Ontario power rates triple: “irrational” planning

| June 2, 2014 | Last Updated: Jun 3 8:17 AM ET
 

Ontario Hydro may well have been a mess. But it was a mess that produced less expensive electricity

In the summer of 2003, just before Dalton McGuinty’s Liberals gained power in Ontario, 50 million people in the U.S. Eastern Seaboard and Ontario suffered an electricity blackout caused “when a tree branch in Ohio started an outage that cascaded across a broad swath from Michigan to New England and Canada.” Back in 2003 Ontario’s electricity prices were 4.3 cents a kilowatt hour (kWh) and delivery costs added 1.5 cents per kWh. An additional charge of 0.7 cents — known as the debt retirement charge to pay back Ontario Hydro’s legacy debt of $7.8-billion — brought all-in costs to the average consumer to 6.5 cents per kWh.

The McGuinty Liberals claimed the province’s electricity sector was in a mess when they took over in 2003. The Liberals’ first Energy minister, Dwight Duncan, said then that he rejected the old Ontario Hydro model. “It didn’t work. We’re fixing it. We’re cleaning up the mess.”

Fast forward 11 years. Today, Ontario electricity costs average over 9 cents per kWh, delivery costs 3 cents per kWh or more, the 0.7-cent debt retirement charge is still being charged, plus a new 8% provincial sales tax. Additional regulatory charges take all-in costs to well over 15 cents per kWh.. The increase in the past 10 years averaged over 11% annually. Recently, the Energy Minister forecast the final consumer electricity bill will jump another 33% over the next three years and 42% in the next 5 years.

Whatever mess existed in 2003 is billions of dollars worse today

Summing up: Whatever mess existed in 2003 is billions of dollars worse today. The cost of electricity for the average Ontario consumer went from $780 on the day Dalton McGuinty’s Liberals took power to more than $1,800, with more increases to come. The additional $1,020 in after-tax dollars extracted from the province’s 4.5 million ratepayers is $4.6 billion – per year!

Why?

First, the Liberal Party fell under the influence of the Green Energy Act Alliance (GEAA), a green activist group that evolved into a corporate industry lobby group that adopted anthropogenic global warming as a business strategy. The strategy: Get government subsidies for renewable energy. The GEAA convinced the McGuinty Liberals to follow the European model. That model was: Replace fossil-fuel-generated electricity with renewable energy from wind, solar and biomass (wood chips to zoo poo). In the minds of those who framed the Liberal’s energy policies, electricity generated from wind, solar, biomass – green energy – was the way of the future.

The plan was implemented through the 2009 Green Energy and Green Economy Act (GEA), a sweeping, even draconian, legislative intervention that included conservation spending and massive subsidies for wind, solar and biomass via a euro-style feed-in-tariff scheme. The GEA created a rush to Ontario by international companies seeking above market prices, a rush that pushed the price of electricity higher. The greater the increase in green energy investment, the higher prices would go.

At the same time, Liberals forced installation of smart meters, a measure that added $2-billion to distribution costs. Billions more were needed for transmission lines to hook up the new wind and solar generators. At the same time, wind and solar generation – being unstable – needed back-up generation, which forced the construction of new gas plants. The gas plants themselves became the target of further government intervention, leading to the $1-billion gas plant scandal.

To force adoption of often unpopular wind and solar plants, the GEA took away municipal rights relating to all generation projects, stripping rural communities of their authority to accept or reject them.

To pay for the rising subsidies to wind and solar, the Liberals adopted an accounting device that would spread the cost over all electricity consumers. The device was called the “Global Adjustment.” The Global Adjustment draw on consumers grew fast and will continue its upward movement. In effect, the Global Adjustment is a dump on ratepayers for energy costs that are above market rates. During 2013, the total global adjustment was $7.8-billion. Of that, 52% went to gas/wind/solar/biomass.

The GA for 2014 is expected to rise to $8.6-billion, adding another 2.9 cents per kWh for each electricity consumer.

To oversee all this, the Liberals established the Ontario Power Authority to do long-term energy planning (LTEP) and to contract renewable generation under the feed-in tariff (FIT) program that guaranteed wind and solar generators above-market prices for 20 years or more. In 10 years Ontarians have seen four versions of the so-called long-term plan, suggesting there is nothing long-term or planned. The Auditor General’s report of Dec 5, 2011, disclosed that no cost/benefit analysis was completed in respect to those feed-in tariff contracts.

The numerous Liberals who have sat in the Energy Minister’s chair have had a penchant for believing how the sector should function, issuing “directives” from the cabinet. The directives created the most complex and expensive electricity sector in North America. The Association of Major Power Consumers issued a “Benchmarking” report in which they stated: “Our analysis shows that Ontario has the highest industrial rates in North America. Ontario not only has the highest delivered rates of all these jurisdictions; the disparity in rates also is growing.”

The almost 100 directives over the past 11 years from Liberal energy ministers have instructed the OPA, the Ontario Energy Board, Ontario Power Generation and Hydro One on a wide variety of issues from building a tunnel under Niagara Falls to paying producers for not generating power, subsidizing industrial clients for conservation while subsidizing other industrial clients for consumption. Numerous new programs have been created that support clients in Northern Ontario, urban clients for purchasing EVs (electric vehicles), homeowners for purchasing CFL light bulbs and a host of other concepts without weighing the effect on employers or taxpayers.
Aside from the burden on consumers, Ontario’s Power Trip has cost jobs as companies – Caterpillar, Heinz, Unilever and others – closed Ontario operations while others, such as Magna, failed to invest in Ontario due to high electricity prices and high taxes that would have created private sector jobs.

Were “green energy” jobs created? Government claims hit 31,000 in a press release in June 2013 but since then no mention of green job claims appears in releases. The recent budget of Finance Minister Charles Sousa reported 10,100 jobs in the “clean tech” sector, a far cry from earlier claims.

Ontario Hydro may well have been a mess a decade ago. But it was a mess that produced electricity priced to consumers at 6.5 cents a kWh. Current prices of 15 cents a kWh will rise to over 20 cents a kWh by 2018/19, forcing the average Ontario ratepayer to pay an additional $700 annually. By that date the cost of “renewable energy” to Ontario’s 4.5 million ratepayers will result in an annual extraction of $8-billion to satisfy the perceived benefits of wind, solar and biomass. Over the 20 years of the FIT contracts, $160-billion in disposable income will be removed from ratepayer’s pockets to access a basic commodity, all in the name of “global warming” and renewable power without use of a cost/benefit analysis.

Perhaps it is time for a change in the governing of Ontario and particularly the way the electricity sector is overseen.

Parker Gallant is a former Canadian banker who looked at his local electricity bill and didn’t like what he saw.

Read the full article and comments here.

Turbine view causes property value loss

Can't miss them: turbines seen from the Wolfe Island ferry dock
Can’t miss them: turbines seen from the Wolfe Island ferry dock

One of the fictions maintained by the Ontario government and the corporate wind power development industry and its lobby organization is that property values for properties near wind power projects are not affected by the industrial power operations.

This, in spite of clear evidence from real estate appraisers and Realtors (Lansink, Lxemburger, McCann, etc.) and in spite of the fact that the Ontario Real Estate Association (OREA) lists wind power developments on its Sellers Property Information Sheet as a negative feature that should be disclosed…along with the existence of or plans for garbage dumps an quarries.

The Municipal Property Assessment Corporation (MPAC) released a report a few months ago, claiming there was no impact on assessed values (not the same as appraised  values) but even with MPAC’s carefully selected data set and contrived study parameters, there is evidence of a 25% decline in assessed value.

Here now is a report from the Watertown Daily Times, on property values at Cape Vincent, which is affected by the wind power development on nearby Wolfe Island in Ontario.

Realtors say Wolfe Island wind turbines caused waterfront home prices to plummet

By TED BOOKER
TIMES STAFF WRITER
PUBLISHED: SUNDAY, JUNE 1, 2014 AT 12:30 AM

CAPE VINCENT — Realtors say the value of waterfront homes in the town has slid steeply over the past five years due to the eyesore of Wolfe Island Wind Farm, creating a buyer’s market for those who don’t mind looking out at turbines.

Amanda J. Miller, broker/owner of Lake Ontario Realty, Chaumont, said brokers recently have sold waterfront homes on Tibbetts Point Road off the St. Lawrence River for up to $300,000 less than they were priced at five years ago. The 86-turbine wind farm on Wolfe Island, Ontario, was built from summer 2008 to June 2009.

In one case, “a couple of years ago we had a waterfront house that sold for $300,000 that was in the mid-$600,000 range before,” Ms. Miller said.

Though few waterfront homes on Tibbetts Point Road have been sold in the past five years, Ms. Miller said there recently has been an uptick in buying activity. She said that brokers sold three waterfront homes during the past year. Those homes, previously listed in the $700,000 to $800,000 range, sold for $515,000, $530,000 and $615,000. She said that buying activity increased after the news in February that BP Wind Energy abandoned its 285-megawatt Cape Vincent Wind Farm project.

“Property values on Tibbetts Point Road started declining about five years ago, but it’s pretty much bottomed out now and things are starting to sell again,” Ms. Miller said. “A lot of people who struggled to sell their homes had to drop their prices. But I think things are going to start to slowly repair themselves, because the Cape Vincent Wind Farm battle is over.”

Ms. Miller said a “cloud was lifted off the market” when the BP Wind Energy project was scrapped, boosting the confidence of buyers to invest in waterfront property. She said there will continue to be a pool of buyers who are interested in buying affordable waterfront property and are willing to put up with the view of Wolfe Island Wind Farm.

“There’s no more questioning about whether something might happen that will further affect values,” she said. “Now you’re only left with dealing with the wind farm on Wolfe Island, and people are starting to realize the real battle is over — whether they’re pro- or anti-wind. The burden has been lifted and the market will rebound.”

Cape Vincent Assessor Denise J. Trudell said the value of high-end waterfront properties on Tibbetts Point Road has gradually slid in recent years because of an undesirable view of Wolfe Island Wind Farm. As an example, she cited a home at 32519 Tibbetts Point Road that was sold for $700,000 in 2007; it sold in March for $510,000.

“Homeowners don’t think their property is worth as much because the view is not as desirable as what it used to be,” Ms. Trudell said. “I would say there has definitely been a decline in people looking for that type of high-end property. It has certainly had an effect on the property values along that area. But it all depends on how you want to look at it. I had a property owner two weeks ago tell me they find (the turbines) enchanting and like the view.”

Lesa M. Plantz, broker for Prudential 1000 Realty of Clayton, said that some buyers are attracted to homes on Tibbetts Point Road because prices have sharply fallen since turbines were erected on Wolfe Island. But until recently, there haven’t been many buyers interested in the waterfront property.

“When the windmills were first out there, absolutely nothing sold,” Mrs. Plantz said. “And with the continuing controversy going on with the windmill issue in the Cape, there was definitely a steady decline in sales. We had property sit for a couple of years that would have normally been sold in a couple of months.”

To illustrate that point, she said that a three-bedroom, 2,411-square-foot waterfront house on Tibbetts Point Road that was listed for sale for nearly $800,000 in 2010 gradually declined in price until it was sold in March for $515,000. The price of that home had fallen to $625,000 in 2012, and then to $569,000 in 2013 before dropping to its final sale price.

But Mrs. Plantz said she expects that buyers will become more confident in the market now that BP Wind Energy’s massive project is dead…

Read the full article and comments at http://www.watertowndailytimes.com/article/20140601/NEWS03/706019897

 

 

Wind power’s hidden costs

Not such a great deal for Ontario
Not such a great deal for Ontario

This letter was written in response to a letter to the Ottawa Citizen by Robert Hornung, president of the corporate wind power industry’s lobby group, the Canadian Wind Energy Association (CanWEA). Mr. Hornung had asserted that wind power was among the lowest cost options for power generation.

We disagree.

Ottawa Citizen, May 31, 2014

Wind power comes with hidden costs

Wind power comes with hidden but significant costs: backup power is needed because wind is an intermittent source of supply, produced often when it is not needed, and inflexible to changes in demand. Ontario generation capacity now exceeds demand but because the Green Energy Act requires that renewable energy sources get first access to the provincial grid, we are forced to take wind power over lower-cost conventional supplies.

Readers may also be unaware of the cost of curtailing operations at existing plants, or of losses on export sales. In 2013, this was about $1 billion. Since Ontario started paying wind power corporations to not produce power in September 2013, ratepayers have picked up the cost of $16 million—money, literally, for nothing. The top non-producers are Enbridge, TransAlta, Brookfield and GDF-Suez.

The auditor-general stated in 2011 that no cost-benefit analysis was ever done for renewable sources of power; if it had been, no one would be talking about what a great deal wind power has been for Ontario.

Jane Wilson

president, Wind Concerns Ontario, Ottawa