Financial Post Tackles Ontario’s Energy Policy

The Ontario Liberal budget Thursday could be the last gasp of a decade-long governance disaster. It certainly should be. The current premier, Kathleen Wynne, was first elected as part of Dalton McGuinty’s Liberal sweep of the 2003 election. Ms. Wynne’s current trick is to distance herself from the past ten years of mismanagement, policy bungles, grotesque waste, pro-union pandering, tax-gouging, big spending green dirigisme.
As Ms. Wynne put it during questioning the other day over the rocketing cost of the Liberal government’s cancellation of two electricity- generating plants, “I didn’t have access to those financial parameters.” She wasn’t told. Didn’t ask. The cost of the power plant deals is now up to $600-million, money that served no purpose, vapourized for political reasons.

As Parker Gallant and others have documented over the years in this Ontario’s Power Trip series, the $600-million cost of the gas plant cancellations is also mere kilowatts of waste compared with the megawattage imbedded in the green energy extravaganza, a staggering explosion of misguided investment that now threatens to raise Ontario electricity rates to the highest in North America. At the same time, as Mr. Gallant outlines elsewhere on this page, the green energy program is eviscerating Ontario Power Generation, the government-owned electric producer whose value is being eroded by billions of dollars.

Parker Gallant and Scott Luft: Ontario Power Generation turning water into debt

Once a relatively successful Crown corporation slated for privatization, OPG is now a contracting enterprise. The company’s hydro, fossil fuel and nuclear generating stations worth billions of dollars to taxpayers are now being eviscerated by policies that are stripping the company of its revenues and income-generating potential. Revenues have plummeted, asset values are sinking. Rather than being ripe for privatization, OPG is now under scrutiny by rating agencies such as Standard & Poor’s warning of cash flow problems and eroding value.
OPG’s 2012 annual report shows revenues took another $230-million hit last year, continuing a decline that has cut the company’s total revenue by 22% or $1.35-billion since 2008…
The big lag on OPG’s earnings has been the unregulated hydroelectric segment. It contributed more than $500-million or 46% of OPG’s pre-tax generation in 2008. Now it loses money. The reason for the loss is simple: OPG’s non-regulated hydro-electric assets are the only significant generation in Ontario exposed to the market price of electricity, which has collapsed under the McGuinty Liberal green energy manipulations. OPG’s non-regulated generation has fallen by 31% since 2008, revenue by 58%.

Ross R. McKitrick and Kenneth P. Green: Ontario’s green disaster

…in a classic case of the law of unintended consequences, the GEA poses a risk of increasing air pollution levels. Wind power requires natural gas as a backup. If the province continues adding wind and gas power at a time when there is a surplus of generating capacity, it may render one of Ontario’s baseload nuclear plants superfluous. Taking a nuclear plant offline and replacing it with gas would leave us with higher overall emissions.
Ontario’s pursuit of windpower was particularly ill-considered because provincial demand tends to be out of phase with wind patterns. In Ontario, 80% of wind-power generation occurs when demand is so low that the entire output is surplus and must be dumped on the export market at a substantial loss. The province’s Auditor General estimates that Ontario has already lost close to $2-billion on surplus wind exports…

Green Energy Act Lawsuits / Minister plans to tweak Long-Term Energy Plan

Green Energy Act Lawsuits 

Minister plans to tweak Long-Term Energy Plan.

Over the past days, weeks, months and years much has been written about the Green Energy and Green Economy Act (Act) and how it has driven up Ontario’s cost of electricity, caused property values to fall, created health problems and also destroyed nature. The evidence has continued to mount that the Act has also created dissension in rural communities and caused neighbours to sue neighbours for leasing land to wind developers.

While those “neighbour against neighbour” lawsuits work their way through our judicial system, lurking in the background are other actions that potentially make the “gas plant” moves look cheap. The Province is being sued on several fronts as is the Federal Government! The latter is being sued under the North American Free Trade Agreement (NAFTA) due to provisions in the Act related to the requirement for local content, whereas the Province is being sued through the Provincial Courts for actions caused by their offshore wind “moratorium” and their rejigging of onshore contracts.

The largest lawsuit ($2.25 billion) against the Province was brought by Trillium Wind Power in respect to an offshore wind development for which it didn’t even have a contract with the Ontario Power Authority (OPA) but held a, “Applicant of Record” letter from the Ministry of Natural Resources (MNR). While an Ontario Court has struck down that lawsuit the company is reportedly appealing it.

In an article in the Toronto Star on February 15, 2013 the issue of the, on again, off again, moratorium on wind development in the Great Lakes is explored and it would appear that no early resolution is in sight on whether the moratorium will or will not be lifted. Studies completed by the MNR on offshore wind are not conclusive! As has been the case for the Liberals planning since first elected; they announce their policy and wait for the fallout! Logic suggests studies should be completed before a policy is developed but that appears to run counter to Liberal strategy.

Another lawsuit comes from Mesa Power Group LLC, on a NAFTA action which reportedly seeks $775 million. Mesa is T. Boone Picken’s renewable energy group which had three projects high on the list of future contracts before the OPA rejigged it. Picken’s Mesa rushed to Ontario with his “GE” pre-ordered turbines, perhaps hoping to unload them after he shelved his big Texas wind development. He used Leader Resources of Kincardine, Ontario, as his Canadian arm (American Wind Alliance) to gain traction under the GEA. Mesa’s action claims favourtism was granted to Samsung under the contract that George Smitherman, former Minister of Energy, reputedly negotiated. How this one will play out is an unknown but it is before the United Nations Commission on International Trade Law (UNCITRAL) and Canada is required to defend this action on behalf of the Province.

Have those lawsuits and NAFTA challenges resulted in the need to rework the Long-Term Energy Plan?  Robert Hornung, President of CanWEA (Canadian Wind Energy Association) would appear to think so and was reported (TorStar article) as saying: “the province is reviewing (writer’s emphasis) its long term energy plan this year, and hopes off-shore wind farms can be part of the review.”

A contact with Energy Minister Bob Chiarelli’s office about a month after the Hornung quote however got this response from an Energy Ministry spokesperson;

“You noted in your email that Mr. Hornung of CanWEA indicated in a newspaper article that “the province is reviewing its long term energy plan this year”. At this point the Ministry of Energy has not indicated to the public any intent to undertake a review of the Long Term Energy Plan.” 

Following this e-mail, Minister Chiarelli was on CFRA radio (Ottawa) April 11th and during the interview he made the statement that the “Long Term Energy Plan” will be reviewed this year. Again, on April 16, 2013 Minister Chiarelli at the “Power Conference” in Toronto, was the keynote speaker, and repeated that the Long Term Energy Plan; prepared by the Ministry of Energy; when Brad Duguid held the Minister’s position; was going to be reviewed.  It makes one wonder who’s in charge of the electricity sector—the Minister or CanWEA!

While details on the above legal actions can be found though an internet search, the best information available is in respect to Windstream Energy LLC who actually had a contract from the OPA to erect a 300 MW project in Lake Ontario called; Windstream Wolfe Island Shoals Inc. (WWIS). The moratorium on offshore wind scuttled those plans for Windstream and the result is their action filed under Articles 1116, 1117 and 1120 of NAFTA.  The arbitration filing (late January, 2013) with the Government of Canada; by Windstream’s counsel contains information related to the WWIS project that reflects on; how the project came about, who is behind it, the anticipated revenue stream, etc. The filing contains history surrounding the creation of the Act and bits of press releases and quotations that dominated Queen’s Park hyperbola at that time. Here is a taste of what is found in the filing:

“Government of Ontario representatives stated repeatedly that a primary purpose of the Green Energy Act was to create certainty for investors to invest in renewable power in Ontario and thereby create jobs — more than 50,000 new jobs between 2009 and 2012. Ontario’s Minister of Energy and Infrastructure George Smitherman, speaking on February 20, 2009 to the Toronto Board of Trade, stated that the Green Energy Act,
… will make the province the destination of choice for green power developers, and incent proponents large and small to develop projects by offering an attractive price for renewable energy AND the certainty that creates an attractive investment climate.

Certainty that we will purchase the power at a fair price.
Certainty that we will get the power connected to the grid.
Certainty that government will issue permits in a timely way.”

In this document you discover that the party (Ian Baines) responsible for bringing us the TransAlta Wolfe Island wind development “leads the activities of Windstream and its investments in Ontario,”. The Wolfe Island wind development with 197.6 MW of nameplate capacity has the reputation of having the 2nd highest kill rate of birds and bats (per MW of installed capacity) in North America but recent testimony by a qualified ornithology expert at the Environmental Review Tribunal on Ostrander Point ranks it higher. The testimony heard by the ERT was that “had the carcass search area for Wolfe Island been the same as the wind development with the # 1 ranking Wolfe Island would have surpassed it by a considerable margin.”

Now that is some testimonial both to Mr. Baines and the Act!

Further on in the NAFTA filed document, the authors claim that the WWIS project would have generated “approximately CDN $5.1 billion in revenue.” over the 20 year FIT Contract Period ($255 million per annum). When the OPA signed the contract the FIT rate for off shore wind was $190 per megawatt hour (MWh), inferring the 300 MW of nameplate capacity was expected to generate 1,342,000 MWh. Now if you calculate what 300 MW would produce at say, 100% of capacity the result would be about 2.6 million MWh so the claim proposes that this wind development would have consistently produced at the rate of about 51% of its capacity. It would appear that Mr. Baines was shooting for another record but the document notes that proper “wind testing” was never carried out so the 51% (of capacity) required to produce the $5.1 billion dollars in revenue was never verified or may not be even close to actual output if erected. It is also not clear that there is any built in allowance for maintenance, and the penchant of wind turbines to age quicker then claimed.

The damage claim against the taxpayers of Canada submitted by the Bay Street law firm are for; “at least CDN$475,230,000, including for lost profits and other damages incurred as a result of the moratorium and related measures”.  While the document claims the investment that was to be made was $1.5 billion it is not clear how much Windstream had incurred by way of sunk costs and it will be interesting to see if the UNCITRAL arbitration goes all the way to covering those “lost profits” but as a Canadian taxpayer one would hope it turns out to be a fraction of their claim.

So in summary; those three (3) law suits alone total $3.5 billion dollars or about three times the estimated cost of the gas plant moves.

No matter what the settlement by the Province or the Federal government for any or all of these lawsuits we should expect a press release from the Ontario Ministry of Energy’s office (assuming the Liberals remain in power) saying something akin to; “it will only cost the ______ (fill in blank with ratepayer or taxpayer) of Ontario____ (fill in blank) millions to settle”.  Those settlement amounts will be added to our electricity bills or our Provincial debt (or our Federal debt) and the value to the ratepayer/taxpayers will be nothing.

In the event Minister Chiarelli tweaks the FIT program to allow offshore wind it will perhaps make one of those NAFTA lawsuits disappear however the effect will be to increase electricity prices on the backs of all of Ontario’s ratepayers to satisfy the frivolous Liberal concepts of how Ontarians should generate and pay for electricity.

Even if all of the lawsuits disappear, history will confirm it was simply another part of the boondoggle on the Ontario taxpayers or ratepayers the Liberal Energy portfolio achieved!

Parker Gallant
April 26, 2013

Ramping up the Rhetoric

The pro-wind environmental not-for profits (ENGO) and related charities have had a rough time of late, what with the Fraser Institute Report, the Don Dewees, University of Toronto report; “Renewable Energy just too costly”, a wind turbine fire in Goderich, removing an eagles nest, etc., etc.

The foregoing, coupled with the recently announced price increases on our electricity bills come May 1st and the ongoing inquiry on the gas plant moves, simply underscores the mess the Liberals have created in Ontario’s electricity sector. The mess can be laid at the doorstep of the ENGOs who sold the Liberals on the concepts of renewable energy’s ability to save us all from “global warming”. The ENGOs were supported by the extensive group of lobbyists acting for the 400 plus foreign and local corporate members of CanWEA lining up to take the generous FIT subsidies created by the Green Energy and Green Economy Act (GEA).

In light of all this recent bad news the ENGOs have ramped up their efforts to stave off their failing green energy push though what appears to be an orchestrated effort to sway public opinion as the lemmings turn away from the cliff.  The Financial Post today has a letter from John Bennett, Executive Director of the Sierra Club kind of agreeing with Don Dewees (a former Director of the Sierra Club) but once again blaming nuclear cost overruns (Author’s note: caused by political interference) and also stating that “There are several thousand people doing jobs in green energy”. Just a few days ago Bob Chiarelli, the Minister of Energy told the Power Conference that green energy had “created 31,000 jobs”. So which is it?  Neither the Minister nor Mr. Bennett can point to the jobs created nor do they acknowledge how many jobs have been lost because of high electricity prices.

Another, previously unheard of individual, the Reverend Bob Oliphant, President and CEO of the Asthma Society of Canada, (ASC) has taken to writing letters to various rural newspapers using a “Dr.” designation when in reality he has a doctorate in religious studies. Twisting the truth by using false “medical” designations is not new as Gideon Forman of the Canadian Association of Physicians (CAPE) has also allowed the “Dr.” designation to be used in his role as the Executive Director. Recently Forman has ramped up his rhetoric by posting about the wonders of offshore wind which perhaps is meant to frame himself with even more qualifications?

Another group “Friends of Wind”; an offshoot of CanWEA; also ramped up their efforts as they are obviously concerned that the NDP may eventually support the Ontario Conservatives to place a moratorium on wind development.  Friends of Wind’s website recently encouraged their followers to write their MPP in order to defeat MPP Lisa Thompson’s Bill 39.  They were successful as the NDP, led by Peter Tabuns, MPP for Toronto Danforth (still acts like he is the Executive Director of Greenpeace), joined with the Liberals in the Legislature to defeat the Thompson Bill.  NDP MPP Tabuns apparently feels its bad when the Liberals move gas plants and cost taxpayers money but it is OK to continue his support of the Liberals and the GEA which is draining billions from those same pockets. Hypocrisy thy name is NDP!

Friends of Wind is also supported by the County Sustainability Group of Prince Edward County (PEC) which appears to consist of a few members led by Don Chisholm who wrote a laudatory diatribe about the reputed founder of the Friends of Wind, Jutta Splettstoesser.  Jutta is a director of the Ontario Sustainable Energy Association (OSEA) and a past CanWEA award winner. The County Sustainability Group are supporting the erection of industrial wind turbines in PEC; joining Gilead Power and the Ministry of the Environment to place those IWTs in an important bird area. Neither of these groups disclose where their money comes from or how many members they have, but this writer suspects the latter could be counted using only my remaining digits. I’m not sure about the former!

Also on the attack was David Suzuki (we are all maggots) who posted an article in Huffington Post that claims no health effects from IWTs and cites faulty and discredited studies produced by pro-wind advocates like the recent Simon Chapman report out of Austraila. He also credits the Canadian Medical Association for their report on deaths (21,000 premature) and illnesses (92,000 emergency room visits plus 620,000 visits to a doctor’s office) caused by air pollution and cites a study from the Pembina Institute claiming $300 million in health costs caused by electricity production in Alberta from burning coal.  Two of the organizations behind that report were (surprise) the ASC and CAPE.  The Oak Foundation of Geneva, Switzerland, provided the bulk of the funding for the Pembina report. NB: The Oak Foundation provided US$404K in 2012 to Pembina for “environmentally responsible tar sands development”.  The computer modeling used in the CMA and Pembina reports appears to be one developed by DSS Management Consultants (DSS).

DSS/RWDI Air Inc. brought us the 2005 DSS study for the Ministry of Energy that is the document Liberal MPPs cite continuously, but has no reference to wind or solar as a means to generate clean energy and had this caveat buried in the report.

“In actual fact, it is impossible to identify which specific deaths that occur over a given period of time are actually attributable to air pollution. Air pollution is a contributory factor in a multitude of deaths and is almost never the overriding or irrefutable single cause of death.”

Just as Suzuki cited the Chapman report which concluded that wind turbine sickness is spread by word of mouth so does OSEA and Environmental Defence. The Chapman report has been dumped on by many in the medical profession (Chapman is a sociologist) because it lacks the credibility of actual research with the people who claim health problems due to living in proximity to IWTs. That omission hasn’t stopped the ENGOs or CanWEA from making sure it gets more media attention then it deserves. When you are having a bad day I guess you want to lash out and blame others and that is exactly what we are seeing.

On the economic side it is disheartening to see John Spears of the Toronto Star picking up where Tyler Hamilton left off (former “greenie” TorStar writer) by citing statistics that claim the price of electricity is rising because of nuclear and gas costs. The Navigant report he mentions in his recent article reported that in 2012 only 17% of the Global Adjustment (GA) cost (about $1.1 billion) was caused by renewable energy (wind, solar and biomass). He fails to note non-hydro renewables only produced 3.9% (consumer cost of $300 million) of the 151.8 terawatts generated in the Province for a GA cost that is 4 times the cost of other production. Surprisingly the article was carried in the business section.

With that kind of biased reporting from the Star and the push-back from the ENGOs we will have trouble waking up Premier Wynne and her minions or convincing Andrea Horwath that Tabuns doesn’t give a damn about the little guy!

In the Liberal and NDP minds it appears rhetoric trumps economic and common sense.

Parker Gallant,

April 19, 2013

Parker Gallant: Ontario Power Conference Notes

Speaking Notes: Ontario Power Conference April 16, 2013 

NB: Highlights of Minister Chiarelli’s Keynote Speech Follow below my presentation. 

Examining the Politices of Energy: An Exploration of Competing Visions of Ontario Energy Policy

1.  Parker Gallant: more background:

a) Self appointed guru – former Energy Minister
b) “Parker Gallant knows nothing” – tweet from one of the authors of the GEA
c) Threatened by a lawsuit from well known founder of several Environmental Not-for profits and charities supported by a myriad of Provincial entities.
d) Director of Wind Concerns Ontario fighting poorly sited industrial wind projects.

2.  I am personally against industrial wind turbines. Generating electricity from wind is old technology invented by John Blyth of Scotland in the late 1800s. It didn’t work well then and it still doesn’t!

I, and Wind Concerns Ontario, are on the side of rural communities who are suffering the consequences of the GEA which has taken away democratic rights in respect to the ability of rural municipalities to plan for their community-about 90 municipalities have passed “not a willing host bylaws” and notified the Premier of that.

I believe wind turbines do affect people’s health, decrease property values, kill birds and bats and put certain species at risk.

I believe wind turbines will continue to drive up electricity prices causing job losses and

I believe they have done nothing to reduce emissions.

I find it strange that the people in the rural communities must use their own resources (money) to fight Renewable Energy Approvals issued by the Ministry of the Environment via an ERT while their tax dollars are used to fight them. 

I don’t understand why politicians feel the need to interfere with the electricity sector. The entities that exist to generate, transmit and distribute electricity in the past have generally done a pretty good job at producing the power we need at prices that were very competitive and attracted industry of all stripes to the province. It doesn’t seem to matter what politicial party the politicians come from. When the party achieves power it seems to have this need to muddle where they don’t have an understanding or knowledge about the electricity system.

The Electricty sector seldom gets high profile in any runup to an election except from the Green Party (global warming) but it probably will in the next election because of the increase in pricing and the rural objections to IWTs.

If you go back in time, Bill Davis stopped and started the Darlington Nuclear build three times and we could probably point to $6 billion or more of the cost overruns that those delays caused through interest accumulation, staff training, etc.

Bob Rae appointed Maurice Strong as Chair of Ontario Hydro and Strong proceeded to decimate the institution, reducing staff, stopping development which eventually caused a shortage of power for the province.

Harris tried valiantly to privatize parts of the sector but then along came his successor Eves who froze prices; perhaps for similar reasons to the gas plant moves and put an end to the Harris plans. Yesterday we heard from the AG about one of those moves and it turns out we will eventually wind up with a gas plant that will be ready to back up intermittent wind and solar but at a ridiculous cost. Long term planning was an issue that the Liberals originally touted in the Legislature and supposedly brought to the table on this portfolio. So what happened?

When the Liberals were elected in 2003 the one smart thing they did was take the freeze off the electricity prices but then as they say; disaster struck. What started as a modest experiment to add small amounts of renewables to the grid (at reasonable prices) while instructing their new creation; the Ontario Power Authority; to do some long term planning they appointed George Smitherman as Energy Minister. He turned the sector on its head! Right after his appointment Smitherman tripped though Europe quickly with his hand held by some greenie who convinced him Ontario should go all out for renewables like Denmark, Germany, Spain and Portugal. Smitherman tossed the long term plan and today we find ourselves with the highest electricity prices in Canada and verging on the highest in North America despite having clean hydro and clean nuclear that on most days can satisfy our demand.

My personal opinion is that politicians that occupy the Energy Ministry portfolio should be acting as overseers, and stop thinking they are experts. We have thousands of well qualified people running our publicly owned electricity sector and it should be the Minister’s responsibility to ensure they remain competent or he should fire them. The 2003 blackout wasn’t Ontario’s fault but they keep insisting it was.

Ontario now has one of the most convoluted energy sectors in the world. What exactly is a “Global Adjustment” supposed to be; because it is not global-its a “made in Ontario noun”! It seems that it was simply created to somehow deflect the political interference we have seen over the past 9 years—blame it on the rest of the world-make it global!

We must stop the nepotisism in the system and we must stop the politicians from thinking they know best. Let the politicians focus on ensuring the system is functioning properly, give the OEB back their regulatory powers and stop issuing directives when you come up with a brainstorm! No directive should ever be issued by any future Energy Minister without a cost/benefit study as pointed out in the Auditor General’s report of 2011.

If you must appoint someone to run one of the publically owned electricity sector companies base the appointment on competence not on an ideology defined by Bob Dole or David Suzuki or Hermann Scheer.

Thank you!

Parker Gallant

Minister Chiarelli’s speech to the CI Power Conference April 16, 2013

Minister of Energy Chiarelli was the keynote speaker at the CI Power Conference today and during his speech he delivered the following main messages:

  • 31,000 jobs have been created by the GEA 
  • peak consumption is down by 1900 MW 
  • the Long Term Energy Plan will be reviewed by the OPA and the report issued within the next 6 months 
  • all Ontarians will be able to comment via the web and they are looking for feedback on the “supply mix”, “conservation” and the “predictability of the clean energy process” 

The Minister also spoke to how the NEW Liberal government want to “mitigate rate increases” with “affordable energy” and to the NEW government’s commitment to let municipalities pick and choose on generation projects.

I (Parker Gallant) have requested a copy of Minister Chiarelli’s directive to the Ontario Power Authority in respect to the review of the Long Term Energy Plan.

CanWEA: Locked and Loaded

The Canadian Wind Energy Association (CanWEA) were prepared for the Fraser Institute’s report of April 11, 2013 as within hours of the release of that report they issued a press release headlined “Wind energy a good deal for Ontario” which attempts to dispute the findings of the Fraser report.

CanWEA’s secret weapon was prepared by Power Advisory LLC whose Canadian subsidary is headed up by Jason Chee-Aloy, a former employee of the Ontario Power Authority (OPA) where he was the Director of Generation Procurement. A couple of earlier articles had explored the “conflict of interest” issues surrounding his position with Power Advisory LLC as their client list included OPA wind contract holders; Samsung, NexTera, Pattern and IPR-GDF North Suez. Contact with the Office of the Integrity Commissioner and the Lobbyist Registry, at that time, disclosed the former couldn’t do anything because the OPA wasn’t on their list of Provincial entities their Act governed nor were Power Advisory registered on the Province’s Lobbyist Registry. As of yesterday they still appear unregistered.

The Power Advisory report prepared for CanWEA is dated February 15, 2013 and was obviously the secret weapon held by them to dispute upcoming reports that might prove (as the Fraser report does) that wind generation is a useless and expensive way to generate electricity in Ontario; doing harm to humans, nature, destroying property values and producing power when we don’t need it (80% of the time).
The unleashing of the CanWEA secret weapon to counter the Fraser Institute’s report does nothing to dispel the principal facts as it simply looks at electricity generated by industrial wind turbines (IWT) in isolation claiming the production of wind energy represents only 5% of total supply costs on an average Burlington Hydro ratepayer’s bill.

What the Power Advisory report doesn’t refer to are the effects caused by the addition of wind generation to the grid that were highlighted by the Fraser Institute report. The Power Advisory report fails to note that wind requires backup from gas plants (which are paid to not produce), spilling of cheap clean hydro when wind produces power we don’t need (depleting revenue to OPG) , steaming off of nuclear plants (which are also paid to not produce), the expenditure on transmission lines to hook up IWTs and of course the costs of exporting excess generation. Wind’s costs, including the foregoing would easily double what their report claims without considering the other destructive attributes of IWTs.

The Power Advisory report is nothing more then the same old smoke and mirrors that the Liberal politicians have accepted as gospel.

CanWEA’s secret weapon only serves to bring out the fallacious nature of their spin about IWTs and undermines their cause but it presumably gives the Energy Minister some talking points in the Legislature.

Parker Gallant,
April 12, 2013

OPG Sinking Slowly: The numbers tell the tale

While the current Liberal Government in Ontario seems to simply adore Hydro One as pointed out in a previous article they seem to be bent on grinding OPG into the dust, or perhaps its their unmitigated love of wind and solar generated energy that is causing OPG’s slow demise.

In an effort to try and grasp what has happened to OPG one needs to go back to 2005 which reflects the time when we were all promised that the new Liberal created Ontario Power Authority (OPA) would develop an Integrated Power System Plan (IPSP). Time passed and the Liberals rejected the original IPSP and came up with their version, instigated by the Green Energy and Economy Act (GEA) and putting the emphasis on wind and solar generation. The incredible subsidies handed out by the OPA created the gold rush to Ontario to sign those wind and solar contracts. Coincidentally Ontario’s move to subsidize wind and solar generation was about the time subsidy programs were being abandoned by the rest of the world (the USA being the other exception).

If one looks back to those 2005 OPG results you find at that time, they were responsible for generating 108.5 terrawatts (TWh) or 68.8 % of consumption and 76.7% of total generation (Ontario inported 11 TWh in 2005) versus the 83.7 TWh they generated and sold in 2012. OPG’s 2012 production was a 22.9% drop from 2005 and the 83.7 TWh OPG produced, represented 59.4% of what we consumed. Factoring in what Ontario exported (14.6 TW) in excess generation, OPG produced only 55.3% of total generation. To put that in further perspective; 2005 was a hot dry summer which impacted hydro production and resulted in hydro generation falling to 34 TWh from the prior years level of 37.8 TWh.  In 2012 hydro production was only 33.8 TWh despite it being a relatively good year for water flows. On the latter we suspect that OPG was instructed to spill hydro during the times wind and solar were producing electricity surplus to Ontario’s needs but that information is not made available in the public domain.
Now if you look at the prices that OPG received (on average) for their 2005 production, it was 4.9 cents per kWh or $49 million per TWh so the revenue generated would have been approximately $5.3 billion. In 2012 OPG received 5.1 cents per kWh which is a jump of only 4% over that 7 years. The 2012 generation of 83.9 TWh therefore generated total revenues of about $4.3 billion. The net result is that production fell by 24.8 TWh or 22.9% and revenue dropped by $1 bllion or 18.9%.

Based on the nominal growth in revenue per kWh that OPG received since 2005, 2012 should have been good for consumers as the 4% increase that OPG received should have tempered any electricity price increases but that is not what happened. Over that same period of time the average price charged to the consumer for electricity jumped from 5.2 cents per kWh in 2005 to an average of 8.0 cents for 2012. The difference of 2.8 cents per kWh meant the ratepayers in Ontario saw the price of electricity jump significantly (53.8%), exceeding both inflation and what OPG received. In 2005 the consumer only paid .1 cent more per kWh for OPG’s production but by 2012 the difference had jumped to 2.9 cents or 55.8%, meaning OPGs ability to temper price increases fell in a meaningful way.

OPG’s production held down the price of electricity in 2005! As more wind, solar and gas generation (to back up wind and solar) have been added to the Ontario grid, OPG is playing less of a role in keeping that price down. As all the additional wind and solar planned (together with the additional cost of the gas plants) by the Energy Ministry are added over the next few years, and as OPG’s role shrinks, Ontarians will continue to see rising prices. OPG’s production in 2012 was 95% CO2 free meaning the last 5% of CO2 emissions that the Liberal Government want to eliminate will cost the ratepayers billions of dollars and those emissions will be replaced by similar emissions from gas plants.

While OPG will shortly wind up producing no CO2 the costs to the ratepayers will mean extracting billions of dollars from their wallets to pay for wind, solar and gas subsidies and will further shrink OPG and its value to the Province.

The Government seems determined to provide a McGuinty/Wynne legacy (“Today, all Ontarians can breathe a little easier,” said Ontario Premier Dalton McGuinty in a statement on January 10, 2013) that will cost ratepayers billions in hard earned dollars and cause OPG to shrink even more. Some plan, some legacy!

Parker Gallant,
April 4, 2013

Industrial Wind Turbines – Watershed Magazine

Since being posted to our Facebook page earlier, as recommended by CCSAGE‘s Gary Mooney, it’s been recommended to get this article referenced on the blog too

Industrial Wind Turbines – Watershed Magazine:

It starts with an unfamiliar car in the driveway. Two people get out and approach your farmhouse. They knock, you open. “We’re interested in doing a study on the feasibility of wind turbines here,” says the taller one. “There’s no commitment,” adds the other, following a well-rehearsed script. Just like the travelling salesmen of yore, the Fuller Brush man or the FilterQueen vacuum guy, these folks have something to sell, a proposal – you can do your bit for the planet and make a little green while you’re at it. What’s not to like?
You invite them in to hear more, offer them coffee while you sit around your kitchen table, listen with interest as they lay out the numbers: $12,000 per year minimum per turbine and maybe as much as $18,000. You picture five slender poles with blades glinting in the sunlight and do the mental arithmetic: 60 to 90 grand a year for letting them use your land? Sure beats sitting on a tractor for 12 hours a day.

Problem is, they’re not slender poles, they’re industrial behemoths, five metres wide at the base, 100 metres tall to the hub with blades half again as high – 150 metres from toe to tip, as tall as a 40-storey building. In skimming the fine print, you also missed the part about the potential health and environmental impacts of turbines, and breezed past the language about not talking to anyone about the deal.
But you don’t realize this till later, after you’ve signed the lease, and by then your neighbours have stopped speaking to you and have formed a group to stop the wind project with whatever it takes, including filing a lawsuit, contacting reporters and meeting with local councillors and MPPs.

Continue reading at Watershed Magazine:



Date: March 18, 2013

Reference: ERT Case Nos. 13-002/13-003

We wish to thank the Tribunal for the opportunity to present our views on the issuing of the REA Number 7681-8UAKR7 to Ostrander Point GP Inc. as a general partner for and on behalf of Ostrander Point Wind Energy LP.

As noted in our submissions, we have focused our support on the appeal launched by the Prince Edward County Field Naturalists (PECFN) and in particular on the potential harm to various species of bats as described in the “Ostrander Point Wind Energy Park Acoustic Bat Monitoring Report.”

We note the aforementioned report identified eight (8) species of bats regularly known to occur in Ontario, all of which have a range that overlaps the “Study Area.”

Seven of these species were also identified in a “review” completed by scientists Kunz, Arnett, Erickson et al and published by the Ecological Society of America.1 The review is titled “Ecological impacts of wind energy development on bats, questions, research needs, and hypotheses” and raises concerns about the large number of bat fatalities at industrial wind facilities and made this poignant observation:

The unexpectedly large number of migratory tree bats being killed by wind turbines and the projected cumulative fatalities in the Mid-Atlantic Highlands should be a wake-up call for those who promote wind energy as being “green” or environmentally friendly.

The review of 14 pages includes several graphs containing data associated with the bat fatalities as gathered by leading experts throughout the US, and notes several hypotheses that may be the ultimate cause of those fatalities. I quote from the document:

Some migratory species are known to seek the nearest available trees as daylight approaches (Cryan and Brown in press), and thus could mistake large monopoles for roost trees (Ahlén 2003; Hensen 2004). Tree-roosting bats, in particular, often seek refuge in tall trees (Pierson 1998; Kunz and Lumsden 2003; Barclay and Kurta 2007). As wind turbines continue to increase in height, bats that migrate or forage at higher altitudes may be at increased risk (Barclay et al. 2007).


Are bats attracted to sites that provide rich foraging habitats? Modifications of landscapes during installation of wind energy facilities, including the construction of roads and power-line corridors, and removal of trees to create clearings (usually 0.5–2.0 ha) around each turbine site may create favorable conditions for the aerial insects upon which most insectivorous bats feed (Grindal and Brigham 1998; Hensen 2004). Thus, bats that migrate, commute, or forage along linear landscapes (Limpens and Kapteyn 1991; Verboom and Spoelstra 1999; Hensen 2004; Menzel et al. 2005) may be at increased risk of encountering and being killed by wind turbines.


Are bats attracted to the sounds produced by wind turbines? Some bat species are known to orient toward distant audible sounds (Buchler and Childs 1981), so it is possible that they are attracted to the swishing sounds produced by the rotating blades. Alternatively, bats may become acoustically disoriented upon encountering these structures during migration or feeding.


Bats may also be attracted to the ultrasonic noise produced by turbines (Schmidt and Jermann 1986). Observations using thermal infrared imaging of flight activity of bats at wind energy facilities suggest that they do fly (and feed) in close proximity to wind turbines (Ahlén 2003; Horn et al. 2007; Figure 3).


Wind turbines are also known to produce complex electromagnetic fields in the vicinity of nacelles. Given that some bats have receptors that are sensitive to magnetic fields (Buchler and Wasilewski 1985; Holland et al. 2006), interference with perception in these receptors may increase the risk of being killed by rotating turbine blades.


Bats flying in the vicinity of turbines may also become trapped in blade-tip vortices (Figure 4) and experience rapid decompression due to changes in atmospheric pressure as the turbine blades rotate downward. Some bats killed at wind turbines have shown no sign of external injury, but evidence of internal tissue damage is consistent with decompression (Dürr and Bach 2004; Hensen 2004).


Interestingly, the highest bat fatalities occur on nights when wind speed is low (< 6 m s–1), which is when aerial insects are most active (Ahlén 2003; Fiedler 2004; Hensen 2004; Arnett 2005).

The latter text leads us to the “Reply Witness Statement of Erin Cotnam,” dated March 1, 2013 delivered to the appellants PECFN and APPEC and participant Wind Concerns Ontario by Ms. Davis, counsel for the Ministry of the Environment on the first day of the commencement of the ERT hearing, and to the “Acoustic Bat Monitoring Report” prepared by Stantec for Gilead Power Corporation of Peterborough, Ontario.

The Reply Witness Statement of Erin Cotnam responded to the WCO written presentation among others; we will focus only on the comments related to WCO which were contained in Cotnam’s points 2 through 6. Erin Cotnam responded as follows: Point 2 referred to WCO’s question about conflicting information on the equipment identified in the Renewable Energy Application, specifically that both Enercon and GE turbines are specified, though the equipment types are not the same.

In Point 3, Ms. Cotnam says: “The acoustic monitoring of bats completed by Stantec was not a necessary component of the Natural Heritage Assessment. It was completed under the earlier environmental assessment process.”

Point 4 of Ms. Cotnam’s “Statement” continues: “Under the Natural Heritage Assessment, significant wildlife habitat is not assessed or determined on specifications for wind power generating equipment.

On the latter point Ms. Cotnam is correct, as a review of the “Natural Heritage Assessment Guide” indicates that equipment means nothing in respect to the need to explain, as an example, the different kill rates of birds and bats from a 50-kW wind turbine with a 19.2-meter (63 feet) rotor diameter versus a GE xl 2.5MW wind turbine with a 103-meter (337 feet) rotor diameter.

What the MNR “guidelines” effectively do, then, is suggest that a blade sweep that covers approximately 4,500 square feet will harm/kill/harass the same number of birds and bats as a blade sweep that covers more than 126,000 square feet.
We question this assertion and the logic behind it.

Returning to the remaining text of Ms. Cotnam’s “Witness Statement” we note that point 4 continues with the following:

An applicant is required to complete a site investigation within 120M of project location, including wind turbines. A site investigation was completed for the Site, which involved an Ecological Land Classification assessment to determine if the Site would support bat habitat and a search for potential roost trees and hibernacula. No candidate bat habitat (maternity roosts or hibernacula) were identified. Therefore an Evaluation of Significance was not required.

Once again Cotnam’s statement is correct as she refers to the 25-page MNR document dated July 2011, “Bats and Bat Habitats: Guidelines for Wind Power Projects” with reference to page 6, Section 2.2. The presumed assumption by the authors of this “Guideline” is that 120 meters (393 feet) is more than sufficient to locate a bat roost; this is based on the questionable assumption that bats will not fly further from the roost to feed than 120 meters.

However, the fact is that even the little brown bat (one of the eight species identified in the aforementioned Ostrander Point Wind Energy Acoustic Bat Monitoring Report) may travel several kilometers between day roosts and feeding sites, as noted by the University of Michigan, among others.

Further, the MNR guidelines also fail to recognize that three (3) of the bat species (hoary bat, silver-haired bat, and red bat) identified in the monitoring report prepared by Stantec, migrate in the Spring and Fall, and as noted above in the material quoted from the Ecological Society of America, will seek “large monopoles” as roosts as daylight approaches. In fact, migrating bats are known to travel distances as great as 500 km,2so to imagine they wouldn’t travel more than 120 meters to find food is not realistic.

We also note that the Stantec-prepared monitoring report does not include any monitoring during the “spring” migration period as it relates to bats. The MNR Guidelines document states that, “In Ontario, the post-construction monitoring season for bats is based on bat activity patterns, covering spring activity through fall swarming and migration, and is consistent with the post-construction monitoring season for birds; thus monitoring occurs from May 1 to October 31.”
The Ministry of Natural Resources’ own fact sheet on bats in Ontario notes that bats hibernate from September to April, thus May is a critical month for monitoring bat activity.3
Indeed, the first draft report on bat monitoring in the subject area prepared by Stantec in 20094 says that, “Based on a site sensitivity rating of Level 3 (High), a pre-construction monitoring program was designed that consisted of: Radar monitoring in May, August, September and October; and, Acoustic surveys at three stations within the Study Area in July, August and September.”
However, in the final draft report released in January 2010, Stantec states, “Based on a site sensitivity rating of Level 3 (High), a pre-construction monitoring program was designed and approved by the MNR that consisted of acoustic monitoring at four stations within the Study Area in July, August and September.” In other words, in the final draft report on bat activity, the month of May was omitted.

WCO also notes that under circumstances where a “local conservation authority” exists the process for the issuance of an REA requires the input of that “local conservation authority” when it involves “wetlands” or alteration in and in the case of Prince Edward County the local authority is the Quinte Conservation Authority. The MNR guidelines describe the local input requirement as follows:

1.4.1 Conservation Authority Permissions
Renewable energy projects may require permission from the local conservation authority (where one exists). Through conservation authorities’ Development, Interference and Alteration Regulations, under Section 28 of the Conservation Authorities Act, conservation authorities are empowered to regulate development and activities in or adjacent to wetlands, river or stream valleys, watercourses, Great Lakes and large inland lakes shorelines and hazardous lands.”

WCO’s contact with the Quite Region Conservation Authority confirmed that they were contacted in 2008 by “Gilead” and responded that as Ostrander Point was “crown land” and protected; Gilead would need to confer with the Provincial authorities. The spokesperson for the Authority advised us that the Province has not sought input nor consulted with the local Quinte Region Conservation Authority nor has it been contacted as a courtesy by the Ministry of Natural Resources or the Environment Ministry to offer their views on the issuance of the REA.

Related to the foregoing the Stantec “Bat Monitoring Report” prepared for Gilead contained the following;

Permanent wetlands, in the form of deciduous swamp and open marsh, occur along the southeastern boundary of the Study Area.

and the Natural Heritage Assessment Guide for Renewable Energy Projects has this embedded in its 100 pages:

Development prohibitions are outlined in Part V, Sections 37, 38, 41, 42, and 43 of the REA Regulation4
Tables 2, 3, and 4 detail natural features protected under the REA Regulation and their specific
development prohibitions, as well as the development prohibitions which apply to provincial parks and conservation reserves. When two or more natural features overlap, the greater development prohibition applies.

Applicants may seek an exception from the prohibitions, in order to develop within significant or
provincially significant natural features (with the exception of provincially significant southern wetlands and provincially significant coastal wetlands) and within their setbacks, provided an EIS is prepared in accordance with procedures established by MNR (Section 7).”

It would appear that despite the fact that the MNR has very strictguidelines that apply to wetlands; in the case of the REA issued to Gilead/Ostrander those guidelines (in respect to “Crown” lands), their importance is ignored or waived despite objections by interested parties.

Also included in the Natural Heritage Assessment Guidelines was the following:

5.7 Areas of Natural and Scientific Interest
Under the REA Regulation, Areas of Natural and Scientific Interest (ANSIs) are defined as areas which have values related to protection, scientific study or education. ANSIs are areas of land and water containing natural landscapes or features identified by MNR as life science and/or earth science sites (or both) depending on natural heritage values.”

As noted in the Environmental Registry; “Ostrander Point has also been designated a Candidate Area of Natural and Scientific Interest by the Ministry of Natural Resources.”

The granting of the REA by the MNR is in contravention of Section 38 of the Environmental Protection Act in respect to the two issues highlighted immediately above and should be immediately rescinded.


To summarize, we believe that the fact that the Ministry of Natural Resources “Guidelines” document fails to differentiate between the size of structures and the distance from the project location where bat roosts are concerned, is a problem. To ignore the characteristics of the structures proposed is the same as suggesting that the number of birds that will collide with a 50-storey building is the same as the number that would collide with a five-storey building.

The results of the bat monitoring for Ostrander Point also assume that bats in search of food will not travel beyond 120 meters of their roosting site.

We submit this is not logical.

We are also concerned with the discrepancy in the timing of the bat monitoring studies, which was done with the approval of the MNR but which seems contradictory to the MNR’s own information on bat activity.

The omissions and assumptions in the guidelines make it appear as if the Ministry’s guidelines as applied to wind power generation facilities are not meant to protect bats and birds but instead were written to ensure that a Renewable Energy Approval would be issued by the Ministry, and not be challenged on these issues.

We would like to emphasize again the critical importance of bats to the natural environment as a natural means to control insect populations.

We hope that the Tribunal will consider these facts and recognize that to the people of Ontario, the Green Energy and Green Economy Act was not intended to desecrate the natural environment including wildlife. The Ministry’s own policy on the development of Crown lands for onshore wind power states that development must be done in a way that “contributes to the environmental, social and economic well being of the Province.”5

We believe that we have shown several omissions that could indicate the Ministry of Natural Resources “Guidelines” are insufficient to support the intent of the Green Energy Act, and the Ministry’s own policies on the appropriate use of Crown land, particularly in the case of Ostrander Point.
We repeat:
  • “equipment” and structures associated with wind power generation projects should be considered as a factor in the killing/harming and harassment of nature regardless of the presence or absence of information to this effect in the Guidelines; and,
  • that reasonable care relating to normal and proven bat and bird movements and activities must be taken to ensure that Crown land is being properly used in a way that conserves the natural environment, as is the intent of relevant legislation, as is expected by the citizens of Ontario.
Additionally, the Renewable Energy Approval granted by the MNR to Ostrander Point GP Inc. is in direct contravention of Section 38 of the Environmental Protection Act.

Wind Concerns Ontario recommends again that the Tribunal reverse this MNR Renewable Energy Approval, for the reasons we have stated today, and in our earlier submission.

Parker Gallant, Vice-President
Wind Concerns Ontario

PO BOX 11059

1 Kunz TH, Arnett EB, Erickson WP et al. Front Ecol Environ 2007; 5(6); 315-324. Published by the Ecological Society of America.
2 McGuire, 2012, page 4. Available at:
3 Ministry of Natural Resources, 2008. Bat Hibernation and Hibernacula. Available at:
5 Ministry of Natural Resources, 2010. Policy PL4.10.04, Section 2.3

What the Ostrander Point ERT Site tour didn’t want you to see

Those of us taken on the site tour of “Ostrander Point Wind Energy Park” on March 6th, 2013 were lead “sheeplike” by Gilead’s Vice President Michael Lord on the site tour. Early on in the tour we trudged though hard to walk through snow to look at a 6 foot post in the ground (site for one of the nine turbines). This tired out a few of those on the tour and was presumably meant to give the appearance of the benign nature of Ostrander Point and the turbines that Gilead hopes to erect. We viewed the meteorological station (from a distance) which rises 60 meters (196 feet) according to the Stantec report with a base of about 2 feet thick. Those on the tour were left to imagine the look of the nine (9) GE xl 2.5MW turbines that will be erected on the site and soar about 85 meters to the hub (278 feet) plus a blade radius of another 50 metres (115 feet) which will bring them just shy of 400 feet high at the top of the blade sweep. Those turbines will sit on a cement pad approximately 60 feet in diameter and about 12 feet thick. The balance of the tour included a walk past the last access route to the lake and a return to the most westerly edge of the Crown land possibly to tire a few more on the tour or alternately Mr. Lord was not familiar with the property on which his company was hoping to place the turbines. The tour would have been much more meaningful had Mr. Lord taken us to see the large cleared area where some of the turbines are planned to be placed and which would have provided those involved in the ERT Hearings a much better visual perspective rather then pointing to a 6 foot pole in the middle of a very small clearing.

Proponent’s draft site plan

Having felt cheated out of a proper tour my wife and I were conducted on a private tour by Richard Copple of the Point to Point PEC Foundation.  To gain a perspective on the “Ostrander Point Project Area” refer to the picture labelled Ostrander Overview 3 and to the PDF file titled: Attachment A. Figure 2 prepared for Gilead and included in their Construction Site Plan Fig 2.0.

March 8, 2013 Walk:

Our March 8th walking route and significant observations can be found on the file titled: Ward of South Marysburgh-Skydrive. Please note the “Key” on this file and the circle denoting a “cleared area”. The pictures and the short videos from Ostrander Point start near the site of the met tower and continue down that path towards Lake Ontario. Note the running water along the trail, particularly in the first short video and pictures 7952, 7961, 7964 and 7967. Observation of where the water was running indicated a gravel bottom signifying a small stream like effect; presumably like a seasonal watercourse and no doubt also occurring during rainstorms.

The shoreline pictures (7968-71, 7974, 7979, to 7981 here) at Ostrander Point show the willow trees that stand; reaching heights (estimated) of 40/60 feet. The shoreline is a limestone bed that very gradually deepens and appears to go some distance out. We noted mute swans flying in the distance and Canada geese in the water. The last three videos (here, here and here) provide a brief view of the willow trees standing along a goodly part of the shoreline. Picture 7985 shows the met tower in the distance just to the left of the evergreen tree in the foreground.

We returned to the path (picture 7989 shows the forest growth to the east of the path where one of the turbines are to be located) to the point where an intersecting path (pictures 7995 & 7996) heading in an easterly direction had been created and walked it to a cleared area (see file picture titled “Ostrander Close Up” for an aerial view). Pictures 8003 through 8007 shows the cleared circle and the viewer should note a few trees were left standing. The cleared area originally was covered with trees and bush similar to that found around the circle as can be seen in pictures 8008, 8009, 8018, 8023 and 8033. Picture 8041 with Richard and Parker walking the path gives a perspective on the size of the trees still standing near that path. Pictures 8043 and 8049 show small water courses that were noted in many places on our walk.

Returning to the main path and heading back to the start of our walk picture 8057 provides the viewer with some idea of the many evergreen stands of trees on the property. Pictures 8061 provides a picture of the met tower and picture 8064 shows a segment of the land cleared to erect the tower.

Prepared by Parker Gallant with pictures and videos by Susanne Gallant and Richard Copple.
March 10, 2013

Wind Facts from a Different Angle

Without being anywhere near the CanWEA offices on January 11, 2013 one could sense the excitement when the Independent Electricity System Operator (IESO) released the news that wind generation in Ontario at 4.6 TWh (terawatts) had beaten coal generation of 4.3 TWh. That press release followed one from the outgoing Premier, D. McGuinty the previous day announcing the remaining coal plants would shut down by the end of 2013. So we saw two “good news” days for CanWEA and their 400 plus members, so why did they become so defensive?

The CanWEA press release of January 23, 2013 dealing with the intentions of MPP Lisa Thompson to present a Private Members Bill calling for “a moratorium on wind energy development until a third party health and environmental study has been completed,” really upset them. They followed this with a February 12, 2013 press release which included the results of what they referred to as a January “Oracle Research poll” they had commissioned. The poll is dated February 12, 2012 so its not clear if this is old news or new news. In any event the main polling question was atypically benign asking those polled to opine on whether “Ontario should continue to strive to be a Canadian leader in wind and solar energy production”. The report show 69% agree. It is noteworthy that Oracle also conducted a poll for the Ontario Sustainable Energy Association in July 2011 where the results were that 75% supported the statement “I support green energy initiatives in Ontario such as wind and solar power”. The poll conducted for CanWEA by Oracle in February 2012 had the support of 78% and the one conducted in July 2010 by Ipsos Reid had the support of 89% so the trend is down, meaning perhaps the individuals being polled are becoming aware of the bad effects of industrial wind turbines. The 20 % drop in support in just over two years must be worrying to CanWEA and its members considering the bulk of the respondents are urban dwellers unaffected by the 400/500 foot monsters.
If wind generation was truly competitive it would be offered through the Hourly Ontario Energy Price (HOEP); the “wholesale” market IESO administers. But wind production doesn’t need to stoop to those levels because the wind developers have contracts with the Ontario Power Authority that paid them rates in 2012 in excess of 5.6 times the HOEP average rate of 2.41 cents per kWh. Most of them also get the benefit of annual “cost of living” (COL) increases tied to the inflation rate. One example is the 165.6 MW Comber wind project operated by Brookfield now in its 2nd year of operation and receiving $142.49 per MWh according to their DRBS credit report. The COL increase per MWh being paid to Comber/Brookfield is $7.49 in just the 2nd year of its operation but it is not yet commissioned (by IESO). The $7.49 per MWh increase at 5.5% is well above the Ontario Ministry of Finance indicated jump in the inflation rate in Ontario of 1.4% in 2012 (Comber went online in late 2011) so it is unclear who sets the parameters for the increase granted but it appears obvious that it greatly exceeds the Provincially reported inflation rate by the same government that gave us the FIT program!

Let’s pay no attention to the foregoing inflation kicker and assume that the 4.6 TWh (4.6 million MWh [megawatt hours]) that those wind turbine produced was paid out at $135 per MWh.  That means the developers would have been paid $614 million. Had those TWh been produced by those doomed coal plants it would have cost the ratepayers $111 million (4.6 TWh at $24.1 million per TWh [2.41 cents per kWh] for the HOEP price that the OPG coal generation plants received) or about $500 million less.

Ratepayers also paid for backup power; principally in the form of gas generation. The contracts that the Ontario Power Authority (OPA) negotiate with gas generators pay them for their backup (they are paid to be ready to produce when the wind isn’t) and that is about $15,000 per MW per month. That means that the 4.6 TWh that the wind generators produced generates payments to gas generation plants. For sitting around “at the ready” the gas plant operators received about $90 million for producing no power for the cost of that “clean” wind generation.

Not included in the foregoing is the cost to Ontario Power Generation (OPG) who are often told to “spill” cheap clean hydroelectric generation and receive no compensation. Unfortunately no information is available to calculate what that cost is, despite the efforts of the writer and other critics, but one must assume it would be significant. Likewise Bruce Power who operate “flexible” nuclear plants are forced to “steam off” or “steam bypass” nuclear production, and are paid for that lost production but the cost to the ratepayers is an unknown. The assumption is that it is a large amount. Additionally the cost of those transmission lines built by Hydro One to deliver that wind (and solar) power is a significant amount but again the costs related to wind production hookup and transmission is not quantifiable as Hydro One do not break down their capital costs to identify monies spent to hook up renewables. Nevertheless with annual capital expenditures of about $1.5 billion it is safe to assume the monies spent supporting the wind segment are significant.

So let’s look at some facts that we can point to:


  • Wind supplied 4.6 TWh of Ontario’s total generation in 2012 which was 3% of total generation of 151.8 TWh supplied by all power operators. 
  • Ontario exported 14.6 TWh in 2012 or 3.2 times the power wind generated, meaning Ontario did not need this power. 
  • Wind required back-up generation (primarily gas) for the 71% of the time wind turbines produced zero (0) electricity and during the 29% of the time those gas plants sat idle they were paid $15,000 per MW/per Month (Net Revenue Requirement) meaning it cost Ontario ratepayers $90 million. NB: A 500 MW gas plant could have produced that 4.6 TWh but for sitting idle were paid $90 million (500 MW X $15,000 X 12 months = $90 million). 
  • The 4.6 TWh of electricity if provided by the coal generation plants could have produced the same power at a cost of $111 million (4.6 TWh X $24.1 million per TWh = $111 million) instead of the $614 million (4.6 TWh X $135 million per TWh) that the wind production cost. 
  • If the back-up gas generation costs of $90 million are added to the excess (over HOEP) costs of wind the total costs to the ratepayers in 2012 was $593 million or 9.2% of the total Global Adjustment (GA) pot of $6.455 billion which was $1.146 billion higher then the 2011 GA total. 

To summarize; Ontario’s industrial wind turbines produced 3% of total generation and the bulk of that production was exported. The 3% it generated cost Ontario’s ratepayers 9.2% of the total Global Adjustment or $593 million. The $593 million in costs represents an increase of $130 per annum for the average Ontario ratepayer producing NO BENEFITS.

That $593 million found its way to ratepayers electricity bills and then became taxable with another $77 million removed from ratepayers pockets as taxes through the application of the HST.

The Liberals have managed, through their energy policies, a situation that will see the waste highlighted above, repeat itself again and again for the next 20 years or longer. It makes the scandals of e-health, Ornge and the gas plant moves look small in comparison.

Parker Gallant,
February 20, 2013