TORONTO - Premier Dalton McGuinty was put on the defensive Wednesday, trying to explain why Ontario homeowners face rising electricity bills while the province pays neighbours to take its excess power.

Ontario makes a tidy profit from selling power to other provinces and American states, even if it sometimes has to pay neighbours to take its surplus power, said McGuinty.

"In 2010 we exported $300 million worth of electricity (and) we had to give away $6 million (worth)," he said. "We're up $294 million, just so we put this in context and perspective."

Word that Ontario paid $1.46 million to Quebec and the U.S. to rid itself of surplus power Jan. 1, a day of warm temperatures and very low demand, had the Opposition decrying Liberal energy policies as "a mess."

"He's over-billing seniors and families by increasing (electricity) rates 75 per cent, and then subsidizing exports of power to Quebec, New York, New Jersey," said Progressive Conservative Leader Tim Hudak.

"These jurisdictions are paying less for Ontario power than what Ontario families are being charged."

The real problem, said Hudak, is the Liberal government signed lucrative contracts for wind-generated power that must be accepted onto the provincial grid, even when the electricity isn't needed.

"Dalton McGuinty has signed agreements to take expensive power with no choice, it's forced onto the system," said Hudak.

"This is another indication of the complete mess that Dalton McGuinty has made of the hydro policy in our province."

Given a choice between too much electricity and too little to meet demand, having a little more than required is better, said McGuinty.

Just two days before New Year's Day, Ontario was paid to take excess electricity from other jurisdictions, said Energy Minister Brad Duguid.

"On Dec. 30 the same occurred but in reverse, and we were paid to take somebody else's energy," said Duguid.

"(It's) part of a reciprocal agreement that makes for a more effective system overall with neighbouring jurisdictions."

Nuclear power provides about half of the province's electricity, but it's too difficult and costly to turn off when power isn't needed.

The wind turbines could be turned off and on much more easily, but the province is required to buy all of the power the wind farms produce, even when it isn't needed.

"Every bit of wind that is generated will be bought and paid for by the Ontario consumer, every bit of it, because of the contacts with those providers," complained Opposition energy critic John Yakabuski.

The government and the agency charged with overseeing Ontario's power grid are looking at ways to better manage surplus electricity from green energy sources such as wind and solar, said Duguid.

"The Independent Electricity System Operator is looking at how do we better power down our system and how do we do it now with renewables into the mix," he said.

"One of the alternatives is to look at ways to power down wind (generation)."

Another bone of contention with the Opposition is the so-called global adjustment on electricity bills, which the government prefers to call the provincial benefit.

It is the difference between what the province pays for power on long-term energy contracts and the market price of electricity, and is now between three to four cents per kilowatt hour.

The global adjustment isn't charged on exported power, so traders in North American energy markets are buying Ontario power for much less than Ontario ratepayers, and selling it to Quebec or the U.S. for much higher rates.

"The problem is the incompetence and ineptitude of a government that would design a system that works that way," said Yakabuski.

The government says charging the global adjustment for exports would reduce the province's ability to export electricity.