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After pointed prodding by the Ontario Energy Board (OEB), the IESO audited the program and found that of the $600 million paid out, $260 million was for ineligible claims.

“Generators claimed thousands of dollars annually for staff car washes, carpet cleaning, road repairs, landscaping, scuba gear and raccoon traps which have nothing to do with running power equipment on standby,” the auditor’s report says. “One generator claimed about $175,000 for coveralls and parks at one facility over a two-year period.”

About $168 million in ineligible claims has been recouped.

Overall, Ontarians could have saved millions on their hydro bills if the IESO had followed through on recommendations made to it by the OEB, the auditor found.

Because generators were shutting down their equipment, and restarting it in two hours to take advantage of the Standby Cost Recovery Program, hydro ratepayers paid $19 million more in extra electricity costs in the summer of 2010, the OEB reported.

The OEB estimates hydro customers could save about $30 million a year if the program was revamped to eliminate coverage for some maintenance and operating costs.

The Lost Profit Recovery Program, another compensation program for electricity market players, is also vulnerable to exploitation, the auditor found, with one generator claiming $11 million for non-existent ‘lost profits.’

“Both programs have evolved over the years, and costs have been constrained substantially,” Energy Minister Glenn Thibeault said in a statement. “Abuses within the system are completely unacceptable. That’s why they have been investigated, and where wrongdoing was present, costs have been recovered and returned to ratepayers.”

aartuso@postmedia.com