Summary
Industry information shows that insurance coverage is the greatest operating cost for hydro-electric generating stations – more than all other operating costs combined. The only explanation we can think of is to cover the legal and settlement costs for drownings and other injuries to the public.
Detail
AECOM is multinational engineering services company with over 87,000 employees, and more than 450 offices in more than 60 countries. They have 53 offices in Canada alone.
The Ontario Ministry of Natural Resources requested AECOM Canada Ltd. to assess the economic impact of 41 proposed hydro-electric generating stations in Ontario. The result was this report.
While most of these 41 proposed projects were never developed, we have provided some analysis; of the report in this article, and of industry response to drownings in this article. But what we wanted to highlight for this article are the operating costs presented on page 5. This shows that insurance for hydro-electric generating stations costs more than all other operating costs combined, including the generating station’s costs for; staff, maintenance, water use, land use, and administration.
As hydro-electric generating stations operate unattended and are automatically monitored for mechanical and other problems, there are very low risks to employees. Other conventional risks such as fire and theft would also be quite low. So it appears the reason for such high insurance costs is the insurance company’s costs of defending or settling lawsuits resulting from drownings and other personal injuries due to the operation of hydro-electric generating stations.
So one of the uses of the $100,000,000 subsidy from Ontarians to this private developer for power that isn’t needed would be to pay for their insurance to protect them from losses due to their drowning unsuspecting tourists.