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Evolving Costs The majority of the costs and savings associated with relocating the Oakville plant will occur in the future. As the Auditor General stated, the current estimate will not be the final cost, which will only be known when more information becomes available. OPA CEO Colin Andersen put the same qualification on the OPAs $310 million estimate when he testified before the Justice Committee in April. It typically takes 12 to 18 months to develop cost estimates when competitively procuring a gas plant. Procurement Process for the Oakville Plant The OPA carried out a competitive procurement process for the Oakville Generating Station, a process that was overseen by a third-party fairness advisor. The Auditor General noted that the OPA told bidders that proposals would be evaluated based on the municipal requirements in place at the start of the procurement process, a process that required bidders, not the OPA, to identify sites and obtain all necessary permits and approvals. With a process already underway, the OPA felt locating a power plant in the Southwest GTA was valuable from both a system and ratepayer perspective and as such wanted to be fair to proponents, maintain a healthy roster of bidders and be able to affirm the integrity of the process. Throughout the procurement and contracting process, the OPA provided the provincial government with off ramps at which times the process could have been stopped prior to awarding the contract to TransCanada Energy (TCE). Contract with TCE A third- party review of the MOU and the subsequent contract for the Napanee plant by Deloitte LLP found that the financial elements and outcome for TCE are both largely consistent with the original Oakville contract and that overall the deal is commercially reasonable. The Auditor General identified $170 million in potential benefits to TCE. The Auditor General also identified $162 million in savings related to starting contract payments later. This delay means TCE must wait longer to start receiving a return on its investment. Location-Related Costs The increased ratepayer costs for the Napanee plant are largely related to the plants location. In announcing the cancellation of the Oakville plant, the Minister of Energy at the time said the plant would not be relocated in the GTA. Location-related costs include accelerating replacement transmission in the Southwest GTA, line losses that result from transmitting power from Napanee to where it is needed elsewhere in the province, higher costs for connecting the Napanee plant to the grid and delivering gas to Napanee, which is further from the natural gas storage hub near Sarnia than the Oakville plant would have been. Savings Associated with Delaying Purchase of Replacement power The Oakville plant was under contract to produce power until 2033. The Napanee plant has a contract until 2038. If the Oakville plant had been built, replacement power would have had to been purchased starting in 2033 at a cost higher than what will be paid for power at the Napanee plant. The OPA estimated having this less expensive source of power available at Napanee between 2033 to 2038 results in a savings of $50 million. The Auditor General did not attribute any savings for the cost of replacement power during this period because she felt it too far into the future to estimate. The Auditor General did estimate the costs for gas management and delivery over this time period. -30Media contact: Kristin Jenkins 416-969-6007/416-302-9717