McGuinty Liberals fear green-deal backlash

Source: Toronto Star
MPPs worry they'll face voter wrath over higher power costs from Samsung accord

There is mounting anger within the Liberal caucus over Premier Dalton McGuinty's decision to award a $7 billion green-energy deal to a South Korean consortium, sources told the Star.

MPPs, who were advised on a conference call that the controversial accord with Samsung C&T and Korea Electric Power Corp. (KEPCO) would be proceeding, complain they had no input on an arrangement.

The deal, signed Thursday, will increase ratepayers' hydro bills and critics say it will undermine domestic renewable energy producers.

"This thing was just presented as a fait accompli," said one Liberal privy to the 40-minute call last Tuesday, which was chaired by two senior McGuinty aides.

"It's the same goddamned thing as on the HST," the MPP said, referring to the way the 13 per cent harmonized sales tax was foisted upon the Liberal caucus last March after McGuinty and Prime Minister Stephen Harper had agreed to meld the 8 per cent provincial sales tax with the 5 per cent federal GST.

"The sense around the place is that it's just one-man rule. The morale in caucus is lower than a gutter snake in a puddle on a back country road."

At issue is the fact that the South Korean consortium will receive an "economic development adder" – an incentive over and above the generous premium already paid to green-energy producers.

That subsidy, announced Thursday, will be worth $437 million over the 25-year life of the deal to build wind turbines and solar equipment in Ontario. The Liberals say it will create 1,440 manufacturing positions at four factories and lead to a total of 16,000 new jobs.

But Liberal MPPs are concerned they will face the wrath of constituents because the cost of the deal will be paid through higher hydro bills – about $1.60 per household a year.

"People are cranked up enough about the HST being on energy bills (when it takes effect July 1) and we're worried (the opposition Progressive Conservatives and New Democrats) will spin this as yet another increase on your energy bill – even if it's only $1.60," another Liberal said.

"It just drives (constituents) crazy; it's a little bit here and a little bit there."

Even Liberals who support the premier's initiative as a shrewd move in difficult economic times are unhappy with the way the accord was rolled out.

"We just want to give him some small-p political advice because we're only 20 months away from the (election) campaign," said a Liberal.

"People were pissed off that there was no chance to discuss this. Zero. We didn't get to talk about the pros and the cons. (The premier's office) basically said: `Here are the talking points; end of story.'"

The Star has previously revealed that several senior ministers advised McGuinty against the Samsung/KEPCO deal at a rancorous Oct. 28 cabinet meeting, where George Smitherman, who was then energy and infrastructure minister, defended it.

Smitherman – who negotiated the contract in South Korea and made it the cornerstone of the Liberals' Green Energy Act pledge to create 50,000 green-collar jobs over the next three years – has since left provincial politics to run for mayor of Toronto.

Along with concerned hydro ratepayers, some MPPs are already hearing from domestic green-energy producers shut out of what Progressive Conservative Leader Tim Hudak has dubbed "a sweetheart deal."

"People are ticked. They want to know why Ontario companies couldn't get this," a Liberal said.

"We're afraid it's going to blow up in our faces – just like the HST."

But in Ottawa on Friday, McGuinty defended the setting aside of scarce transmission capacity for the South Korean consortium – ahead of Ontario renewable energy producers vying for the same access to the grid.

"I was thinking last night that it's a wonderful thing that people here in Ontario are fighting for access to our feed-in tariff program. I haven't heard of such interest in California or Texas or Michigan," the premier said.

"This is the place in North America where you want to be to build new clean, green, renewable energy."