Q1 ratepayer pain: electricity export costs skyrocket

Ontario's electricity customers pay and pay and pay while neighbours get our power cheap
Ontario’s electricity customers pay and pay and pay while neighbours get our power cheap

Wind almost 40% of exported power; cost of surplus export $437 million in just 3 months

The first quarter of the current year indicates Ontario is exporting record quantities of surplus electricity.

It appears to be part of the Liberal government plan as this excerpt from Finance Minister Sousa’s budget “Building Ontario Up” claims:  “Through our four-part economic plan, we are supporting greater investment in productivity and innovation, providing a renewed focus on international exports, encouraging the transition to a low-carbon economy and creating more jobs for Ontarians.”

It would be better if our surplus electricity was exported profitably, instead of a cost to ratepayers, but alas, that is not the way the Liberal Energy Ministers past and present have structured the portfolio.

The first quarter of the current year saw Ontario export a record 6.65 TWh (terawatts) — that’s enough to power 690,000 average households for a full year.

Export costs up 75% in first quarter

The 6.65 TWh sold to our neighbours was up 75% from 3.81 TWh in 2014’s first quarter. We sold that surplus at prices well below what we received.  Exports represented 17.5 % of Ontario’s demand in 2015 versus 10% in the same period in 2014. Wind (generated and curtailed) in 2014 was 2.05 TWh and 53.7% of Ontario’s exports; in 2015, wind grew to 2.61 TWh and was 39.2 % of our exports.

The concept of exporting is one that economists encourage; however, they expect it will be profitable, create jobs, and not burden the rest of the economy though subsidization.  Subsidizing exports is often referred to as “dumping” and frequently challenged under the WTO (World Trade Organization) rules.

Cost to ratepayers is shocking

Examining the cost to Ontario ratepayers for the 3.81 TWh exported in 2014 and the 6.65 TWh exported in 2015 using data from the Independent Electricity System Operator’s (IESO) “Market Summaries” is shocking.

The 2014 first Quarter exports cost (average of $102.6 million/TWh) ratepayers $391 million to produce and was sold via the HOEP (hourly Ontario electricity price) market at an average of $75.54 million/TWh. That cost Ontario’s ratepayers $103 million.  In 2015, the 6.65 TWh exported cost Ontario’s ratepayers $672 million (average cost of $101 million/TWh), and sold at an average of $35.4 million/TWh, costing Ontario ratepayers $437 million.

To put some context to the latter, the money lost exporting the 6.65 TWh  was equal to 6.6 cents per kilowatt hour.   The foregoing subsidy does not include other costs Ontario’s ratepayers pick up including: spilled hydro, steamed-off nuclear or payments to idling gas plants. The subsidies supporting exports is double what Energy Minister Bob Chiarelli suggests is needed to assist almost 600,000 “low-income” households to pay their hydro bills. Ontario’s ratepayers will start paying the latter January 1, 2015.

This analysis would not be complete without noting the cost of wind generation (two quarters) in 2014 was $252.7 million (average cost of $123.5 million per/TWh) and $322.5 million for 2015!

Perhaps our Finance Minister should “focus” on the harm to Ontario’s ratepayers instead of dumping our surplus electricity on our neighbours who are happy to take it and not raise the issue with the WTO.  If the first quarter of 2015 is indicative of the full year, ratepayers will pick up $1.8 billion in subsidies to supply our neighbours with cheap electricity, while Ontario’s citizens struggle.

©Parker Gallant,                                                                                                                                       April 28, 2015

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

Chart courtesy Scott Luft of Cold Air Online
Chart courtesy Scott Luft of Cold Air Online

Ontario ratepayers on the hook for Ontario deficit

Ontario on the brink of the financial abyss--with electricity ratepayers on the hook for millions
Ontario on the brink of the financial abyss–with electricity ratepayers on the hook for millions

“Building Ontario Up”…to a huge disappointment

A letter directed to Energy Minister Bob Chiarelli, dated April 1, 2015, suggesting how he might stop the climb in electricity prices remains unanswered.

The budget preview posted on the WCO site April 19, 2015, however, has been verified.  The Ontario Budget, “Building Ontario Up,” released by Finance Minister Sousa April 23, 2015 has lots of bad news for Ontario ratepayers.

Prior to the release of the budget, Sousa released a 191-page report: “Ontario’s Long-Term Report on the Economy,” which got no media attention.  The report speaks to the wonders of how the current government plans for Ontario’s future will look, but with a caveat:  “It is beyond the scope of projections of this nature to quantify the risks of global political disruptions, extreme weather due to climate change, major health emergencies such as pandemics, disruptive technologies or an increase in international conflicts. Any of these factors, in addition to other unforeseen risks, could significantly impact the long-term outlook for the Ontario economy.”

With respect to electricity, it had this to say: “This will mean pursuing lower-cost options to meet energy needs when and where they are needed and other initiatives to reduce the cost increases in electricity now and in the future. Compared to the previous plan, the 2013 LTEP is expected to reduce projected cost increases by a cumulative $16 billion in the near term (2013–17), and $70 billion by 2030.”

The take-away from the lack of a response from Energy Minister, Bob Chiarelli is that the Liberal agenda, as it relates to the electricity sector, is written in stone and ratepayers are now regarded as a “revenue tool.”  Ratepayers are needed to pay for the agenda, to help balance the budget, and eliminate the deficit, despite the dishonest comment in the preceding quote.

The budget confirmed most of the preview forecast and included areas that extracts after-tax ratepayer dollars, despite the rhetoric in the “Long-Term Report on the Economy.” Non-budget Items, Reduced Spending and Increased Revenue from Ratepayers are three categories reviewed as follows.

►Non-budget Items affecting ratepayers

The budget claims the province is making “investments” falsely by extracting monies from ratepayers as the following quote about the “Northern Industrial Electricity Rate Program” (NIER) notes: “the government is committing to ongoing support for northern industrial facilities beyond March 2016, with continued investment of up to $120 million annually.”

The $120 million referenced will be paid by ratepayers, not taxpayers. It’s just one example.  The rest include: the newly announced Ontario Electricity Support Program (OESP) for “low-income” households of $225 million (see below under “Reduced Spending”); the Class A to Class B shift for industrial consumers with peak demand of 3 Megawatts costing an estimated $200 million; the recently approved rate increase by the Ontario Energy Board for the OPG which increased electricity costs $600 million; and the anticipated increases in delivery charges for LDC (local distribution companies) of $600 million.  Collectively the foregoing represent over $1.7 billion. This additional cost to ratepayers attracts the Ontario Portion of the HST (see below under “Increased Revenue”).

Reduced Spending

The Ontario Clean Energy Benefit will officially end December 31, 2015 meaning the forecast in the budget reduces this cost by $220 million; it will be followed in the next budget by a further reduction of $900 million.  This reduced spending will than be paid fully by ratepayers and include the HST, raising costs another $145 million putting $90 million into Ontario’s sales tax revenue slot. The budget also shows a cut of $243 million in “Social Service” spending reflecting the advent of the OESP.  Total reduced spending next year will be $450 million and in two years, will be reduced by $1.4 billion!

Increased Revenue from ratepayers

The budget anticipates increased Payments in Lieu of Taxes (PIL) of $315 million. That means the province is anticipating huge profits being generated by LDC that will be directly taken from ratepayers’ pockets.   In addition, the province’s portion of “sales tax” (forecast to increase $1.2 billion) on HST revenues will produce another $160 million for the 2015/16 year and in excess of $230 million in 2016/17.  Increased Revenue will be $550 million.

Eliminating the double counting on LDC revenue (PIL of $315 versus forecast “Non-budget Item” of $600 million) and “Social Service” spending ($243 million) will saddle ratepayers with costs in excess of $2.1 billion for budget year 2015/16 and $3.1 billion the following year—that’s without including the costs of the additional industrial wind and solar generation now in the contracting process!

In short

The ratepayers in Ontario should be grateful the reduction in those “projected cost increases by a cumulative $16 billion in the near term (2013–17), and $70 billion by 2030” have been tackled by our incumbent government, or the excesses we have seen, past, present and future from the proliferation of industrial wind turbines and solar panels, would have driven all industry from Ontario and have us freezing in the dark and unable to buy groceries.

As it is, the budget claims:  “Ontario remains the leading destination in North America for FDI” (Foreign Direct Investment). That particular claim fails to mention that as much as $25 billion of the “FDI” came from foreign companies rushing to Ontario to sign those lucrative ratepayer-backed wind and solar contracts, guaranteeing them 20 years of subsidies!

The current Liberal government has brought Ontario to the brink of the whirlpool. Unless they change their push for more wind and solar generation “Athens-on-the-lake” (a.k.a. Queen’s Park) and  Ontario will be sucked into the abyss.

©Parker Gallant

April 25, 2015

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

Decision to protect endangered turtle upheld-wind farm would cause serious harm

Protection of wildlife in Ontario in the hands of the people, not the government or the wind industry
Protection of wildlife in Ontario in the hands of the people, not the government or the wind industry

Here is a statement from the Prince Edward County Field Naturalists:

The Ontario Court of Appeal reversed a lower court ruling regarding a Renewal Energy Approval of the 9-turbine Ostrander Point industrial wind project. The decision reinstates the key initial finding of the Environmental Review Tribunal (ERT) that serious and irreversible harm to threatened Blanding’s Turtles will occur if the project operates as approved.

“We’re very pleased. The court has ruled in favour of protecting the environment, which is what we’ve asked for throughout“ said Myrna Wood of the successful appellant Prince Edward County Field Naturalists.

“The decision is undoubtedly important” said Eric Gillespie, its legal counsel. “This is the first renewable energy case to reach the Court of Appeal. The Court has supported our client’s fundamental concerns and affirmed a number of legal principles that clearly will be relevant to other appeals.”

The question of remedy has been directed back to the ERT.

For further information contact Myrna Wood 613-476-1506 myrna@kos.com or Eric Gillespie 416-436-7473 (voice/text) egillespie@gillespielaw.ca

And, more detail from Cheryl Anderson, spokesperson for PECFN:

The Prince Edward County Field Naturalists have finally won their appeal against an industrial wind turbine project at Ostrander Point.  The Decision by the Appeal Court of Ontario found that the project will cause serious and irreversible harm to the Blanding’s turtle and its habitat.

It also found that Gilead Power and the Ontario Ministry of the Environment did not get a hearing of their proposal for a different remedy and that the Environmental Review Tribunal should hear that proposal.  The ‘remedy’ proposed was to put gates on the access roads to stop public traffic. PECFN is more than willing to show the Tribunal how putting gates on the very access roads, which will cause the irreversible harm, is no remedy at all.

This decision shows that with careful thought the Court of Appeal has recognized the serious consequences that would result in the development of Ostrander Point Crown Land Block.  The court has referred back to the Environmental Review Tribunal the matter of gates on the turbine access roads, which is described as a remedy to the serious and irreversible harm to the Blanding’s Turtle.  The consideration of this matter was not allowed by the Divisional Court.

The decision also shows that even though the structure of the Green Energy Act imposes almost impossible odds against environmental protection, determined people can succeed in making their case heard.

 

Dutton-Dunwich says NO to wind farm

Got the message, Invenergy? No means NO.
Got the message, Invenergy? No means NO.

April 20, 2015, Dutton/Dunwich, ONA crowd of over 50 peaceful demonstrators took to the streets of Dutton/Dunwich Friday evening, April 17, to show their concern that Industrial Wind Turbines (IWT) are being considered for the Municipality. Carrying signs, and wearing t-shirts and buttons, the protesters spoke up as part of the 84% of citizens that voted “No Wind Turbines!” when asked in a Dutton/Dunwich (D/D) municipal survey last year.  Following the survey, the D/D Council passed a motion that D/D be allowed by the Government of Ontario to remain IWT-Free.

Despite this strong public and Council opposition, the Chicago-based company Invenergy has continued to promote an IWT project in D/D. The company has optioned approximately 17,000 acres of D/D farmland, with a goal to place a 30 turbine 90-MW project in the municipality. This summer they will submit a proposal to the IESO (Independent Electricity System Operator) to be considered for this industrial development. The Liberal-approved Green Energy Act has essentially stripped local governments of their right to decide whether Industrial Wind Turbine projects are placed in their municipality.

Last Friday Invenergy was celebrating their annual meeting at the Dutton/Dunwich Community Centre, with some of the local landowners who have optioned their land.  Protesters lined the streets leading up to the Community Centre, to show their opposition. Concerns expressed by the protesters include the high costs of electricity, which IWT contribute to in a large way; the health issues that result from placing huge IWT too close to homes; the loss in property value that results when these projects are built in a community; and the community discord that results when a small minority of landowners profit, while the majority of citizens suffer.

Submitted by – Dutton/Dunwich Opponents of Wind Turbines – contact info@ddowt.ca for more information or to support this opposition group.

84% of Dutton-Dunwich citizens said NO to proposed wind farm
84% of Dutton-Dunwich citizens said NO to proposed wind farm

What the K2 documents mean

Wind power agreements are very detailed and complex: not everyone knew what they were getting into, says lawyer Eric Gillespie
Wind power agreements are very detailed and complex: landowners are signing away property rights in the agreements

Last week, news of a $1 billion “charge” on properties leased for the K2 wind power project was sent out throughout Ontario, by an individual who happened upon them at a registry office.

While incomplete, the documents do indicate a situation that should be of concern to anyone leasing land for wind turbines, or other wind “farm”-associated uses.

Parker Gallant, a former bank vice-president, sums up what we know about the K2 situation:

…the lenders want to ensure protection of their loan. The security they look for is 1. the actual wind turbines  (the capital cost to build them and their value), 2. the OPA contract (probably via an acknowledged assignment), and 3. the leases (due to concern the lessor may back out or sue the developer) that property owners have signed.

The lenders would be looking at the consequences of, say, the property owner selling his property or someone else like a bank (who is providing a mortgage or a short-term loan to finance crops or cattle before taking the cattle to market or selling the crops), or the township (for non-payment of property taxes) stepping in and exercising their rights under their security or position (e.g., municipal taxes owing but unpaid).

By registering against the property, the lender knows they would get first rights to pay up (property taxes) or stop the sale (if the lessee decided to sell) in order to cure the default etc.  What that effectively does is tie the hands of the lessor until the contract expires or the lender is repaid in full.  Any one who signed the lease is putting themselves in that position and it is surprising that more people don’t understand what they are doing when they agree to lease their property to a developer.

We will be looking into the K2 documents in greater detail as is possible, but once again, the lesson for landowners is, it’s not simply a deal where you lease a bit of your property and get some money every year. These wind turbine leases are very serious documents, full of implications for the landowner.

As one Ontario mayor told the Not A Willing Host meeting at the Association of Municipalities of Ontario meeting in Ottawa almost two years ago, “What landowners need to understand is that they essentially sold their property for the lease amount.”

K2 is just another example of that object lesson.

 

Ontario’s new budget: how to get rid of a $10-billion deficit?

Keep working, Ontario: you've got a lot to pay for
Keep working, Ontario: you’ve got a lot to pay for

Ontario: balancing the books with SWEATED ratepayers

How can Ontario rid itself of a $10.9-billion deficit, as the Liberals promise by 2017/18?  Both Finance Minister Charles Sousa and Premier Wynne are adamant it will happen, but many of us ordinary folks, as well as economists, debt rating agencies, etc., are having difficulty seeing how that will be accomplished without either a big tax increase or an across-the-board slashing of ministerial budgets.

The Finance Minister announced the budget will be released April 23, 2015.  What should we expect?

Having agonized over the question for some time, I believe the formula Minister Sousa has devised  will not sit well with Ontario’s ratepayers and others who dare to consume energy.

The norm for Ontario government programs is: label them with an acronym. Well, maybe ratepayers/taxpayers need an acronym to describe the upcoming budget balancing plans. I suggest SWEATED1. (Sousa Wynne Eliminating All Traces [of the] Enormous Deficit).

To eliminate a $10.9-billion deficit requires politicians to make difficult decisions that might prove detrimental in future elections, but if they are presented as positive change the party’s fortunes may not be harmed.

Here is how we might anticipate what “Revenue Tools” they think may do the job:

Reducing the Ontario Deficit:

Effective January 1, 2016 the OCEB (Ontario Clean Energy Benefit) will be eliminated, saving $1.2 billion for the Treasury.  The $1.2 billion “benefit” removed will mean ratepayers pick up those costs. The Province will also garner their (8%) portion of the HST, putting another $100 million towards deficit reduction. Result: the deficit falls to $9.6 billion.

Also effective January 1, 2016, the OESP (Ontario Electricity Support Program) starts and  ratepayers will be charged with funding it.  The estimate is $200 million to cover subsidies for “low-income” ratepayers. Ratepayers will also pick up the HST portion of $16 million. The Ministry of Community and Social Services will cut their budget by $200 million. Result: the deficit is reduced to $9.384 billion.

Effective immediately (announced by the Ministry of Northern Development and Mines) the Northern Industrial Electricity Rate Program became permanent “with continued investment of up to $120 million per year.”  Ratepayers will continue to supply those “continued investments” for  eternity!  This doesn’t affect the deficit reduction but will mean NO rate relief!

Effective July 1, 2014 OPG started to receive regulated rates for unregulated hydro and also paid for IESO induced spillage increasing the annual cost of OPG-supplied hydro by about $250 million,  OPG also got approval for a rate increase to cover some of their pension shortfall adding $300 million to power costs.  Electricity generated by OPG will cost $600 million more and add $50 million to the province’s HST revenues. Higher profits for OPG means the province could generate $300 million in dividends. Result:  the deficit is reduced to $9.034 billion.

Now, OPG are not the only ones to get rate increases as all LDC increased their collective billings by $541 million (2009 to 2013), meaning the province collects their 8% HST portion and the increased  profits allows the LDC to pay higher dividends to their municipal owners.  This will allow the province to reduce payments to municipalities by $100 million and, together with the HST portion of about $50 million, will further reduce the deficit to $8.884 billion.

Now with Hydro One’s announced partial sale we should look to what the province might generate. A sale of 60% to Provincial Pension Funds: e.g., OMERS, OPB, Teachers, etc., for the $9 billion Ed Clark suggests it would generate, will be allocated thus: $5 billion to pay off what the province owes OEFC for their Hydro One debt and interest  and a one-time reduction in the deficit.  The  balance of $4 billion would be put in the Trillium Trust “infrastructure pot.”.  That $9 billion would produce a budget surplus of around $100 million, once the full 60% of Hydro One is sold.

Now to put the budget well over the top, the recent announcement for a “cap and trade” tax on vehicle fluids (gasoline & diesel) of, say, 3 cents/litre would generate about $700 million annually (based on 2013 Statscan Ontario consumption numbers for Ontario).  Let’s assume it will raise $300 million annually from other “carbon emitters.” Result: the budget surplus will jump to $1.1 billion.

What this all suggests is Ontario could claim the province is in surplus by $1.1 billion, (the cost to move two gas plants), which they will have done principally on the backs of  energy consumers, just as they have in the past!

©Parker Gallant,                                                                                                                                      April 19, 2015

  1. Oxford defines “sweated labour” as “hard work done under poor conditions for very low wages”.

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

Irish wind farm to impact environment, health: planning process ‘unfair’ says engineer

Irish Times, April 15, 2015

An engineer opposed to a proposed wind farm in Co Meath claims the development has a “fundamentally unfair” planning procedure. He said there is no public involvement in the environmental-impact assessment.

John Callaghan fears the development of 46 turbines on land near his home at Kells, Co Meath, will adversely impact on the environment as well as the health and development of his autistic son.

His counsel Michael Cush argued that An Bord Pleanála decided the proposed development has “strategic infrastructural status”. This means a planning application can be made directly to the board with no public involvement in the carrying out of an environmental impact assessment. It is claimed this is inconsistent with EC directives aimed at the public having a say in the vital issue of assessing environmental impact.

One of the “really weird” aspects of Section 37A of the Planning and Development Act 2000 is that it gives “no guidance at all” as to what is considered to be of strategic and economic importance, he said.

Mr Callaghan, who studied renewable energy at postgraduate level, alleges the normal planning process is being “by-passed”. He has “grave concerns” about the impact of the proposed wind farm on his autistic son and family and on the local area, including wildlife, heritage and the cultural landscape, particularly archaeology, he said.

His son (7) with autism is very sensitive to noise and research indicates people with autism are afraid of visual dominance of wind turbines on the skyline, he said.

The proposed €240m Emlagh development is for 46 wind turbines, each up to 169m high with a power output of 2.5 to 3.5MW, on three clusters of land at Farragara, Castletownmoor and Ísealchríocha, near Kells.

Wind farm planning process excludes public, claims engineer

High Court hears claim proposed Co Meath farm will impact environment and health

It is alleged An Bord Pleanála decided the proposed development has “strategic infrastructural status” which means a planning application can be made directly to the board with no public involvement in the environmental-impact assessment

It is alleged An Bord Pleanála decided the proposed development has “strategic infrastructural status” which means a planning application can be made directly to the board with no public involvement in the environmental-impact assessment

 An engineer opposed to a proposed wind farm in Co Meath claims the development has a “fundamentally unfair” planning procedure. He said there is no public involvement in the environmental-impact assessment.
John Callaghan fears the development of 46 turbines on land near his home at Kells, Co Meath, will adversely impact on the environment as well as the health and development of his autistic son.

His counsel Michael Cush argued that An Bord Pleanála decided the proposed development has “strategic infrastructural status”. This means a planning application can be made directly to the board with no public involvement in the carrying out of an environmental impact assessment. It is claimed this is inconsistent with EC directives aimed at the public having a say in the vital issue of assessing environmental impact.

One of the “really weird” aspects of Section 37A of the Planning and Development Act 2000 is that it gives “no guidance at all” as to what is considered to be of strategic and economic importance, he said.

Mr Callaghan, who studied renewable energy at postgraduate level, alleges the normal planning process is being “by-passed”. He has “grave concerns” about the impact of the proposed wind farm on his autistic son and family and on the local area, including wildlife, heritage and the cultural landscape, particularly archaeology, he said.

His son (7) with autism is very sensitive to noise and research indicates people with autism are afraid of visual dominance of wind turbines on the skyline, he said.

The proposed €240m Emlagh development is for 46 wind turbines, each up to 169m high with a power output of 2.5 to 3.5MW, on three clusters of land at Farragara, Castletownmoor and Ísealchríocha, near Kells.

The developer claims the wind farm will generate substantial electricity for up to 30 years, create jobs and earn some €3.5 million for local projects over its lifetime.

The board is expected to give a decision soon on the planning application by North Meath Wind Farm Ltd (NMWF), whose majority shareholder is Element Power Ireland Ltd (Epil). Mr Callaghan’s case is against the board while Epil, Element Power Ireland and NMWF are notice parties.

Mr Callaghan claims the alleged by-passing of the normal planning process means the developer has plenty of opportunity to meet any concerns of the board while he, of limited resources, has just one opportunity to deal with matters within a specified time. The entire procedure is “fundamentally unfair” and he is concerned the “appropriate level of detachment” had not been applied by the board.

He claims Epil was formulating the much larger Greenwire Project but, when that could not proceed as intended due to decisions in other EU states, it was decided a “sub-set” proposal of the Greenwire project would be drafted and proceed to by-pass the normal planning process.

In an affidavit, Kevin O’Donovan, director of Epil and NMWF, said his side believed the proceedings were aimed at delaying the planning application for this development which must have permission in place by late 2015 to be completed in time to meet Ireland’s 2020 renewable-energy targets.

Epil wrote to the board last May seeking consultations about the development. There were two “pre-planning consultation meetings” and minutes of those were on the board’s file, he said.

A board inspector later put on file his report recommending the board determine the Emlagh development as a “strategic infrastructure development” and the board did that in September 2014.

Epil has developed some 45MW output of wind farms and hopes to create another 51MW in 2015, he said.

The case continues before Ms Justice Caroline Costello.

What’s the true cost of wind power? Plenty, says NEWSWEEK

Money from taxpayers into the pockets of wealthy developers, says Newsweek
Money from taxpayers into the pockets of wealthy developers, says Newsweek

What’s the True Cost of Wind Power?

Newsweek OPINION

By 4/11/15 at 5:22 PM

As consumers, we pay for electricity twice: once through our monthly electricity bill and a second time through taxes that finance massive subsidies for inefficient wind and other energy producers.

Most cost estimates for wind power disregard the heavy burden of these subsidies on U.S. taxpayers. But if Americans realized the full cost of generating energy from wind power, they would be less willing to foot the bill—because it’s more than most people think.

Over the past 35 years, wind energy—which supplies just 2 percent of U.S. electricity—has received $30 billion in federal subsidies and grants. These subsidies shield people from the uncomfortable truth of just how much wind power actually costs and transfer money from average taxpayers to wealthy wind farm owners, many of which are units of foreign companies.

Proponents tend to claim it costs as little as $59 to generate a megawatt-hour of electricity from wind. In reality, the true price tag is more than two and a half times that.

This represents a waste of resources that could be better spent by taxpayers themselves. Even the supposed environmental gains of relying more on wind power are dubious because of its unreliability—it doesn’t always blow—meaning a stable backup power source must always be online to take over during periods of calm.

But at the same time, the subsidies make the U.S. energy infrastructure more tenuous because the artificially cheap electricity prices push more reliable producers—including those needed as backup—out of the market. As we rely more on wind for our power and its inherent unreliability, the risk of blackouts grows. If that happens, the costs will really soar.

Read more of this article from Newsweek, here.

When wind power rises so do exports and electricity costs: Parker Gallant

Parker Gallant looks at five years of the Green Energy Act in Ontario, and what it has cost Ontario's electricity customers
Parker Gallant looks at five years of the Green Energy Act in Ontario, and what it has cost Ontario’s electricity customers

Wind output up, exports up, cost of electricity up— no coincidence

Five years ago, in 2009, George Smitherman, Minister of Energy during the McGuinty reign, rammed through the Ontario Legislature the Green Energy and Green Economy Act.  The Act ushered in the FIT (Feed In Tariff) and MicroFIT programs, attracting corporations from around the world who wanted the lucrative power contracts being let by the government-mandated Ontario Power Authority.

The result of the Act is now evident with huge chunks of rural Ontario covered with solar panels and spiked by 500-foot industrial wind turbines cranking out intermittent electricity, surplus to our demand, 99.9% of the time.

Early in 2010, the Independent Electricity System Operator (IESO) advised us of electricity generation    for Ontario by fuel type for 2009.  The headline in their press release stated: “Wind Power in Ontario Generates a New Record in 2009.” Wind produced 2.3 terawatt hours (TWh) or 1.6% of Ontario’s total demand of 139 TWh.   The same press release noted Ontario exported 15.1 TWh, and wind’s percentage of those exports was 15.2%.  The release also disclosed the average HOEP (hourly Ontario electricity price) for 2009 was $31.6 million per TWh, and the Global Adjustment (GA) $30.6 million/TWh.

That means, the costs of power generation (on average) were $60.2 million per/TWh.

Wind significant share of the loss

In 2009, Ontario exported 15.1 TWh generating revenue of $477.2 million (15.1 TWh x $31.6 million), but the TWh exported cost Ontario ratepayers $909 million (15.1 TWh X $60.2) — that means Ontario lost $432 million.  The cost of power production from wind was $283 million (2.3 TWh X $123 million/TWh), representing 65.5% of the losses on the exported TWh.

Fast forward five years to January 2015: IESO’s announcement indicated Ontario’s demand in 2014 was 139.8 TWh. Wind was 6.8 TWh, or 4% of all generation.  Exports grew to 19.1 TWh and wind’s percentage of exports shot up to 35.6%.   HOEP was $36 million/TWh and the GA jumped to $54.6 million/TWh, making the all-in-cost to Ontario’s ratepayers $90.6 million/TWh.   The cost to produce 19.1 TWh was $1,730 million (19.1 TWh X $90.6 million), and revenue generated from the sale was $688 million (19.1 TWh X $36 million). That left Ontario’s electricity ratepayers to pick up the $1.042 billion shortfall.  The cost for 6.8 TWh of wind was $836 million plus another $42 million1. for curtailed wind bringing its cost to $878 million, representing 84 % of export losses.

$4 billion

The all-in-cost of Ontario’s electricity generation jumped from 6.2 cents/kWh in 2009 to 9.06 cents/kWh in 2014, an increase of 46%. Ratepayers picked up an additional burden of $4,048 million for 139.8 TWh.

The extra .8 TWh (800 million kWh) Ontario ratepayers consumed in 2014 versus 2009 cost us over $4 billion or $5.06 per/kWh, much of it was caused by the push for renewable energy and the need to have back-up power plants for when the wind is not blowing or the sun isn’t shining.

Imagine how many subway stations or hospitals $4 billion might have built.

©Parker Gallant

April 13, 2015

What the Easter Bunny brought Ontario’s neighbours

Ontario goodies for somebody...just not you
Ontario goodies for somebody…just not you

Ontario’s ratepayers won’t care much for what the Easter Bunny delivered over the long weekend.

Over Friday, Saturday and Sunday on the weekend of April 3, 2015, the Independent Electricity System Operator (IESO) reported we exported 250,500 megawatt hours (MWh) of electricity to our friends and neighbours, but they gave us only $6.21 per/MWh for power that cost us at least $90 per/MWh to produce.

The exported power over those three days was equivalent to almost 24% of total Ontario Demand of 1,009,700 MWh.

On top of that, IESO indicated via their Planned Outage Report they constrained, spilled, idled or steamed-off another 238,000 MWh from a variety of generators which represented 23% of total Ontario Demand.  Between exports and the outage requirements, ratepayers picked up the tab for 488,000 MWh or 51% of power we didn’t have a demand for.

So, why are we all told to conserve more?

Wind over that weekend generated about 58,000 MWh and represented 23% of exports. The cost of production was $7.1 million ($123 per/MWh) for which we were paid $360K ($6.21 per/MWh) — that’s a loss of $6.7 million.

Ratepayers also picked up the cost of the other 192,500 MWh exported at a cost of $17.5 million and the constrained production at a cost of about $12 million.

$36 million in losses

In those three days, Ontario’s electricity customers paid for all this and saw no benefit. Yet we are obligated to pick up almost $36 million in losses.  Doing this every day would results in annual costs of $3 billion, with no benefit!

We need the Liberal government to tell the Easter Bunny to stay home next time and dole out the Easter treats to Ontario’s ratepayers and taxpayers, instead of our neighbours.

©Parker Gallant,

April 7, 2015

What $36 million would have paid for that the Liberals cut from the health budget:

  • As many as 250,000 cataract surgeries or
  • Salaries of 600 nurses for a full year or
  • Physiotherapy for 48,000 beds at retirement and nursing homes or
  • Up to 36 million diabetes daily test strips