Electricity is governed by the laws of physics. Government is bound by the rules of accounting.

But political power and electrical power have one thing in common: They follow the path of least resistance.

Now, Ontario’s auditor general is trying to bend both to her will. Ahead of the next election, Bonnie Lysyk is fighting another rearguard action against the Liberal plan to curb hydro rates.

The auditor made headlines this week by accusing the government of short-circuiting the accounting rules with complex financial manoeuvres that could add $4 billion in borrowing costs over 30 years. Oddly, though, Lysyk doesn’t quibble with their plan to cut hydro rates by 25 per cent — despite her mandate to seek value for money — possibly because it’s far too popular with voters.

I’ve argued before that it’s an expedient shell game that mortgages our future by refinancing power projects over a longer amortization term. But all major parties keep promising cheap electricity today (for higher rates tomorrow), so perhaps the auditor is wiser than me by staying silent on the overall strategy.

Instead, her quibble is over tactics — that the Liberals are borrowing the money through Ontario Power Generation (OPG), their wholly-owned electrical utility, instead of carrying it on the government’s own balance sheet. And while the auditor bristles at this description, at root it’s an arcane accounting dispute — though she is surely setting the stage for a broader political dispute that could affect the coming campaign.

It’s true that the Liberals were loath to add billions of fresh debt to bankroll this hydro rebate, because they had promised in the last campaign to eliminate the budget deficit by this year (which they did). Better to bury the borrowings in their OPG subsidiary, claim a balanced budget, and cast themselves as credible stewards of the province’s finances.

This wouldn’t be the first government to rely on creative financial engineering to restructure our electricity infrastructure and engineering costs. Ontario’s consolidated balance sheet has always required a decoding ring, and the auditor is right to question its complexity — even if her answers offer no greater clarity.

She faults the Liberals for offloading the borrowing on a subsidiary, and then using creative (but legal) accounting techniques to count future “regulated” revenues as an upcoming asset. Lysyk likens that to treating your credit card debt as an asset.

That’s a peculiarly misleading analogy for the auditor to make. No, you don’t count your own credit card debt as an asset, but the bank surely does — it’s an account receivable. And a regulated revenue stream is eminently reliable cash flow.

The Liberals argue that power projects have historically remained on the books of power producers like OPG. The difference, of course, is that the old Ontario Hydro once generated all our power, before it was dismembered and downsized (it’s a pecuniary irony that OPG is being asked to clean up the mess from the stealth privatization of the energy sector).

The last time Lysyk attacked the government’s deficit calculations, an outside panel of experts rejected her arguments — because not even an auditor can make a surplus disappear from a balance sheet. There is no permanent arbiter for auditors, but Lysyk is no longer the last word on accounting disputes — merely one of many voices, right or wrong. Expect that voice to grow louder next year when she formally assesses the 2018-19 spring budget — and once again challenges Liberal claims of deficit elimination.

The conventional narrative frames this as a political clash pitting our fearless auditor against feckless Liberal politicians. In fact, her fight is with senior public servants, the provincial comptroller, treasury board staff, and outside accounting firms — all of whom describe it as a “professional disagreement” over accounting standards.

Most of these experts, who are governed by their own professional code of conduct, gave their seal of approval to the government’s books — rightly or wrongly. Lysyk countered that they are cooking the books — and demanded their internal correspondence in search of dissenters.

Without providing details, the auditor points ominously to emails (unreleased, unidentified and unquantified) from some bureaucrats questioning the government’s plans — as if this is the ultimate proof point for her point of view. Was she expecting unanimity?

Interesting but irrelevant, until you consider this fun footnote: While the auditor was demanding confidential emails from public servants who give private counsel, she flatly rejected an Access to Information request filed this year by my colleague, Robert Benzie, for her office’s sometimes testy correspondence with bureaucrats. The response? An Access to Information request demanding to know Benzie’s identity (no secrets here — he readily waived the automatic confidentiality of the process). The auditor still refused to release any correspondence.

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So much for publicly accepted principles of Access to Information, transparency and reciprocity. Some watchdogs don’t like being watched.

Martin Regg Cohn’s political column appears Tuesday, Thursday and Saturday. mcohn@thestar.ca, Twitter: @reggcohn