POLITICS

North Bay company warns Liberal green energy policy driving it out of business

03/06/2012 04:21 EST | Updated 05/06/2012 05:12 EDT
TORONTO - One of the largest employers in North Bay said Tuesday it could be forced out of business by the Ontario government's green energy policies, which are driving up electricity bills.

The problem is the so-called global adjustment fee, charged to hydro consumers to offset the premiums the Ontario government contracted to pay producers of wind and solar power.

Those guaranteed rates are much higher than most consumers actually pay for electricity.

Fabrene Incorporated, which employs 250 workers in North Bay manufacturing polyethylene fabrics for industrial use, saw its global adjustment fee jump from $100,000 to $1 million in just four years, said vice-president John Spencer.

"In 2007, it hit five per cent of my bill ... and increased seven-fold in the next four years and is now 42 per cent of my bill," Spencer said in an interview.

"It has to stop, and if it doesn't stop soon, companies like mine just will not exist. We’ll just close down. We cannot pay that kind of power bill and stay in business."

Fabrene is owned by Polymer Group International, which operates in 20 countries, and soaring hydro bills fuelled by green-energy subsidies make it hard to persuade them to spend more in Ontario, Spencer said.

"If you want to talk to a guy that actually goes to a boardroom and argues and tries to earn investment in Ontario, I'm the guy," he said.

"Power is tied with my No. 3 cost (after raw materials and labour), and I bet you I’m not too different from many manufacturers in Ontario, what few of us are left."

In the legislature, the Progressive Conservatives said the Liberals' "failed energy plan is bankrupting Ontario businesses" and costing the province thousands of jobs.

"In the first year, Ontario employers paid $700 million in global adjustment," said Opposition energy critic Vic Fedeli.

"The auditor general told us they will pay $8 billion in global adjustment in 2014."

Energy Minister Chris Bentley declined to comment directly on Fabrene, and instead launched a spirited defence of the Liberals' decision to shut down coal-fired electricity generation and try to develop a green energy-based economy in Ontario.

"Ontario families and businesses were paying the real cost of burning that coal, $4 billion, and all the thousands of illnesses that hurt productivity and hurt families," Bentley told the legislature.

The government has promised to complete a review of the subsidies paid for wind and solar power by the end of the month, and is expected to lower the green energy premiums.

Fabrene is not an anti-green company, Spencer insisted, but said having the global adjustment fee on top of seeing Ontario pay neighbouring U.S. states to take its excess power, is a "lethal" combination.

"The excess energy that’s being generated in Ontario is being sold at a loss to the very people I’m competing with. I’m funding my competition," he said.

"Green energy is a noble cause, but the execution of that cause is causing some pain."

Spencer compared the growing global adjust fee for electricity to a runaway freight train.

"Certainly I can say within five years I’ll be unemployed if this isn’t stopped."