The Progressive Conservatives are calling on police to investigate $260 million in “ineligible expenses” — including staff car washes and scuba gear — billed by nine power plants, as revealed in last week’s auditor general report.

These are “abuses so egregious that a second look by law enforcement is only prudent,” Tory MPP and energy critic Todd Smith says in a one-page letter to OPP Commissioner Vince Hawkes.

“I have serious concerns about what appeared to be a broad and systemic abuse of the energy system and, ultimately, the hard-earned money of ratepayers,” Smith added.

“I have no faith in the Liberal government’s ability to punish the companies responsible.”

Previous requests for police investigations from opposition parties at Queen’s Park have resulted in charges against two of Premier Kathleen Wynne’s Liberal organizers in the 2015 Sudbury byelection — although a judge dismissed that case in October.

There were also criminal counts in regard to allegedly deleted documents after two gas-fired power plants were scrapped by then-premier Dalton McGuinty before the 2011 election.

A verdict in that trial, involving two former key McGuinty aides who have pleaded not guilty, is due Jan. 19. McGuinty was not under investigation and co-operated with police.

The hard-hitting report by auditor general Bonnie Lysyk blamed lax oversight of electricity companies by the province’s Independent Electricity System Operator (IESO) for the questionable expenses getting through.

Once they were discovered through internal audits, the agency responsible for meeting Ontario’s daily electricity needs issued orders for repayment of $169 million against nine power plants.

One company, which operates the Goreway natural gas-fired power plant in Brampton, was fined $10 million and directed to repay $100 million in a 2015 order.

While the Goreway case was revealed in an Ontario Energy Board probe, the IESO says it cannot name the other companies in question because of privacy rules.

The Conservatives and NDP have been calling on the Liberal government to force full repayment of the monies, arguing $92 million of the $260 million cited by Lysyk as outstanding and should be returned to hydro ratepayers.

But IESO vice-president Terry Young has said the $260 million number is “extreme,” with $200 million being a more “reasonable” interpretation.

“We aren’t going to be taking further action,” he told the Star last week, adding the eligibility of some expenses was in dispute, and the agency determined that the costs of litigation were not worth the financial risk.

Police were not called about the ineligible expenses because the IESO has been acting under regulations it established for companies supplying power to the grid in Ontario’s electricity marketplace, Young has said.

But Smith, who represents the Belleville-area riding of Prince Edward-Hastings, said the internal rules don’t go far enough.

“Abuses by the insiders at these electricity companies, including at the publicly owned Ontario Power Generation, appear to be flagrant, systemic and repeated,” his letter to the OPP said.

Loading... Loading... Loading... Loading... Loading... Loading...

Smith noted the Liberal government has been warned by the Ontario Energy Board since 2009 about the possibility for companies to exploit the expense rules.

He also said the Wynne administration, which is up for re-election next June 7, “deliberately swept them (the expense abuses) under the rug.”

In her report, Lysyk detailed a number of ways ineligible expenses were being reimbursed.

“The ISEO was not reviewing all cost claims submitted by generators before paying,” she wrote.

“Generators claimed thousands of dollars 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.”

One unidentified company claimed $175,000 for parkas and coveralls over a two-year period. Goreway’s claims included $300,000 for landscaping, $6.5 million for gas to fuel a steam turbine that does not consume any gas and another $17 million for which it had no supporting records, according to the auditor general’s report.

Under the rules, power companies called on to produce electricity on short notice to meet peak demand from consumers are entitled to claim only the “incremental costs” involved in being on standby, Lysyk said.

Another way power companies got around the rules was to shut down their equipment while on standby, only to restart again within two hours.

“This allowed generators to submit their equipment start-up costs,” Lysyk’s report said. “Running their equipment continuously would have saved money, but generators could not have then submitted the additional start-up costs for reimbursement.”

A spokesperson for Energy Minister Glenn Thibeault said risks of questionable expenses being reimbursed have been “corrected” because the IESO has now changed its procedures so that eligible costs must be pre-approved.

Read more about: