Ontario: paying for power not delivered, paying for wasted power, and paying to help with skyrocketing bills

In short, just paying and paying. Parker Gallant reviews the first five months in the electricity sector in Ontario, and asks what new Energy Minister Thibeault will do about the impact of the province’s renewable energy policy.

Energy Minister Glenn Thibeault: what will he do about paying for power we don't need, paying for power we don't get, and paying for the economic impact of constant increases?
Energy Minister Glenn Thibeault: what will he do about paying for power we don’t need, paying for power we don’t get, and paying for the economic impact of constant increases?

 

The Independent Electric System Operator (IESO) a few days ago released the 18 Month Outlook; sifting through the pages one finds some alarming comments such as this one: “The need for greater flexibility is related to our current supply mix. Forecast uncertainty from increased quantities of VG [variable generation] is compounded by demand forecast uncertainty.”

More alarming is this quote: “The need for additional flexibility increases as the VG fleet grows.

“Variable generation” is of course a reference chiefly to wind and solar which is causing IESO grid management grief; the situation may well lead to blackouts or brownouts as more power generation in Ontario is variable.

Coincidentally, IESO also released a quarterly publication called “A progress report on contracted electricity supply” which highlights that IESO had, as of March 31, 2016, contracted for 5,814 MW of wind generation and 2,490 MW of solar generation. In fact, 1,434 MW of wind and 334 MW of solar were classified as “Under Development”.

Immediately following, IESO released the May 2016 Monthly Market Report which contained some disturbing facts such as disclosure that the “Weighted Average” for the month for Class B ratepayers was $133.81 per megawatt hour (MWh), or 13.4 cents/kWh (excluding the Debt Retirement charge). That is 20.7% above the average price of 11.1 cents/kWh levied by the OEB as of May 1, 2016.

What that means, is we are heading for another significant rate increase commencing November 1, 2015.

With this in mind let’s look at some events in the first five months of 2016.

The Global Adjustment climbed by over $1.7 billion from the same period in 2015 with Class A clients (large industry) seeing an increase of $310 million or 88%, and Class B ratepayers a $1.435 billion increase (43,3%). That happened even though consumption was virtually flat!

Another hit was related to curtailed wind (paid at an estimated $120/MWh) and, according to Scott Luft’s conservative estimates, was 730,000 MWh for the five months of 2016. The cost to ratepayers of almost $88 million is about 44% of the estimated $200 million annual cost for the OESP (Ontario Electricity Support Program) which kicked in January 1, 2016. That means, Ontario ratepayers are paying mainly large foreign-owned wind generating companies to cut back on power production at the same time as we pay to support as many as 571,000 households suffering from “energy poverty”!   The irony? Intermittent power generation from wind, produced out-of-sync with demand, is causing households to pay for power not delivered and also pay for power needed by low-income households!

In the first five months of 2016 the average intertie (exports minus imports) was 6.570 million MWh; Ontario generated revenue of $68.4 million from the average HOEP (hourly Ontario electricity price) sale price.   The ratepayers in Ontario, however, were obliged to pick up the Global Adjustment costs of $674 million (average GA cost per MWh was $102.61), meaning it cost almost $150.00 per “average” household just to support surplus export sales.

While all this was going on, OPG was also spilling hydro (1.7 million MWh1) as they report in their 1st Quarter results, Bruce Nuclear was steaming off nuclear power, and wind power generators were being paid an average of $133/MWh to produce out of sync with demand intermittent power that is now apparently causing IESO grief in ensuring they can manage the grid.

The waste and expense: does new Energy Minister Glenn Thibeault know that his predecessor instructed the IESO to acquire another 600 MW of wind in the next procurement phase?

One might ask, will Energy Minister Thibeault have the intestinal fortitude to cancel that directive and save Ontarians from paying for power that is clearly not needed?

© Parker Gallant

June 24, 2016

 

 

  1. OPG were paid for spilling the 1.7 TWh of hydro which could have supplied almost all of the low-income households with free power for those five months.

North Stormont hopes Wynne government will ‘see the light’ on wind power contracts

More transparency, more respect for municipal governments and communities needed, says council in voting on a resolution for change to the province’s procurement process

NoMeansNo_FB (2)

Cornwall Standard-Freeholder, June 22, 2016

By Lois Ann Baker

BERWICK – North Stormont council has taken a step towards asking the government for tougher requirements for future wind turbine projects.

At its June 7 council meeting, a resolution was brought forward by Amy Doyle, community planner and CAO Marc Chenier with suggestions for the Independent Electricity System Operator (IESO) to consider before awarding any contracts for the large wind turbine developments.

“The resolution that was presented by Margaret Benke on behalf of the Concerned Citizens of North Stormont was a resolution that was to be presented to the IESO as part of their public engagement,” said Doyle.

The resolution contains six suggestions for the IESO to consider when awarding its Large Renewable Procurement contracts. One such contract was awarded to EDP Renewables earlier this year for a 100,000-megawatt wind project in North Stormont.

“This is the feedback we want to give the IESO into their process,” said Doyle. “The major one that has been circulating was the mandatory requirement for support for a project. So basically the whole resolution is just a list of recommendations for the IESO and in no way does it have any bearing on the project that was approved out of the last process. This is strictly commenting on the IESO process.”

The municipality is also sharing the information with other municipalities. Chenier said between 70 and 75 other municipalities in Ontario have already passed similar resolutions calling on a mandatory requirement of municipal support – usually meaning a favourable vote by the local council.

Chenier said the resolution was specifically for the LRP II process, the next phase of renewable energy contracts. Even if a majority of municipalities request the same from the IESO, it doesn’t necessarily mean things will change.

“IESO is the governing body, but the provincial government kind of tied us up. We don’t have any say in anything in the LRP I process,” said Chenier. “We’re just asking them to reconsider their position in the LRP II process. LRP I, we don’t have any choice.

“They changed the legislation and municipalities have no say into it.”

Chenier said the municipality was trying to do as much as it can to provoke things in the LRP II process, hoping the government will “see the light” and allow municipalities to have a lot more power. Chenier said in the past, municipalities were not given much information regarding the awarding of the contracts.

“On the political side of things, it probably brought up a lot of opponents to these kinds of projects because there was no proper co-ordination of information,” he said. “Now there is more co-ordination of the information and people learn a lot more about it. That allows most municipalities to realize instead of fighting the government, they should pressure the government to make changes in the LRP II process.”

Along with the support of a community, North Stormont is also asking the rules to include an open council vote on whether it supports a project, held after the company wanting to build it holds its mandated community meeting. It would also like municipal engagement not to be associated with any municipal agreements and compensations. North Stormont is also requesting the full details of the projects be provided to the municipality and that the point scores and explanations be included in the announcement of which projects have been awarded contracts.

lbaker@postmedia.com

Read the full story here.

Wind power contract process ‘unfair’ ‘frustrating’ and undemocratic say Ontario municipalities

Mayor Higgins: Hoping for open discussion with the new Energy MInister (Photo CBC)
Mayor Higgins: Hoping for open discussion with the new Energy Minister (Photo CBC)

CBC News June 20, 2016

 

Seventy-five municipalities across Ontario are calling on the provincial government to give them more say on future wind farm projects.

Some eastern Ontario communities have declared themselves “unwilling hosts” to wind farms, only to recently have the province award contracts against their wishes.

The City of Ottawa, North Frontenac and at least 73 other municipalities want Ontario’s Independent Electrical System Operator (IESO) to “make formal municipal support a mandatory requirement in Ontario’s next round of procurement for renewable energy projects,” according to the resolution.

The provincial energy agency claims to let communities express their concerns, but that has little impact on the outcome, according to North Frontenac Mayor Ron Higgins.

“We basically don’t have any democratic right when it comes to deciding where these wind turbines go … within our municipality,” he said.

Wind Energy

75 municipalities across Ontario have endorsed a resolution that calls for increased local consultation before the next round of renewable energy projects. (Robert F. Bukaty/Associated Press)

Higgins said if given the opportunity North Frontenac would turn down all wind turbine projects, but he said some area municipalities would support them.

“We may want them, we may not want them, but if we do want them we’d like to be able to tell you where to put them,” said Higgins.

“Not right in front of a cottage door, or high on a mountain where all our cottages can see it.”

Current process ‘unfair,’ Ottawa councillor says

The current procurement process for renewable energy projects is “unfair” and “incredibly frustrating,” according to Rideau-Goulbourn ward Coun. Scott Moffatt.

Moffatt said he has no choice but to tell upset constituents “‘sorry, it’s the province, sorry, it’s the province.’ It just sounds like we’re passing the buck, but literally we have no control over these things.”

Both Higgins and Moffatt said they’re hopeful Ontario’s new energy minister, Glenn Thibeault, will be open to new discussions.

Higgins said he requested meetings with previous minister, Bob Chiarelli, three times, but that all requests were denied.

See the entire story here

 

The real cost of wind power: U.S. report

Subsidies mask the real cost of producing electricity from wind, says a recent U.S. report

The people get it: subsidies mask the true costs of wind power
The people get it: subsidies mask the true costs of wind power

The wind power lobby is currently putting forward the idea that generation of electricity from wind energy is actually dropping in cost, and is one more reason for governments to choose wind over other forms of power generation.

Not so fast: a U.S. institute has done a review of the actual costs of wind power. They include funny things like transmission, the cost of idling or spilling other forms of power generation when wind power gets first-to-the-grid rights, as in Ontario, and — amazingly–the social, environmental and health costs of wind power.

Their conclusion? “[T]he growth of wind energy in the U.S. is not the result of new technology and favourable market forces. Rather, wind energy’s rapid emergence is largely a response to general federal and state subsidies intended to boost the technology … ,” says energy Economist Robert Lyman, in a summary document.

“What seems clear, however, is that the actual cost of wind-generated electricity is higher than most published cost estimates indicate,” Lyman says.

“Mandates requiring the use of wind energy increase electricity costs for consumers, and subsidies mask the actual cost of doing so, while penalizing taxpayers.”

Read Mr Lyman’s summary document here: THE UNSEEN COSTS OF WIND

 

MEDIA: To get in touch with Mr. Lyman, please email Wind Concerns Ontario at contact@windconcernsontario.ca

Letter to PM, Minister of Health has 200 Ontario signatories

Letter to Ottawa: investigation needed
Letter to Ottawa: investigation needed

June 16, 2016

A letter from Ontario residents has gone to Prime Minister Justin Trudeau and federal Health Minister Dr Jane Philpott, asking that there be an investigation into adverse health effects reported by residents of Ontario living near wind turbines.

Signed by Barbara Ashbee of Mulmur Ontario, the letter also carried signatures of 200 Ontario citizens.

Ashbee gives examples of other investigations of an environmental health nature that are being funded by the federal government, and asks that the government consider a project related to wind turbine noise and health effects.

“The purpose of this letter is to formally request a meeting with the Minister of Health and staff to discuss compliance by the wind turbine industry with the Radiation Emitting Devices Act and wind turbine industry compliance obligations, and the need to conduct an investigation of complaints relating thereto,” Ashbee writes.

She also says that the wind turbine noise and health study completed by Health Canada did not ascertain environmental factors affecting “patient outcomes.”

See the text of the letter here: Open letter Prime Minister Trudeau industrial wind turbines June 14_2016 (3a)

75 municipalities to Wynne government: make municipal support mandatory for wind power bids

 

NorthFrontenac

NEWS RELEASE

Municipalities call on Ontario government to make municipal support mandatory for wind power bids

Plevna, June 15, 2016—

Seventy-five municipalities have now endorsed resolutions that call on Ontario’s Independent Electrical System Operator (IESO) to make formal Municipal Support a mandatory requirement in Ontario’s next round of procurement for renewable energy projects.

Mayor Ron Higgins of North Frontenac, who put forward a resolution now supported by other municipalities, says making municipal support mandatory is key to fairness in the process. “It will force proponents to seriously address local concerns when developing these proposals, rather than just going through the motions,” he says.

The IESO process allowed municipalities to express their concerns about wind power projects but that had little impact on the outcome, Higgins says. In spite of the fact that then Energy Minister Chiarelli said a contract in an unwilling community was “virtually impossible,” three of five wind power contracts were awarded in municipalities that did not support the projects proposed by developers.

The municipality of Dutton Dunwich, which also created a mandatory support motion, held a referendum on the wind power project bid there — 84 percent of residents said no. The municipality is now fighting a contract award.

Municipalities across Ontario support these resolutions, including former Energy Minister Chiarelli’s home municipality of Ottawa. Municipalities in Northern Ontario also endorse the resolution.

“Communities know what type of development is appropriate and sustainable,” says North Frontenac Mayor Higgins. “Our resolution points out that utility-scale wind power does not reduce greenhouse gas emissions or appreciably benefit the environment. In fact, in our case, it would have harmed it.”

The recent Environmental Review Tribunal decision revoking the approval for the Ostrander Point wind turbine project underscores the importance of community input into the process of awarding contracts and approving power projects. The community in Prince Edward County went through two appeal hearings and two hearings in court before succeeding in its goal of protecting the environment and endangered wildlife from a power project.

Recent feedback published by the IESO shows that the current bid process was resoundingly condemned by municipal officials and community groups for a lack of openness and transparency.

###

Contact: Mayor Ron Higgins, North Frontenac, 613-884-9736

Mandatory Municipal Support Resolution

  1. Adelaide-Metcalfe, Middlesex County
  2. Alfred & Plantagenet, Prescott-Russell County
  3. Amaranth, Dufferin County
  4. Asphodel-Norwood. Peterborough County
  5. Algonquin Highlands, Haliburton County
  6. Arran-Elderslie, Bruce County
  7. Ashfield-Colborne-Wawanosh, Huron County
  8. Bayham, Elgin County
  9. Bluewater, Huron
  10. Brockton, Bruce
  11. Brooke-Alvinston, Lambton
  12. Bruce Mines, Algoma District
  13. Cavan-Monaghan, Peterborough
  14. Central Elgin, Elgin
  15. Central Huron, Huron
  16. Chamberlain, Timiskaming District
  17. Chatsworth, Grey County
  18. Clarington, Region of Durham
  19. Dutton-Dunwich, Elgin
  20. East Ferris, Nippissing District
  21. Elgin, County of
  22. Essex, Essex County
  23. Enniskillen, Lambton County
  24. Gananoque, Leeds and Grenville County
  25. Georgian Bluffs, Grey
  26. Grey Highlands, Grey
  27. Havelock-Belmont-Methuen, Peterborough
  28. Hornepayne, Algoma
  29. Howick, Huron
  30. Huron, County of
  31. Huron-Kinloss, Bruce
  32. Kawartha Lakes, City of
  33. Killarney, Sudbury District
  34. Kincardine, Bruce
  35. Lakeshore, Essex
  36. Lambton, County of
  37. LaSalle, Essex
  38. Laurentian Hills, Renfrew County
  39. Leeds and the Thousand Island, Leeds and Grenville
  40. Lennox & Addington, County of
  41. Mapleton, Wellington
  42. Magnetawan, Parry Sound District
  43. Marathon, Thunder Bay District
  44. McDougall, Parry Sound
  45. McNabb Braeside, Renfrew County
  46. Meaford
  47. Newbury, Middlesex
  48. Mono, Dufferin County
  49. Morris-Turnberry, Huron
  50. Nairn and Hyman, Sudbury District
  51. North Frontenac, Frontenac County
  52. North Glengarry, Stormont, Dundas and Glengarry
  53. North Grenville, Leeds and Grenville
  54. North Perth, Perth
  55. North Stormont, Stormont, Dundas & Glengarry
  56. Northern Bruce Peninsula, Bruce
  57. Ottawa, City of
  58. Peterborough, County of
  59. Plympton-Wyoming, Lambton
  60. Prescott-Russell, United Counties of
  61. Prince Edward, County of
  62. Rainy River, Rainy River District
  63. Ramara, Simcoe County
  64. South Bruce Peninsula, Bruce
  65. Southgate, Grey
  66. Tillsonburg, Oxford County
  67. Trent Lakes, Peterborough
  68. Tudor and Cashel, Hastings County
  69. Tweed, Hastings
  70. Val Rita-Harty, Cochrane District
  71. Warwick, Lambton
  72. Wainfleet, Niagara Region
  73. West Grey, Grey
  74. West Lincoln, Niagara
  75. Zorra, Oxford

Ottawa to IESO: municipal support must be mandatory for wind power bids

Municipal approval key to sustainable development, Canada’s capital city tells the Wynne government

Ottawa: how about WE get to say what happens?
Ottawa: how about WE get to say what happens?

The City of Ottawa, Ontario’s second largest city and Canada’s capital, has sent a letter to the Minister of Energy requesting a return of local land-use planning powers removed under the Green Energy Act.

Ottawa is a city but it also has a large rural area, which makes it a “draw” for wind power developers, Councillor Scott Moffatt wrote in the letter. Moffatt is Chair of the city’s Agricultural and Rural Affairs Committee, and the representative for the rural Rideau-Goulbourn ward in the city.

The City is not opposed to renewable energy projects, the letter states, but because wind power projects have “significant implications” for planning, Ottawa believes their approval should “go through the existing planning framework that takes Ottawa’s Official Plan, community sustainability, and input of the community into consideration.”

Under the current Large Renewable Procurement process, Ottawa’s letter says, municipalities’ role is “consultative” only, and without “decision-making authority.”

The letter was sent to the former Energy Minister Bob Chiarelli, whose own riding is in Ottawa.

In 2013, the City supported a Not A Willing Host declaration by residents faced with a 20-megawatt wind power project that would have been close to hundreds of homes and a school.

See the letter from Ottawa here: OttawaLetter2016-05-30-minister-chiarelli-wind-power

The Ottawa resolution, passed unanimously at Council in May reads as follows. Ottawa is among 75 municipalities now requesting the IESO and the Ontario government to make municipal support a mandatory requirement for new wind power bids.

Ask the Province of Ontario to make the necessary legislative and/or regulatory changes to provide municipalities with a substantive and meaningful role in siting wind power projects and that the “Municipal Support Resolution” becomes a mandatory requirement in the IESO (Independent Electricity System Operator) process.

Ostrander Point decision: key changes to wind power process say lawyers

Blanding turtle as depicted by Jim Coyle of the Toronto Star: changing history
Blanding turtle as depicted by Jim Coyle and Paul Watson of the Toronto Star: changing history

The decision of the Environmental Review Tribunal to revoke the approval of a wind power generation project at Ostrander Point in Prince Edward County is key, says a leading law firm, because it provides insight into how the Tribunal will now exercise its powers.

In an opinion published on the Osler Hoskin Harcourt LLP website, lawyers Jack Koop, Richard Wong and others say that the Tribunal can now step into the Ministry of the Environment’s Director to approve a remedy to environmental challenges but, more important, “it may consider the general purpose of the EPA, the general purpose of REAs, the public interest under section 47.5 of the EPA, and the principles set out in the Ministry’s Statements of Environmental Values (including the ecosystem approach and the precautionary principle).”

The Precautionary Principle, which had been deemed irrelevant to appeals of wind power projects is now back in play, says Osler Hoskin Harcourt: “With the Ostrander decision, the Tribunal now appears to be saying that once the more stringent harm test has been met, and the Tribunal moves to a consideration of ‘remedy’, it has licence to consider a much broader range of factors, including the precautionary principle. This raises the question of whether the decision has opened a backdoor for the Tribunal to relax the stringent harm test imposed by the statute.”

This is a highly significant finding as it has long been surmised that the test imposed under the regulations for wind power project approvals was virtually impossible to meet. In fact, as lawyer for the industry trade association CanWEA or the Canadian Wind Energy Association said in court in January, 2014, “this [the Ostrander Point decision in favour of the Appellant] was never supposed to happen.”

Read the full opinion here but it appears the little, endangered, smiling Blanding’s turtle will go down in history for more than just being in the way of an inappropriate power development.

Ontario’s power giveaway: why rates keep going up and up and up

The Ontario experience of just two hours recently illustrates why electricity rates keep climbing, says Parker Gallant

More wind power not needed
More wind power not needed

 The early morning hours of June 12th demonstrated clearly why Ontario’s electricity rates keep climbing.  The two hours commencing at 5 AM had IESO forecasting wind power generation of over 5,100 megawatt hours (MWh), but actual generation for the two hours was less than 600 MWh —  IESO curtailed most of what they forecasted.

Ontario’s electricity ratepayers picked up the cost of the 4,800 MWh of curtailed generation, and also paid the cost for steaming off about 2,400 MW of nuclear power.

IESO doesn’t disclose how much hydro was spilled and paid for, but they did report we also exported almost 4,800 MW to Michigan, New York and Quebec in those two hours. And we paid them to take it! The hourly Ontario energy price was negative (-$4/81 & -$4.85) for those two hours.

Taken together, the curtailed wind generation, steamed off nuclear and the inability to collect the Global Adjustment for the exports added about $1.4 million in costs for just two hours.

On the demand side Ontario consumed less than 22,000 MWh for those two hours and the generators of those MWh will be paid about $2.6 million, raising the total costs to Ontario ratepayers to $4 million for the 22 million kWh.  If you calculate the cost per kWh it works out to over 18 cents/kWh.

The 18 cents/kWh is 104.5% higher than the current “off-peak” rate of 8.7 cents/kWh ratepayers will be charged for those two hours. The cost for those two hours (and all the other similar hours) will filter through the system and cause our rates to increase on November 1, 2016 when the Ontario Energy Board resets prices for the following six months.

So tell us again, why did (now former) Energy Minister Bob Chiarelli told IESO to contract for another 600 MW of utility-scale wind power?

The Ontario government seems determined to ensure Ontario’s residential electricity rates soon surpass both Alaska and Hawaii, so Ontario can claim to have the highest rates in all of North America.

© Parker Gallant

June 13, 2016

 

The views expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.

Wind power exec confirms: contracts to miss key performance date

"I'm a problem?"
“I’m a problem?”

The top executive for Gilead Power, the firm that was seeking to develop Ostrander Point in Prince Edward County into a wind power generation project, confirms what Wind Concerns Ontario has known for some time: there are projects in Ontario that are approaching, or have even passed, their key contract date to be supplying power to the grid.

The Wynne government has the option of now cancelling these contracts.

In an interview with the Picton Gazette, interim Gilead president Dan Hardie said the company is now “in limbo” with the decision by the Environmental Review Tribunal going against the project, and the “drop-dead” date approaching. (Actually, Wind Concerns Ontario’s information is that the key contract date was May 12, 2016.)

“We were supposed to be up and running by a certain date this year,” Hardie told the Gazette. “We are running out of time and that’s due to the Blanding [sic] turtle problem that we had.”

Asked if the ERT decision could mean the end of the company, Hardie replied, “Probably.”

According to WCO information, the cost to the government of getting out of the Ostrander Point contract would be $420,000 at most to terminate.

FIT Contract status: estimated from FIT contract source documents

Project 20 Year Cost Termination Cost (Max) Status/ Estimated

Key Contract Dates

Nigig/Henley Inlet, Parry Sound $2,057 M $1.0 M Pre-submission – Default Date =   Sep 24, 2015
Trout Creek, Parry Sound $68.6 M $420,000 Default Date = Nov 6, 2015
Fairview, Clearview $126.2 M $436,000 Default Date = Nov 6, 2015
Skyway 126, Grey Highlands $68.6 M $420,000 Default Date = Nov 6, 2015
Ostrander Point, Prince Edward $154.3 M $448,000 ERT – 24 months of Force Majeure = May 12, 2016
White Pines,

Prince Edward

$411.5 M $520,000 ERT – Default Date = 57 days after favourable ERT
Amherst Island, Loyalist $514.4 M $550,000 ERT – Default Date = 18 days after favourable ERT
Settlers Landing, Kawartha Lakes $68.6 M $420,000 Remedy ERT – Default Date = May 6, 2016
Majestic, Kincardine $13.7 M $408,000 Default Date – May 11, 2016
Meyer, Kincardine $27.4 M $404,000 Default Date – Jun 17, 2016
Total $3.5 B $5.0 M