Response To RNAO Position Statement

Parker Gallant has authored a response to a ‘blinkered’ position statement from RNAO

The Registered Nurses Association of Ontario (RNAO) on March 3, 2012 released a paper titled “RNAO Position Statement on Healthy Energy Solution” which effectively was a rehash of ideas and other papers issued by the likes of Environmental Defence, Pembina and Greenpeace Canada. In summary the RNAO suggests, nay recommends; that Ontario immediately close all coal-fired plants (well, not quite: they suggest we put them on standby while we erect more wind turbines), abandon any thoughts of building or refurbishing new nuclear plants, and use gas generation plants as peaking power until we have enough renewables (wind, solar and biomass) to supply our needs.

The RNAO also suggests wind could supply 20% of our needs while recommending closing down nuclear which supplied 57% of Ontario’s consumption in 2011. Where the difference of 37% will come from is anyone’s guess but perhaps they see the difference coming from conservation which they also push. A “tongue in cheek” report prepared by Aegent Energy estimated that Ontario would require approximately 12,000 industrial wind turbines (IWTs) to replace our existing nuclear plants and those 12,000 IWTs would use up 14,000 square kilometres of Ontario’s land mass. Presumably much of that land mass would be valuable farm land which would effectively reduce our ability to produce cheap abundant food for consumption.

Their report points to the heavy costs of coal-fired generation citing the same worn-out DSS report prepared in 2005 that is used by the Liberal Energy Ministers and the same groups that the RNAO cite as their primary sources of “studies.” That DSS report was prepared for the Liberal Government and provided four scenarios with the one always used as the “worst case” which was when coal-fired generation was contributing 25% of our consumption without the benefit of “scrubbers” to remove most particulates related to asthma related medical conditions. The study by DSS was never peer reviewed and the modelling estimates of environmental related deaths was severely criticized by Professor Ross McKitrick of the University of Guelph. His review concluded: “Overall the DSS05 Report does not provide credible support for the decision to close the Ontario coal-fired power plants. As has been found previously the pollution increments attributable to OPG facilities are extremely small across Southern Ontario except in the immediate vicinity of the power plants themselves.”

The closing of the nuclear generation plants in the province as the RNAO recommends would entail replacing that power with unreliable, intermittent power from wind and solar that would require fossil fuel generation (gas) to back it up. The net effect would be to push up the cost of electricity even further. This would exacerbate the current effect on many Ontario residents putting more and more people into energy poverty. Does the RNAO want Ontarians to choose between feeding themselves or trying to keep warm. The burden placed on people living on fixed incomes would require massive social benefits to sustain them in a province that is burdened with increasing deficits and debt and can ill afford even our current levels. The effect of higher electricity prices; drives out industrial plants from the Province, increases unemployment, and makes Ontario an unattractive destination for any investment that may create new jobs.

Does the RNAO not recognize that Ontario will be unable to support the investment in hospitals they work in, the cost of medical care and their salaries if the government follows through on their recommendations? Does the RNAO, as the Auditor General noted in his report, not consider the cost/benefits associated with charging ahead with unreliable and intermittent energy generation by the many sustainable energy groups who use our tax dollars to further their causes when the rest of the world is questioning the science behind climate change.

This is a blinkered report without substance and ignores both the costs of the proposition they are expounding and the increasing evidence pointing to the health effects of industrial wind turbines on the rural population of this province. The lack of understanding and compassion contained in this report on the part of the RNAO is not in keeping with the nursing profession.

Parker Gallant April 23, 2012

The Ontario Energy Board: Transparently Opaque!

Parker Gallant takes on the OEB over their jargon in presenting of rate hikes.

The Ontario Energy Board has an impressive Mandate which states; “The Ontario Energy Board oversees the province’s electricity and natural gas sectors through effective, fair and transparent regulation and in accordance with the objectives set out in the governing statutory framework.”

The foregoing evokes a warm and fuzzy feeling particularly where the OEB speak to “fair and transparent regulation” however the OEB’s current view of “fair and transparent” is not quite fair or transparent. A recent example of that is their announcement that time-of-use (TOU) rate increases would be “approximately $3.99 on the “Electricity” line, or about 3.3% on the total monthly bill, for a residential consumer with a typical consumption pattern who uses 800 kWh per month.”

If that “typical” residential consumer understands his bill he will discern that the “electricity line” typically represents about 45% of his bill with the balance (55%) made up of the “regulatory”, “delivery” and “stranded debt charges” That 3.3% increase is in reality a 7% increase in the electricity line and with the TOU rates reset every 6 months the 7% increase is a 14% annualized increase. The “trickle down” effect is also not dealt with in the OEB’s announcement as an increase in the “electricity price” increases the HST payment.

For the OEB to cite transparency in their “Mandate” then put out an announcement that seeks to trivialize or hide the actual increase indicates they are either being directed to do so or, their reputed transparency is Orwellian.

The OEB by citing the overall effects on a ratepayers bill, effectively allows “rate creep”. One recent example is the OEB’s approval to Grimsby Power issued February 12th where their “news release” states: “The delivery line of electricity bills will increase by approximately $3.06 for Grimsby’s residential customers using 800 kWh per month. The total bill impact is an increase of 2.8%.” As the “delivery line” represents about 35% of a “typical” electricity bill the increase is actually an 8% annual increase to the “delivery line” not the 2.8% that the OEB obliquely hide through reference to the “total bill”. Bundle the TOU increase together with the delivery increase and the Grimsby ratepayer is facing a 22% annual increase on 80% of their bill. Still to come in the current year are; rate increases for IESO’s smart grid spending (part of the “regulatory” line), Hydro One’s transmission spending (part of the “delivery” line) and conservation spending (part of the delivery and regulatory lines) by the OPA so the Grimsby ratepayer could be facing an annual increase of 25% or more.

Taken together the “typical” ratepayers bill is increasing much faster than forecast in the Long Term Energy Plan (3.5% over 20 years) and will increase further as more expensive renewable energy is added to the grid at a time when demand is falling. The current contracted supply surplus is sold by IESO at wholesale prices that are also falling. The result of the latter two circumstances is that the Global Adjustment (the pot where the subsidies temporarily reside before the OEB sets the TOU and RPP rates) is rising at an incredible rate and for March 2012 was $666 million (a 21% increase from February 2012) which, if it continues at the March level, will become a pot of $8 billion in the next 12 months or 60% more then the $5 billion that accumulated for 2011.

It is time for the OEB to have a long hard look at their mandate and recognize that their view of “transparent regulation” is opaque. Perhaps its time for the OEB to either “man up” or rewrite that “Mandate!

Parker Gallant,
April 21, 2012

The OPA: Gone without the Plan

The OPA: Gone without the Plan

Today the Minister of Energy, Chris Bentley announced the merger of the OPA with IESO that will somehow save the ratepayers and taxpayers $25 million dollars in the electricity sector. To put that in perspective that would be about 10 days of gross revenue we will pay to Samsung when they have installed their 2500 MW of wind and solar generation and approximately .2 % of the approximately $15 billion gross revenue ratepayers make annually to ensure they can turn on their lights in the Province.

The demise of the OPA should not be a surprise to anyone as they were originally established as a temporary agencyto produce a long term Integrated Power System Plan (IPSP). The OPA did produce one but when George Smitherman was the Energy Minister he ordered it tossed in the garbage as he created the Green Energy and Economy Act (Act) in its place; at the bidding of the green energy sustainable crowd. So this temporary agency created by the Liberals spent 8 years and have nothing to show for it except for a stack of renewable wind and solar contracts that have driven up Ontario’s ratepayers bills by over 100% with more increases to follow. Another Smitherman/Liberal legacy that will burden the Province for decades. For a quick look at where we were and where we are today the following chart highlights the lack of progress and increasing costs of the OPA and IESO.
As further evidence it is worth noting that the 2003 sunshine list had only 168 IESO employees on the list but the merged entity will have over 400 for a growth of 140%. The fact that IESO is a union shop (the OPA wasn’t) will no doubt serve to push the incoming OPA salaries to higher levels as the extraction of money from ratepayers pockets continues. That touted $25 million savings will disappear before ratepayers experience any benefit.
So eight years have gone by and Ontario is still waiting for the Liberal promise of a IPSP that will produce a plan for the electricity sector.
Some plan, some legacy for our children!
Parker Gallant,
April 18, 2012

Sole Source Contracts- The Green & the Stealthy Kind

Parker Gallant compares two ‘sole source’ contracts:  One with the Korean Consortium, the other for F-35 stealth jets.

Parker Gallant: Sole Source Contracts- The Green & the Stealthy Kind | Energy Probe:

When you compare the two sole sourced contracts, the F-35 stealth jets at a cost of about $725 per person look like a bargain and we will have 10 extra years to pay the debt off. The F-35 jets also won’t kill nearly as many birds and bats as those wind turbines or spoil some of Ontario’s beautiful vistas.

Read the full article at the Energy Probe website

Mr Premier; Who Wants Turbines?

This blog noted the article in the Belleville Intilligencer, yesterday – and Parker Gallant followed up with this letter

To: The Honourable Dalton McGuinty:

I read the interview that you recently had with the Belleville Intellegencer http://www.intelligencer.ca/ArticleDisplay.aspx?e=3533375 and noted your comments in respect to the placement of wind turbines in communities. To refresh your memory here is the preamble:

“The new wind turbine program will be key to circumventing the angst of factions in areas like Prince Edward County who have vehemently opposed the implementation of wind turbines in their community, Premier Dalton McGuinty said, during an exclusive visit to the Intelligencer Friday.” which you followed up with as follows:

““I’ve got all kinds of communities that want them,” he said. “I don’t need the headaches that are associated with them going into communities that don’t want them.”

On the latter note could you (or Minister Bentley whom I have copied on this) please supply me with the list of the communities/municipalities who “want them” to determine if the list dovetails with the list of communities that have rejected them.

Your early attention to the above question would be greatly appreciated and (assuming the two lists are compatable), greatly relieve many of our members who may be causing some of the angst and headaches you refer to.

Yours truly,

Parker Gallant, VP
Wind Concerns Ontario

Yes Minister, its been an interesting 6 months

Parker Gallant’s latest – A portable document format is posted here

Yes Minister, its been an interesting 6 months

It has been 6 months since the Liberals were returned to power in Ontario with a “major minority” and almost 6 months on the job for Minister of Energy, Chris Bentley. Since his appointment a lot has happened in the energy sector that may not have received the attention it deserved, having been overshadowed by the ORNGE scandal which, in terms of costs to Ontarians will look like a rounding error when compared to the Energy Ministry. In no particular order here are some of the events that Minister Bentley has faced:

Pay Freeze for some, Frozen Daiquiris for Others:

The Executive Pay freeze that Premier McGuinty announced back in March 2010 apparently doesn’t apply to several of the Crown Corporations such as OPG nor does it apply to the Municipally owned local distribution companies such as Toronto Hydro despite McGuinty’s appeal back then when he said, “I would invite the municipalities to take a long hard look at what we are doing here.” When the 2011 sunshine list came out the five top executives at OPG collectively received 21% more ($846,000) then they were paid in 2010. This huge raise came despite OPG’s revenue decline of 5.7%, profit decline of 36% ($233 million) and market share drop of 2.5%. In the case of Toronto Hydro’s CEO he had to contend with only a 12.4% ($94,000) increase bringing his compensation to $851,983 which means he earns 5 times Mayor Ford’s salary and $330,000 more then the CEO of Hydro Quebec. Raises at the other crown corporations like Hydro One were much more modest and generally less then 2%. The Ontario Power Authority CEO, Colin Andersen, received no increase.

Auditor General’s Report:

The Auditor General’s Report was a scathing rebuttal of the Energy Ministry when it was released in December 2011. Under a barrage of questions from the opposition parties in the Legislature Minister Bentley had little outward respect for the report except for; “I very much thank the Auditor General for his report and for his good advice. We’re already acting on the recommendations to improve the approach.” and the other responses were generally as follows: “We made the choice to get out of coal. They disagree with that. There’s a cost to stay in coal: $4 billion-plus a year, human suffering, illnesses. At the height of the recession, we made a choice to create jobs for Ontarians and accelerate the cleanup of the air. The 20,000 jobs, billions in investment—it’s all about the choices you make. We stand for clean air, good health, jobs for Ontarians and a brighter future for this province.”

Bentley clearly ignored the elephant in the room!

Fit Review:

Minister Bentley was the recipient of the two year FIT review mid March that was prepared by Fareed Amin, Deputy Minister of Agriculture and took only three days to bless the recommendations. The review called for minor adjustments to the pricing offered for wind (15% reduction) and solar generators (20% reduction). This has left Ontario with subsidized prices for these two sources well above all countries in the G20 including Germany, the poster child of the existing and prior Ontario Ministers of Energy. Germany recently announced significant cutbacks on their solar tariffs which will reduce payments for solar generators to as low as 18 cents a kWh versus Ontario’s lowest at 35 cents a kWh. The bankruptcy of the largest German solar company, Solar Millennium also impacted the US as their US subsidiary filed for Chapter 11 financing despite being the beneficiary of a US$2.1 billion guarantee provided by the US Energy Department. China has become the solar king and Ontario has no hope of ever becoming a force in the manufacture of solar panels. The same applies to any major inroads in producing wind turbines. Any hope is faint hope, if the Liberals believe they can replace some of those good manufacturing jobs lost in Ontario because of high energy prices.

Law Suits:

That gas plant in Mississauga that was cancelled during the election campaign, to ensure the re-election of the Liberal MPP, also returned to haunt Mr. Bentley as a $300 million law suit was launched against the Province. Bentley had this to say: “ A statement issued Friday by Energy Minister Chris Bentley said the province would vigorously defend against the claims, but declined further comment because the case is before the courts.” Another $1 billion law suit was also launched against the Province for the Province’s imposition of a moratorium on offshore wind farms and Minister Bentley had this to say:

“Energy Minister Chris Bentley says SouthPoint did not have a contract with the province, and the government intends to defend the lawsuit.” Mr. Bentley also has to deal with an earlier law suit of $2.25 billion launched by Trillium Wind Power. So far no lawsuit has been launched by TransCanada Corporation in respect to the cancelled gas plant in Oakville, a 1000 MW capacity plant for which TransCanada had a firm contract. No details of settlement on this cancellation have been released but with the plant expected to contribute 10 cents a share to TransCanada’s annual income we should expect that an agreement is being negotiated for the lost revenue. The Liberals treatment of the Energy Ministry has clearly placed the ratepayers and taxpayers of Ontario in the position of having to pay for their mistakes.

Domestic Content:

The Green Energy Act when passed in 2009 carried provisions that require OPA contracted parties to ensure Ontario content in their projects. That provision was quickly challenged by Japan and the EU via the World Trade Organization (WTO) and their arguments were recently put forward to the WTO’s dispute panel. The principal arguments were: “The FiT programme and its related contracts confer a benefit to the FiT generators since the OPA guarantees above-market rates for the supply of electricity,” the EU argued before the panel and “That excess is best confirmed by examining the difference between the FIT rates and HOEP [Hourly Ontario Energy Price], as HOEP represents the entire rate that these generators would have received” under normal market conditions, Japan added. While a negative ruling won’t directly affect the Ministry, if Canada loses, it will impact all Canadian taxpayers via any penalties imposed by the WTO. It surely must be of concern to Minister Bentley as he will be saddled with the results and that could impact any thoughts he might have of running for the leadership of the Liberal Party when Dalton McGuinty steps down.

Integrated Power System Plan II:

When the Liberals were first elected in 2003 their war of words in respect to the Ontario electricity sector incessantly blamed the previous governments for not creating a long term energy plan. They created the Ontario Power Authority as a temporary agency to fulfil that gap. Eight years have passed and they still haven’t produced what they apparently noted both the NDP and the PC party failed to do during their time as the ruling parties. The second version (Smitherman killed the first one) of the IPSP was presented to Minister Bentley pre-Christmas and has been with him for that period but nothing has emerged from his office for review by the OEB. Bentley managed to turn the 2 year FIT review around in three days but he has been sitting on the IPSP for over three months. One can only assume that the recommendations in the IPSP II fail to dovetail with the Liberal beliefs as expounded in the Long Term Energy Plan that Minister Bentley’s predecessor, Brad Duguid, released back in November 2010.

Ontario Power Authority Annual Report:

The “sunshine list” disclosed that the CEO of the OPA did not receive any increase in 2011 and perhaps the several law suits (see above) launched against the Province have something to do with that. One telling KPMG auditors note is this one: “Negotiations related to this matter are ongoing. A

reasonable estimate of any settlement amount cannot be determined at this time.” and it applies to both the cancelled Oakville and Mississauga gas plants. OPA’s 2011 annual report makes no mention of the Trillium Wind Power law suit for some reason despite the fact that Trillium claims it holds a contract (see above “Law Suits”) with the OPA. The annual report also discloses that the OPA has signed contracts for 8,030 MW of wind, solar and biomass as of December 31, 2011 versus signed contracts as at December 31, 2010 of 4,873 MW. If one assumes the target for renewables is 10,700 MW as laid out in the LTEP then the OPA is only 1,770 MW short of what Minister Duguid had planned.

IESO Data Collection Rate Increase:

The Environment Commissioner of Ontario released his report on conservation in the energy sector in December and had this to say; “The ECO is disappointed that data collection and analysis to track the actual reduction in peak demand due to TOU pricing is just beginning now.” By next year the Environment Commissioner, Gordon Miller should be happy as the IESO has just asked the OEB for a rate increase to cover the cost of a “meter data management repository to collect, manage, store and retrieve information” and that will cost the ratepayers $252 million and add annual costs of $9.62 to the bills of 4.7 million ratepayers. In a review of the application submitted to the OEB by IESO the following stands out; “42. The total costs presented in the table above differ from the Ministry-approved budget of $89 million.” So the Ministry of Energy budgeted $89 million for what will cost ratepayers $252 million for a cost overrun of $163 million or 183%. For this expenditure the ratepayers will get no benefits, only higher delivery costs and IESO will gain no additional benefits that will enable them to manage the grid. The Environment Commissioner will presumably be able to garner information that will allow him (and the associated Liberal Ministers) to claim credit that TOU pricing is actually working and Ontario’s ratepayers are shifting their usage. With a forecast cost overrun of $163 million Mr. Bentley may have a difficult time convincing voters that this is a good thing.

Electricity Exports:

The Auditor General’s report had this to say about our exports of electricity; “we estimated that from 2005 to the end of our audit in 2011, Ontario received $1.8 billion less for its electricity exports than what it actually cost electricity ratepayers of Ontario.” Despite the scolding from the AG the Ministry of Energy under Mr. Bentley brag about the fact that they sell electricity at a loss to our neighbours. For the first two months of 2012 Ontario exported 2.1 TWh (210,000 MWh) at a price of $25/MWh (2.5 cents per kWh) generating $52.7 million but those 2.1 TWh cost Ontario ratepayers $97.8 million. How Ontario ratepayers paying almost $100 million, in just two months, so our neighbours can purchase cheap electricity provides any benefit is unexplainable yet the Minister of Energy continues to issue press releases bragging about that, while our surplus of electricity continues to grow. How Mr. Bentley explains away this disdain for proper planning is an affront to the ratepayers and the qualified people at the various public entities that must execute their blind ambition to green Ontario.

Losing Supporters:

Former supporters such as Ontario Nature on February 15, 2012 and the Ontario Federation of Agriculture on January 20, 2012 have both reversed their previous full support of industrial wind turbines. The former has called on the government to protect important bird areas (IBA) and OFA President Mark Wales said; “The onus is on our provincial government to ensure the interests of rural Ontarians are protected. OFA is speaking up to clearly outline the issues that must be addressed right now.” Those “issues” included the price paid, the inefficiencies of wind power, setback and noise issues related to health and the removal of municipal input. None of those issues were dealt with in the FIT Review (see above).

Rate Increases:

The OEB is set to announce the revised time-of use (TOU) prices later this month and they will be up again as more and more renewable energy enters the grid even as demand continues to fall. IESO has put a forecast out for the April 2012 Global Adjustment (GA) anticipating it will be in excess of $74/MWh (7.4 cents a kWh) while the hourly Ontario electricity price (HOEP) continues to decline (2.1 cents per kWh) generating bigger subsidies for exports, constrained power and causing OPG to lose revenue through spilled hydro. If the overall price of electricity is forecast to remain at the April 2012 level, the 9.5 cents per kWh (GA + HOEP) may generate a rate increase approaching 20% per annum for the next 6 months. That will result in additional conservation, meaning local distribution companies will rush in with rate applications for their lost revenue along with their applications for refurbishment. On the latter, Toronto Hydro sought a huge increase that was recently rejected by the OEB so are now in the process of challenging the OEB. For more on the latter a visit to Tom Adams website is suggested. Mr. Bentley had better brace himself for a plethora of negative feedback if the cost of electricity and its associated delivery costs soar as anticipated. He presumably is already feeling the heat from farmers and small and medium sized businesses as the Ontario budget brought in by his colleague on the Liberal benches, Minister of Finance Dwight Duncan, reduced the Ontario Clean Energy Benefit (OCEB) to those consuming over 3,000 kWh per month. While hoping to catch rich electricity consumers the reduction has instead caught businesses that are already struggling to operate.

Protests:
Rural Ontario has demonstrated that they are basically against Industrial Wind Turbines (IWT) by protesting actively in their communities, generating local council interest (79 municipalities have passed bylaws requesting a moratorium on IWT installations), and by turfing out 10 Liberals from their riding’s in the last election. A major protest in Toronto April 3, 2012 brought together an estimated 700/1,000 protestors from across the province to challenge the economic, health, environmental and other costs of the FIT and MicroFIT programs and to bring the message to Toronto’s residents. Minister Bentley should expect these protests to gain momentum as the negative fallout from the flawed energy policies starts to be noticed on the electricity bills of the urban communities that put the Liberals back in power.

Looking Forward:

The Minister of Energy should brace himself for another 6 months of considerable turbulence unless the NDP join forces with the Ontario PC Party and either force an election or get the Liberals to rescind the Green Energy and Economy Act.

The time for action has passed and if allowed to continue will doom Ontario to the status of a “have-not” province for decades.

Parker Gallant,
April 9, 2012