Toronto: The Canadian Taxpayers Federation reacted today to the provincial government's announcement of four new electricity projects. The projects include a cogeneration project, two new natural gas-fired generating plants, and a "demand response" project involving Loblaw Companies Limited (Loblaw).

According to Minister of Energy Dwight Duncan, private power companies will be building the new cogeneration and natural gas generating plants, and the electricity produced will be subject to a price floor. When electricity prices fall below the floor, the companies involved will receive a subsidy from electricity consumers.

With regard to the "demand response" project, Loblaw will increase the energy efficiency of its Ontario operations by 10 megawatts. At this morning's news conference, Minister Duncan admitted Loblaw will receive taxpayer money for this project.

"While we are pleased the government wants to involve the private sector in power generation, we are not at all pleased at how they are doing it," said CTF Ontario Director Tasha Kheiriddin. "Corporate welfare and subsidies are not principles of the free market. Why should taxpayers pay a private company like Loblaw to increase its profits by cutting its hydro consumption And why should consumers subsidize power companies when prices fall Under this plan, consumers will not benefit from lower market prices, because any savings will be offset by subsidies tacked on to their hydro bills."

In addition, the new plants will decrease the province's reliance on coal and increase its dependence on more costly natural gas, from 8 to 13% of power generating sources. As gas is generally more costly than coal, this could translate into higher prices for consumers. The Energy Minister refused to provide any estimates, saying only they are dependent on "outstanding contracts issues" and will be available "very soon."

"This announcement leaves taxpayers in the dark about the most important question: price," said Kheiriddin. "Under this plan, the cost of electricity may well increase. If the government knows the price, and isn't revealing it, that is unacceptable. And if the government doesn't know the price, how can it commit to these contracts How can it say that they are really in the best interest of taxpayers and hydro consumers "