it likely that other related ripoffs have occurred.

Goreway is not the only example. Gaming of those CMSC payments has proven to be a persistent problem for consumers, with both generators and large industrial loads exploiting gaps in the system to capture excess payments.

As noted by the MSP in a December 2016 report, the MSP has completed other investigations prior to Goreway that found gaming to have occurred. The first one concerned a gas-fired generating station located near Sarnia, Greenfield Energy Centre. Another investigation identified two dispatchable loads both owned by Abitibi-Bowater. Power importers and exporters have also been found to be gaming the system. (https://www.oeb.ca/oeb/_Documents/MSP/MSP_CMSC_Report_201612.pdf)

A key problem that has made the power system vulnerable to gaming like that pursued by Goreway is a flaw in Ontario’s market design arising from decisions taken in 1999 to maintain Ontario’s long-standing practice of pricing power equally for consumer irrespective of where they take power off the Ontario grid. (I voted against the uniform price market design bullshit which requires the 2-schedule system in favour of nodal pricing.)

The problem with this concept is that transmission constraints that are inherent to a grid like Ontario’s mean that increments or decrements of power injected or withdrawn from the grid do not have equivalent value at all locations. To accommodate the reality of transmission constraints, the IESO operates a two-schedule market. Under this workaround, consumers are billed on the basis of a theoretical unconstrained market plus top-up payments, whereas generators and dispatchable loads that are required to operate outside of the parameters of that unconstrained market in order to manage constraints get paid various incremental amounts, primarily Congestion Management Settlement Credits, often called CMSC payments. Other top-up payments available to generators are Generator Cost Guarantee (GCG) program and the Day Ahead Commitment Process
(DACP), both of which the MCP found Goreway gamed.

The MSP has warned for years about the market design flaws that Goreway
exploited:

“The Panel has, on more than one occasion, recommended that Ramping CMSC paid during shutdown be eliminated…Proposed changes to the rules that govern Ramping CMSC during shut-down have been brought forward by the IESO from time to time, and been defeated. In May, 2013, the IESO launched a further stakeholder engagement that included the issue of eliminating Ramping CMSC during shut-down. Goreway made numerous submissions on the issue, first opposing its inclusion in the
process at all, then questioning its materiality and suggesting that the Panel’s 2011 Monitoring Document had adequately dealt with any problem…After several postponements, the Market Rule amendment took effect in December 2016.”

The new rule appears vulnerable to similar abuses as the old rule.

On the topic of the RT-GCG :

“Among other things, the Panel has estimated that payments for O&M have exceeded a quarter of a billion dollars since 2010, with little or no apparent incremental reliability benefit…The Panel
acknowledges that the IESO is considering a longer-term solution in the form of an enhanced intra-day unit commitment program that would replace the RT-GCG program. However, by the IESO’s own admission that solution is many years away and it remains unclear to the Panel why changes to the program that have the potential to save millions in costs should not be made immediately. Goreway stands as a clear example of how generators are able to exploit the GCG regime and of how difficult and time-consuming it is to address. The Panel is concerned that the same situation remains in place today.”

The IESO Board of Directors has some serious explaining to do to justify why these problems have gone unsolved for so long.

The basic chronology of events also indicates that something rotten is up at the OEB:

The MSP initiated various gaming investigations of Goreway in 2011 and 2012.

The MSP found the gaming started in 2009, immediately after the plant started operations.

The MSP report was complete as of December 2016, but MSP chairman’s cover letter is dated Oct. 2. What? The chair of the MSP is a very well respected energy lawyer. It doesn’t seem reasonable to me that he would sit on his own report. Could the OEB have ordered a revised date on the cover letter to avoid blame for
sitting on the report?

The OEB didn’t release the report until November. What’s that
about?

Parker Gallant and Tom Adams

Day of Judgment on the gas plant scandal: Parker Gallant and Tom Adams

Posted on The Financial Post website today here

The trial of two aides of former Ontario premier Dalton McGuinty is likely to lay bare some inner workings behind the politicized management of Ontario’s power system over the past 10 years

On Monday, the criminal trial of David Livingston and Laura Miller, who served former Ontario premier Dalton McGuinty as chief of staff and deputy chief of staff respectively, convenes in Toronto. They face charges of breach of trust and mischief in relation to the alleged destruction of government files dealing with power plants originally contracted for the Greater Toronto Area. The trial is sure to attract media attention, particularly since another trial related to alleged Election Act violations by prominent Ontario Liberals — Pat Sorbara, Premier Kathleen Wynne’s former chief of staff, and Liberal fundraiser Gerry Lougheed — is going on at the same time.

Read the entire article here

You’re paying a tax you don’t even know about: the water rental fee

And, it’s going up. And up.

Sir Adam Beck generation station: take a good look--you're "renting" the water
Sir Adam Beck generation station: take a good look–you’re “renting” the water

December 21, 2016

A neighbour and good friend who farms in Prince Edward County kindly provided a copy of a recent issue of the Farmers Forum newspaper and pointed out an excellent article written by Angela Dorie, an agricultural writer and Jersey cattle farmer.  The article highlighted the “water rental fee”* hidden in the electricity line on our bills to pay for the water used to generate electricity.  Dorie only realized the fee was there when journalist Paul Bliss of CTV brought it to light during a National News broadcast.

I recently wrote article on the fuel tax, suggesting a reduction of it was a way to offer relief to climbing electricity prices, but I didn’t examine how much the “water fuel tax” has risen over the past several years, or how much it has contributed to the province’s revenue.

As it turned out, in 2015 the water fuel tax was $345 million for the generation of 30.4 terawatts (TWh) and represented a cost to ratepayers that amounted to $11.35 cents per megawatt (MWh) or 1.14 cents per kilowatt hour of electricity generated. While the current government didn’t institute the tax, they have significantly raised it over the years.  Back in 2002 the tax was $116 million for the 34.3 TWh generated or $3.38/MWh and 0.34 cents/kWh so it is now 3.3 times what it was the year before the Liberals gained power.

                                                         Water fuel tax:  $2.7 billion and climbing

According to the Ministry of Finance the “water rental charge rate is fixed at 9.5% of a station’s gross revenue from annual generation.”  Reviewing OPG’s financial statements for the past 10 years (2006 to 2015) one can see the fuel tax totaled $2.735 billion.  In 2015 the fuel tax cost the average ratepayer household approximately $70.

It appears that when Dalton McGuinty was premier, he not only burdened us with the “health tax” he also raised electricity bills via a stealth tax which many of us have only just become aware of. Premier Wynne is now suggesting transparency may come to our electricity bills by endorsing the appearance on our bills of the Global Adjustment.   In the current year the GA appears headed to a record $12 billion or about 8.8 cents per kWh based on anticipated consumption of 137 TWh.

One has to wonder how many other taxes and fees are hidden within our electricity bills that will come to light if we actually get an explanation of the GA that is truthful and fully transparent!

Excerpt from the CTV news story:

For decades, the provincial government has been charging for every litre of water flowing through its own power turbines at dams to produce electricity. The tax includes water surging through Niagara Falls.

“It’s effectively a water rental,” independent energy advisor Tom Adams told CTV’s Paul Bliss.

The government charges Ontario Power Generation for the water it uses. Those expenses are passed on from the company to taxpayers.