TORONTO -- The Ontario Power Authority announced Monday it had signed a contract with TransCanada Corp. (TSX:TRP) to own and operate a gas-fired generating station near Kingston that was originally planned for the Greater Toronto Area.

The 900-megawatt facility will be located near Ontario Power Generation's Lennox Generating Station property in Napanee instead of Oakville, a move the Liberal government said would cost taxpayers $40 million.

However, the Progressive Conservatives and New Democrats accuse the government of hiding the true cost of cancelling the Oakville power plant and another one in nearby Mississauga.

"It's an ongoing story of Liberal waste and Liberal self-interest and a reminder to people that there's a good reason to have the legislature open: we need to be able to dig into this," said NDP energy critic Peter Tabuns.

"And we certainly shouldn't be accepting of a the Liberals' $40-million figure."

The opposition parties estimate the combined figure for the two cancelled power plants in Liberal ridings is around $1 billion, not the $230 million the Liberals admit.

The Tories and NDP say they would have found out the real cost if Premier Dalton McGuinty had not prorogued the legislature just hours before public hearings into the failed projects were to begin.

"Independent estimates suggest the cost to cancel and relocate this gas plant ranges anywhere from $800 million to $1.3 billion, the bulk of which will be passed on to Ontario ratepayers," said PC energy critic Vic Fedeli.

"When I was sitting at committee, I witnessed the Liberals fight tooth and nail to keep the auditor general from looking into the Oakville cancellation. Now we know why."

The Tories also wanted to know why Ontario was building a new power plant just two kilometres from the "under-utilized" Lennox generating station owned by OPG.

"That 2,000-megawatt facility runs at just five per cent of its capacity," said Fedeli.

"How does this help address the power needs in the southwest GTA where the power was deemed to be needed in the first place?"

The cancellation of the two gas plants -- which the opposition parties called a "Liberal seat saver program" -- led to a rare contempt of Parliament motion against Energy Minister Chris Bentley over the government's initial refusal to release documents on the projects, which it was eventually forced to do by the Speaker.

However, despite more than 56,000 documents being released, the Tories and NDP still insist they hadn't been given all the information they were entitled to have.

A legislative committee dominated by the opposition parties was about to start public hearings into the costs of the gas plants, and the contempt motion, when McGuinty surprised everyone Oct. 15 by proroguing the legislature and announcing his resignation.

"Dalton McGuinty knew he was in deep trouble, that the more that came out about what was really going on here the worse things would look for him because in fact they behaved improperly," said Tabuns.

The Mississauga gas plant, construction of which was well underway when the Liberals cancelled it two weeks before the Oct. 6, 2011 election, will be relocated to the Sarnia area.

Construction had not started on the Oakville gas plant when the Liberals decided to cancel it after well-funded local opponents brought in famed environmental activist Erin Brokovich to speak against the project.

TransCanada said Monday that the new Napanee plant will create about 600 construction jobs as well as long-term employment for about 25 people with $4 million in annual salaries and benefits. The plant will operate under a 20-year power purchase arrangement with the OPA.

"There needs to be alignment of all stakeholders before you kind of move forward, and I think we found that in Napanee," TransCanada CEO Russ Girling said Monday.

"We have a location that is far more acceptable to all stakeholders than Oakville," Girling said.

TransCanada currently operates the 683-MW Halton Hills Generating Station, has a 50 per cent ownership in the 550-MW Portlands Energy Centre in Toronto and has agreed to purchase nine Ontario solar plants that would produce 86 MW of clean energy. It also owns a large portion of the Bruce Power nuclear facility -- 49 per cent of Bruce A and 32 per cent of Bruce B.