Cancel the contracts, Minister Thibeault
September 30, 2016
Energy Minister Glenn Thibeault was busy this past week dancing around issues plaguing his portfolio. The issues are: rising electricity bills, energy poverty and polls showing falling voter approval of the Ontario Liberal Party. In an effort to stem the bad news Minister Thibeault announced the suspension of his predecessor’s directive to IESO ordering up another 600 megawatts (MW) of wind and 300 MW of solar.
Minister Thibeault issued a news release, delivered a speech to the Ontario Electricity Association, and held a press conference. He looked somewhat embarrassed to be claiming that, because the Large Renewable Procurement or LRP II was not proceeding, the average electricity ratepayer will not have to pay an additional $2.45 per month in the future. About 4 million of those average ratepayers, however, will have to pay from $6-$8.00 more per month if they use gas as a source of warmth (gas furnace) or hot water to cover the costs of the cap and trade tax starting January 1, 2017. Those same ratepayers will also see the benefits of the removal of the 8% provincial sales tax and a drop of $6-8.00 in their monthly electricity bill meaning they shouldn’t see an increase in their energy costs. Or will they?
Let’s examine the ministerial pronouncements about “suspending” LRP II to see if the actions will really stop rate increases.
First, put the suspension of 600 MW of wind and 300 MW of solar in context. A look at the 2016 Ontario Power Generation (OPG) 2nd Quarter report helps. If wind operated at 30% of capacity and solar at 15% they could have produced 986,000 MWh of intermittent electricity or enough to supply about 220,000 average Ontario households for the six months in that report. That in itself is interesting but it doesn’t highlight what else was happening with existing generation facilities. For example, “During the six months ended June 30, 2016, OPG lost 3.4 TWh of hydroelectric generation due to SBG [surplus baseload generation] conditions, compared to 1.5 TWh during the same period in 2015.”
In other words, 3.4 terawatts hours of electrical power was dumped because we had too much.
$150 mil wasted
If it hadn’t been “spilled,” (the technical term) that steady reliable hydroelectric power could have supplied 750,000 average households with power for six months. And even though the power was “spilled,” ratepayers were charged for it at a rate of 4.4 cents per kilowatt hour — at a cost of $150 million for the 3.4 TWh! Ontario’s 4.5 million ratepayers picked up an annual cost of $33 for spilled power, while Minister Thibeault was suggesting those same ratepayers would “save” future rate increases of about $30 annually!
What about even more spilled hydro, increasing amounts of curtailed wind, and steamed off power coming from Bruce Nuclear?
As we ratepayers continue our conservation efforts and demand for power remains flat, or falling, wind and solar generation contracted but not yet constructed will enter service producing more surpluses. The spilled, curtailed and steamed off power will be added to our bills once again driving rates higher.
Minister Thibeault should cancel any unbuilt wind and solar projects, and complete a cost-benefit study before launching the revision of the long-term energy plan (LTEP) as Premier Wynne has instructed him in her recent Mandate Letter.
Ratepayers would be delighted to experience a year or even six months without a rate increase.
(C) Parker Gallant
The views expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.