Auditor general blasts Kathleen Wynne’s ‘Fair Hydro Plan’ – Toronto – CBC News

Auditor general blasts Kathleen Wynne’s ‘Fair Hydro Plan’Liberals ‘improperly’ keeping hydro plan debt off government’s books, says special report by Bonnie LysykBy Mike Crawley, CBC News Posted: Oct 17, 2017 10:46 AM ET Last Updated: Oct 17, 2017 11:30 AM ETOntario Auditor General Bonnie Lysyk released a special report Tuesday on the Wynne government’s move to cut hydro bills by 25 per cent, with an election around the corner. (Frank Gunn/Canadian Press)669 shares Facebook Twitter Reddit Google Share EmailRelated StoriesRevealed: Document shows average monthly Ontario hydro bill will top $200 in 10 yearsHydro price cuts by Ontario Liberals go under auditor’s microscope todayWill Kathleen Wynne’s hydro plan save her re-election hopes?Why your hydro bill is so high, and why it’ll be hard for premier to cut itLack of oversight blamed for high hydro costs: auditor generalThe Wynne government created a “needlessly complex” scheme to pay for its hydro rate cuts without showing the costs on its own bottom line, Ontario’s auditor general said in a critical report released Tuesday. Auditor General Bonnie Lysyk investigated the financing of what the Ontario Liberals call the “Fair Hydro Plan.” The plan has reduced the average household electricity bill in the province by 25 per cent from the peak in the summer of 2016.Lysyk said the government is “improperly” accounting for the $26 billion in debt the province is taking on to cut hydro bills in the short term.  The $26 billion is being borrowed through Ontario Power Generation, so will not appear on the province’s books. Electricity customers will pay off that debt through rate increases spread out over the next 30 years. Ontario auditor examines Liberal plan to cut hydro billsThe government chose that financing scheme “to keep deficits and an increase in net debt from showing up on the Province’s books,” Lysyk said in the report, tabled Tuesday morning in the Legislature.  “The government created a needlessly complex accounting / financing structure for the electricity rate reduction in order to avoid showing a deficit or an increase in net debt,” writes Lysyk . The auditor says the plan could also result in Ontarians paying “up to $4 billion more than necessary” in interest. That’s because OPG will be required to pay higher interest rates than the province would if the government took on the debt directly.Rate cut won’t last: LysykThe hydro rate cuts will not last, Lysyk found.  “From 2028 on, ratepayers will be charged more than the actual cost of the electricity being produced in order to pay back the borrowings,” she said in the report.”The improper accounting also inappropriately transfers long-term accountability for significantly higher electricity bills to future governments,” writes Lysyk. “Future governments will have to explain to ratepayers why electricity rates charged in 2028 and beyond exceed the actual cost of electricity.” How your hydro bill will rise over the next decadeThe Wynne government is already trying to dismiss all of the auditor’s findings. “The government of Ontario does not agree with the assertions and conclusions expressed in the report,” said an official response issued together with the auditor’s report.Ontario’s financial accountability officer has already described the scheme as a “complicated accounting structure” that will increase gross debt by approximately $26 billion by 2027-28, but not show any impact on the government’s books.  

Source: Auditor general blasts Kathleen Wynne’s ‘Fair Hydro Plan’ – Toronto – CBC News

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