Guelph’s high electricity bills can be traced back to the losses of the Community Energy Initiative

By Gerry Barker

November 22, 2016

If I was running Burger King, Premier Kathleen Wynne told 850 Liberal delegates just told a whopper! I made a mistake she told delegates to the Liberal Convention over the high cost of power to the people.

I don’t know about you, but our two-person household received a Guelph Hydro bill that was $95.83 less than the previous month. The adjustment over the month before and the month before that when our monthly bill averaged $340 including water. How about you? Did your hydro bill take a sudden drop in power costs?

Water is a small amount of the bill considering the city would not let us water for five months.

There’s something fishy here. Are the smart meters over billing?

How about all that money that Guelph Hydro sent over to Guelph Municipal Holdings Inc (GMHI) at the bequest of the former mayor, chair of GMHI with a majority of her supporters basking in her environmental radiance.

That all changed following the 2014 election when it was discovered that GMHI had bungled a scheme under the umbrella of the Community Energy Initiative to create alternative energy systems downtown and at the Hanlon Business Park. The plan called District Energy natural gas-fired Node pumps was to power a co-generation thermal hot and cold water system to a handful of nearby downtown buildings including the Sleeman Centre and RiverRun Theatres. GMHI, through its partners, entered contracts to supply 10 megawatts of power from each of the Nodes annually

I have written a lot about this financial debacle, one that the citizens of Guelph are going to be paying off for years to come. Suffice to say the costs are running close to $107 million and counting. There is little return to support the investment.

It’s sad that the city administration is not leveling with the people who pay the bills.

Instead, it is now scurrying to cover it up. Here’s how they are doing it.

Where does the city find $106 million? Well, Premier Wynne in her mea culpa explanation to the Liberals says they are going to seek efficiencies by streamlining the 70 small municipally owned public utilities in Ontario.

That’s Wynne-speak for amalgamate or else. Remember when former mayor Karen Farbridge tried to sell off Guelph Hydro to a consortium of Hamilton and St. Catharine utilities? The people said “no” and it was one of the few times her loyal caucus turned on her proposal.

Now we have the Premier trying to unwind ten years of Liberal mismanagement of electric power in Ontario by forcing amalgamation of Guelph Hydro with larger distribution utilities.

Sure, there is a lot of money in it for the city. The estimated book value of the city-owned power distribution system is around $170 million.

The city has already brought Guelph Hydro into city control as just another department controlled by city council. They did this by wrapping up GMHI in which the former mayor folded Guelph Hydro into GMHI with its enormous debt.

Then, the city absorbed the $69 million impaired investment from GMHI, posting it as an asset. That money came from a Guelph Hydro subsidiary.

Are you starting to get the picture?

The so-called asset now sitting on the city books cannot be supported by GMHI that has no financial ability to even pay the interest. The original loan was $65 million. In the 2015 annual financial report, it had grown to $69 million.

The problem is that asset sitting on the city books has no underlying hard assets, particularly now that the city has it sitting on its books.

What a dilemma! Along comes the provincial government to the rescue, led by a premier with a 14 per cent approval rating. Her so-called streamlining of the 70 municipally owned electric distribution centres would see Guelph Hydro disappear when pushed into a Hydro distribution consortium.

Fasten your seat belts! This selling of Guelph Hydro is going to be presented to a council that has squandered millions of poorly planned and executed projects. The loss of this $170 million facility may suit the administration in the short term but the fallout will affect the ability of life in Guelph for years to come.

The irony of this is that two members of the present council were on the GMHI board for four years and never said a word about the money flying out the door to create an environmental nirvana.

Last, but not least, the former Chief Administrative Officer of the city, Ann Pappert, was the Chief Administrative Officer of GMHI for four years. So, ask yourself, why did city council, in closed-session Dec. 10, award her with a retroactive pay increase of more than $18,624, a vacation pay-out of another $18,580, plus a 2 per cent increase that took her 2015 pay to $257,248?

Where is the oversight? Where are the checks and balances to prevent the abuse of the public trust?

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4 Comments

Filed under Between the Lines

4 responses to “Guelph’s high electricity bills can be traced back to the losses of the Community Energy Initiative

  1. Joe Black

    Lies , deceit, fraud , corruption.

  2. Do you remember when the liberals under Dalton McGuinty dreamed up a power plant that fizzled and was cancelled after $500 million in engineering costs? Every time I look at my hydro bill, I remember. McGuinty promptly announced he would not run again and I truly believed Wynne was designed by the Liberal Party as a scape goat to take the sin out into the desert. I knew our hydro bills would eventually rise to pay for it. Well, well, well – now we find Wynne and Farbridge (by no means scape goats) teamed up to but us into a deeper sinkhole. At our expense. Compare your gas bill to your hydro bill and see that Gerry is spot on.

  3. Sue

    Maybe your bill went down because you weren’t using air conditioning in October? I track usage rather than price – more accurate record of consumption.

  4. Jerry

    It is like the gas plants that was decommissioned,Wynne said that she was sorry(the stupid public forgave and forgot and gave her a majority mandate in the last election)I think she is hoping for the same.Get this out front of the election by a few years,the public will forgive and forgot and she will get another win.But hopefully the public will not forget and remember and boot her out of office.The same in Guelph,remember the councilors still on council who voted for this mess and also the ones that wanted to extend this mess and remove them from power.Clean sweep and fresh ideas are needed.

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