Parker Gallant on Ontario’s Energy Ministry: aiding the fortunes of…Quebec


No, no, don’t confuse me with the facts!

Endorsing fallacies, avoiding realities—Ontario’s Ministry of Energy
Global Adjustment charge jumps from $800 million to $6.5 billion in four years
Watch out Ontario, Quebecis targeting our industry!  That’s the message one gets from the announcement by Premier Pauline Marois that Quebec will use Hydro Quebec’s surplus power to attract job-creating industries to Quebec.  An article in the October 8, 2013 edition of the Financial Post states Hydro Quebec will set aside 50 terawatt (TWh) hours for that purpose.  To put that in perspective, 50 TWh represents 35% of Ontario’s total power demand (141.3 TWh) in 2012, or enough to power five million average Ontario households.
So what is Ontario doing to stave off this aggressive push from Quebec?  Well, since being named Premier, Kathleen Wynne has overseen the Ministry of Natural Resources issue renewable energy approvals for about 811 megawatts (MW) of industrial-scale wind power.  Three of those, including a Samsung contract (Armow Wind for 180 MW), occurred in just the last two weeks!  Her government also announced October 10, 2013 that they will scrap the plan to build 2,000 MW of new nuclear.  That 2,000 MW was part of the Long-Term Energy Plan issued by Brad Duguid in late 2010 when he was Energy Minister.
Here is what Energy Minister Bob Chiarelli had to say about abandoning the new nuclear build:  We’re in a comfortable (electricity generation) surplus position at this time and it’s not advisable to make the major investments in new nuclear. Some time in the future we might be looking at it.”
To put that into perspective, it would take approximately 7,000 MW of industrial wind turbines to produce the equivalent power of the proposed 2,000 MW of nuclear.  That 7,000 MW would entail the erection of almost 3,500 turbines spread throughout the province, producing power at 29% of their rated capacity.   That same 7,000 MW of wind would produce power 80% of the time when we don’t need it—the middle of the night, during the spring freshet, and in the fall when our demand for power is the lowest.  And, when we don’t need the power we will often pay the wind companies to not produce power. We will also require other power sources to back up those turbines (now expensive gas plants, two of which were moved at a cost of over $1 billion ) so Ontario ratepayers will pay twice for any power we may need.  
So what will this cost us?
A report from the Ontario Power Authority (that no longer appears on their website) pegged the Global Adjustment Mechanism (GAM) for the 12 months ended January 31, 2009 at $800 million.  Fast forward just four years to January 31, 2013 and the total GAM had jumped to $6.5 billion for the comparable 12 months.  The GAM looks sure to hit the $8 billion mark by the end of January 2014. That GAM pot principally reflects renewable energy costs along with money spent on getting Ontarians to conserve.
Looking at what the cost of 2,000 MW of new nuclear might be to the Ontario ratepayers and  using the original estimate of $26 billion, you get a capital cost of $43.4 million per TWh (assuming a 40-year lifespan).  That includes a fuel cost of 6.3 million per TWh.  For those who like to equate that to a kilowatt hour (kWh) the cost (without Operations, Maintenance and Administration [OMA]) would be 4.43 cents per kWh and 8.3 cents per kWh when OMA is included both less than recently announced average (8.88 cents) time-of-use (TOU) prices set for the next six months.
Now compare that to the cost of a TWh from wind turbines and assume they will produce at 29% of their rated capacity.   At 11.5 cents per kWh the cost to produce the same power jumps to $115 million per TWh (plus another 20% cost of living increases) without adding in the costs of back-up power from gas turbines, the spilling of clean hydro or “steaming off” nuclear power from Bruce.  The back-up alone adds over $80 million per TWh bringing the cost per kWh to 20 cents. 
So how do Ontario’s electricity rates for large industrial customers compare with Quebec?  According to Hydro Quebecenergy costs in Montreal at $100 would cost $223 in Toronto and $90 in Winnipeg. 
It may be time for Premier Wynne and Minister Chiarelli to do a reality check.  Why didn’t they simply announce that Ontario doesn’t need more electricity production from wind, solar and nuclear “due to our comfortable surplus position” instead of the fallacy that we need more wind? 
We certainly don’tneed electricity generation that will complete the process of making Ontario the most expensive place to operate energy intensive industry in all of North America.  Stop the spin, stop the fallacy that wind can replace nuclear!
Parker Gallant,
October 21, 2013

Energy Minister peddling “empty promises” on power plant siting

In a letter published in The Ottawa Citizen today  Wind Concerns Ontario vice-president Parker Gallant writes:

Ottawa Citizen, October 18, 2013

Peddling empty promises

RE: Angry Ontarians talk turkey with Wynne over $1B gas plant bill, Oct. 10

On the same day that Ontario’s new Auditor General, Bonnie Lysyk, released her report on the Oakville gas plant cancellation, Ontario’s Minister of Energy Bob Chiarelli tried to deflect the bad news in a  news releaseheadlined “Ontario Improving Decision-Making on Large Energy Projects.” In it was a link to 18 recommendations by the Ontario Power Authority (OPA) and the Independent Electricity System Operator (IESO).
The recommendations were fluff. Words like “outreach,” “understand,” and “enhance,” were used but nowhere was any mention of returning local planning to the communities where these large power projects are to be sited.
Minister Chiarelli declared that “We want to get these decisions right … we are committed to ensuring communities have their say right from the start.
Sending out a news release dealing with siting power projects on the same day that the Auditor General disclosed that the cost of moving the Oakville gas plant cost the ratepayers and taxpayers of the province $675 million,  is not just an admission that they got the siting process horribly wrong, it  pretends it is being fixed.
The truth is, the Ministry of Energy remains firmly in charge and will decide what it wants. To tell Ontario communities that they will “have their say from the start” is insulting.  In just four days in early October, approvals for three more huge wind power generation projects were announced, the largest with a capacity of 180 MW. All these were without community consultation.
Mr Chiarelli is peddling more empty promises to detract from the mess that the Ontario Liberals have made of what used to be a competitive electricity sector.
Parker Gallant
Wind Concerns Ontario

Greater Napanee: residents opposed, landowners don’t know what they’ve signed


We reported yesterday that Gilead Power is actively prospecting for landowners to lease 10,000 hectares of land for a wind power project. The citizens of Greater Napanee held a public information meeting last night. Note the comments from a landowner who has been approached numerous times by the aggressive wind power developer.
Here is a report from local resident Bill Daverne.

Greater Napanee says “No”
Tuesday night, the Town of Greater Napanee held an open council meeting dedicated to public input on the proposed Gilead Power 40-80MW Dorland wind power project.
Dorland is to be sited in a 10,000-hectare swath of properties south and east of Hay Bay in the waterfront community in which Sir John A. Macdonald lived as a child, and which is today a mix of farms, residences and recreation properties.
Lease acquisition is well underway, but no Feed In Tariff or FIT contract has been awarded.
It became clear early on in the meeting held in the South Fredericksburg Hall that the full-house crowd of 250 to 300 was opposed to the proposal.
At least 18 people spoke against Dorland; one person said he was for it, had signed a contract with Gilead, and didn’t “mind looking at wind turbine towers.” He said he already looks at the power towers running north from the Lennox Generating Station and “is used to them.” He admitted he had not had a lawyer examine the contract before he signed.
Only local residents were allowed to speak, and those opposed covered the range of issues in detail. Al Curtis and Jim Barrie pointed out that Dorland was in the important Atlantic Flyway bird migration route and would lead to a mass slaughter of birds, as is already being experienced at the wind power project on Wolfe Island, across from Kingston.
Wind turbine setbacks legislated in various jurisdictions around the world were shown, showing that Ontario has the smallest setback anywhere.
One speaker had calculated the impact of the proposed industrial wind turbines on property values was a conservative reduction of 25% while it was noted studies in Ontario, New York state and elsewhere have shown value declines of as much as 50%.
“We have calculated the value of the properties affected at $430 million with a loss of at least $100 million to be caused by this wind farm. Who will make up for the loss of this tax base?”
The impact on people across narrow Hay Bay, facing the big turbines, was noted by people on both sides of the fish-rich waters. One woman said she rented out her cottage. “But who would want to rent it to look at wind turbines and listen to that sound,” she said. “They come for the quiet, and the birds.” Others pointed out that birds that weren’t killed would avoid the area, costing residents one of the local joys.
When the room was asked who had visited Wolfe Islandto see the impact there, a lot of hands went up amid murmurs of disapproval.
Others noted the loss of farmland was rarely discussed but given the setbacks and separation involved, a lot of his land would be lost to construction and maintenance roads. The developer demands 100% control over roads, siting, access, etc. and this would take control of drainage, woodlots and wildlife corridors out of his hands.
“I would describe them as being ‘under-handed’ in my dealings,” he said, noting he had been approached six times and said no each time. It will destroy the look of the entire countryside, he said, noting he had time to reflect on that as he combined recently and was able to look up and down the peninsula and admire even the cell tower at Conway and the smokestacks at Lennox Generating Station: “They don’t spin around and distract from the view.”
He wants Council’s vote next week to be recorded, a sentiment supported and voiced by others as well.
Much was also made about the fact wind power is surplus power and has been sold at a loss of $2 billion a year outside Ontario due to over-production.
Early on, one speaker asked for a show of hands to see who was against the Dorland proposal and almost every hand went up. The message was clear. Those assembled want Council to declare Greater Napanee as an ‘Unwilling Host’ next week.
The October 8th meeting is scheduled to be held at the Napanee Town Hall but could be moved to a larger venue, based on the turn-out and interest Tuesday night. To double-check on the location, the Town website is: http://www.greaternapanee.com

Parker Gallant: the GEA is Canada’s biggest Ponzi scheme

Up today on Energy Probe is Parker Gallant’s analysis of Ontario’s Green Energy Act. Read on for who benefits (hint: it’s not you).

Parker Gallant: Ontario’s Ministry of Energy creates Canada’s biggest Ponzi scheme

The press release on September 24, 2013 from the Attorney General’s (AG) office was headlined: “Attorney General recovers $17 million for Victims of Ponzi Scheme” and went on to describe how the money had been seized and sent to the American authorities in respect to a US-orchestrated “Ponzi Scheme.”
The definition of “Ponzi Scheme” from the “Legal Dictionary” is:  “A fraudulent investment plan in which the investments of later investors are used to pay earlier investors, giving the appearance that the investments of the initial participants dramatically increase in value in a short amount of time.”
    In the case of Ontario’s Ministry of Energy those “investments of later investors” is the billions of dollars extracted from the pockets of the approximately 4.4 million ratepayers spread throughout the Province of Ontario. In Ontario, however, the extraction of monies from “later investors” is considered legal under the Green Energy and Green Economy Act (GEA) passed by the Liberal Government under Premier, Dalton McGuinty.
   McGuinty, via the Energy Minister, directed the Ontario Power Authority (OPA) to contract with investors who would be willing to put solar panels on their roof or on the ground. The OPA complied and offered above market rates and investors flocked to the OPA submitting thousands of offers and they dutifully signed them up offering to pay up to 80.2 cents per kilowatt hour.
   The OPA just released a list as of June 30, 2013 they refer to as “Active FIT Contracts”.  The list of approximately 1800 Feed-in Tariff (FIT) contracts don’t include the MicroFIT contracts but, according to an OPA spokesperson, include what the OPA refer to as “Capacity Allocation Exempt” (CAE) contracts. A separate undated list of the latter referenced as “Phase 2” has 800 contracts noted. The bulk of the two lists are “roof mounted” solar installations with a smattering of biogas, solar ground mounted, waterpower and a few others but about 85% are roof mounted solar contracts.
   Scrolling through the lists one finds many familiar names such as IKEA, Canadian Tire, Walmart, RBC, Toronto Hydro, Durham College, Powerstream, London Hydro, Loblaws, etc. etc. You also find hundreds of addresses and numbered companies that don’t identify either the “applicant” or the “supplier”. One would assume the applicant (Phase 2) or supplier (June 30, 2013 report) are one and the same but the carryover from the Phase 2 report to the OPA list switches the descriptive terminology.  
   The OPA spokesperson told me that: “Projects on the March 31, 2010, CAE list that are not on the June 30, 2013, list of active FIT contracts were those that have either been terminated or were not accepted/executed. Those projects are not included in the June 30, 2013, total of 814 MW of solar in commercial operation.”
   Investigating that premise allows you to determine that contracts on the Phase 2 list, as an example,  in the name of “Canadian Tire” or one of the “Loblaws” trade names disappeared.   On reviewing the addresses however a search reveals that both “AMP1” or “MOM Solar LP”  are listed as “suppliers” for addresses identified as “Canadian Tire” stores.  Canadian Tire, who appeared to have as many as 79 contracts (over 15 megawatts [MW]) on the Phase 2 list, is suddenly at zero (0) on the June 30, 2013 list. If those 15 MW produced at 15% of capability they would generate almost $14 million in annual revenue at $700. per MW hour and $280 million over 20 years.
   The two lists also disclose that many other retailers have taken advantage of the rates first offered for roof mounted solar over 10 kilowatts (kW) which was 71.3 cents per kWh (hour).   As another example; Loblaws has been very aggressive with 74 contracts under the “Loblaws, Real Canadian Superstores, Zehrs, No Frills” monikers and another 136 under the name of “Fresh from the Sun Energy Inc.” from the OPA’s March 10, 2010 list.  The latter were on the “Phase 2” report but the OPA listed only14 contracts and that name doesn’t even appear on the June 30, 2013 list.  So what happened?
   Loblaws and its iterations had contracts in excess of 20 megawatts (MW) of nameplate capacity.   Those 20 MW of solar roof mounted could generate annual revenue for Loblaws of approximately $18 million per annum ($360 million over 20 years) at a generation rate of 15% of rated solar capacity at an average price of $700. per MWh. Partially reviewing the OPA June 30, 2013 list, we note Loblaws are down to 74 contracts with 17.4 MW of listed capacity. The question I posed to the OPA spokesperson asked why the name change on some of those early Loblaws contracts?
   The response back was what we have come to expect and contradicted the earlier e-mail (above) from the OPA spokesperson:

FIT contracts permit the supplier to assign the contract or apply to the OPA for a change of control. It is not unusual for FIT contracts to be assigned to another company, for ex., a subsidiary, or for a portion or all of the project to be sold to another party. Through these processes, the Supplier Legal Name would change, but the term, end date and financial terms of the contract remain the same, so there is no additional exposure for the ratepayer when these changes occur.
The contract details that the OPA can provide to a third party are subject to confidentiality provisions, which is included in Article 7 of the FIT contract, available on the FIT website. With respect to Canadian Tire and Loblaw contracts, you will need to contact those suppliers for specific details.”

   The lists include schools, municipal arenas, community centres, hospitals, etc., but don’t include the Toronto District School Boards contracts for the 311 schools that will be outfitted with solar panels according to an article in the National Post on September 20, 2013.  This will allow the TDSB to repair 32 school roofs but it’s unclear how much the Board’s partner “School top Solar LP” is retaining out of the approximately $550 per MW they will be paid for the rated capacity of 33 MW. Those 33 MW should generate almost $24 million per annum or $480 million over the 20-year term of the contract. This makes one wonder if the TDSB are poor negotiators, or those school roofs cost millions each?
   In reviewing the three OPA lists it is almost impossible to connect them because,  as an example, the Fresh from the Sun Energy Inc. stores on the list fail to include full addresses and the June 30, 2013 list often does not even include an address under the multiple contacts awarded (or sold to) companies like MOM Solar LP or a supplier referred to as AMP1 (legal name) for which no information can be found!

Take the Money and Run:
As the Steve Miller Band said, “Take the Money and Run”; if I were a Loblaws or a Canadian Tire executive and wanted to reward shareholders, I would be tempted to “flip” the contracts. By simply having those contracts Loblaws and Canadian Tire have a huge guaranteed cash flow they could easily sell to a third party like Moms Solar LP (backed and partially owned by Morgan Stanley) or the anonymous AMP1! By selling the contract they can add it to their revenue stream. A search of annual reports, for Canadian Tire and Loblaws comes up empty in respect to those contracts.
   The retailers, municipalities, school boards, etc. who have obtained these contracts are either receiving a subsidy (private sector) or a hidden tax, for the benefit of the province (schools, colleges , hospitals, etc) and municipalities (community centres, local electricity distributors, arenas, etc.). Perhaps this is Premier Wynne’s reference to “revenue tools” means! All of the foregoing sell their generated electricity at prices up to 20 times the cost of power generated by OPG or Bruce Power and those same retailers, school boards, colleges, etc. buy back the power at the same (or lower) rates paid by 4.4 million residential ratepayers.      Those subsidies/hidden taxes wind up in the Global Adjustment pot and those “later investors”, pay them for the next 20 years.
   The “Ponzi Scheme” created by the GEA for just the “solar” portion of the GEA will be in excess of $1.3 billion each year for the next 20 years once the full contracted solar (approximately 2,000 MW) is hooked to the grid. The cost of the FIT contracted solar will add $300 per year to each ratepayer’s bill.
At $26 billion over the 20 year period of the contracts this must represent the largest “Ponzi Scheme” ever perpetrated  in North America and the poor ratepayers didn’t even have the ability to opt out of being a “later investor”.
   If the ratepayers of Ontario got the AG to declare the GEA  a “Ponzi Scheme” and pushed for the recovery of the billions of dollars they have been forced to pay, Minister Gerretsen would have something to really brag about!
Parker Gallant,
October 1, 2013
Parker Gallant is a retired bank executive and a former director of Energy Probe Research Foundation. As with all independent bloggers on this site, Parker’s views do not necessarily reflect those of Energy Probe.

Ontario’s electricity Residual Stranded Debt—another 16 years til paid off?


Questions, questions.
  The Ontario Electricity Financial Corporation (OEFC) finally had its March 31, 2012 annual report
released a few days ago. The financial statements audit letter from the Auditor General is dated June
21, 2012. Why it took 15 months for the Finance Minister to table the report is not known—by now
the March 31, 2013 annual report should also have appeared.
   In any event, the “stranded debt” which started life on April 1, 1999 at $19.4 billion has been further reduced and as of the end of March 31, 2012 stood at $12.3 billion. OEFC has generated gross revenue of $49.5 billion since its inception, April 1, 1999 to the end of March 31, 2012. Of that amount, $11.9 billion came from ratepayers under the guise of the “Debt Reduction Charge” (DRC). What this means is, the $6.1 billion reduction in stranded debt gobbled up that $49.5 billion in gross revenue and, further, each $1 billion reduction in the stranded debt required $8.1 billion in revenue.
   The original debt on OEFC books April 1, 1999, was $31.2 billionit had reduced by $2.4 billion as of March 31, 2012 when it stood at $28.8 billion. That meager debt reduction required $20.6 billion of revenue per $1 billion of debt reduction.
   If we look at the “Residual Stranded Debt,” originally calculated as $7.8 billion, we can see from the following chart that it has reduced by $3.3 billion.

 
In other words, in 13 years, the Residual Stranded Debt has required $14.6 billion of revenue per $1 billion of reduction.

  Ontario’s ratepayers were told the DRC would be around for only a few years. This report would seem to indicate, however, 13 years later, that it will take many more years before it finally disappears. To retire the remaining “Residual Stranded Debt” could require $65 billion in gross revenue to OEFC before it is finally paid off. At the current average of approximately $4 billion in annual revenue, it will take 16 years and another $16 million of DRC charges to ratepayers before that happens.

   Perhaps the government should change the corporate name of OEFC. My suggestion is to
change the name to “Ontario Evading Financial Control.” That way, they get to keep the
acronym and retain any inherent future marketing value in its use.
Parker Gallant
September 24, 2013
The opinions expressed here are those of the author and not Wind Concerns Ontario.

Hydro One leaves sick man in the dark

Really, honestly, if all you people who live in the country would just LEAVE already and get a 400-square-foot condo in Toronto, these stories wouldn’t happen.

Hydro One removes transformer, leaves sick man in dark

Simon Kent

By ,Toronto Sun

  Updated:

TORONTO – Hydro One, how could you?
Tony Kenny is too polite to ask but somebody has to pose the question.
On Sept. 5 he contacted the power utility to complain about frequent, unexplained power outages at his small farm just outside Peterborough in the community of Bailieboro.
Kenny pointed out that the power transformer on his property was failing and he wrote them it was “ancient … along with the original poles which clearly say ‘Property of Ontario Hydro.’ ”
Kenny respectfully asked for a little help. He wrote: “Because Hydro powers the only source for water for myself, a necessity of life, and animals on the farm, could you please look into replacing the transformer and poles before there is a bigger problem?”
The bigger problem being that the supply of power is not just a necessity of life for his animals, there is another reason. Kenny lives on a disability pension.
He has a chronic heart condition called dilated cardiomyopathy. It means he has medical needs that can only be sustained by the provision of electricity on a regular, 24/7 basis.
Kenny lives at the constant risk of cardiac arrhythmia and/or stoke. This has been compounded with late-onset adult diabetes, meaning he cannot work and Kenny’s only source of income is the Ontario Disability Support Program.
This was all outlined in his written plea to Hydro One for a better supply of electricity.
Two days later he had his reply.
The utility wrote to tell the 51-year-old they couldn’t help.
“Thank you for contacting us about power outages in your area,” the letter opened.
“Unfortunately, Hydro One cannot control all interference on our system which can cause power interruptions or voltage irregularities and from time to time, short power outages will occur on the system. Therefore, we cannot guarantee a constant supply of electricity.
“We strongly advise anyone that is dependent on electrically powered medical equipment to have a back-up generation source or alternative arrangements in the event of a power outage.
“As per our conditions of service, Hydro One cannot guarantee a continuous or constant supply of power and will not be liable for any damages caused by lack of power, a power outage or surge.”
It didn’t end there. On Sept. 10, Kenny claims without his knowledge and without notice or permission to enter his property, Hydro One workers arrived and took the transformer away.
They didn’t install a new one in its place.
Kenny has been in the dark ever since — literally and figuratively — and carts water by hand in the absence of power for his electric pumps.
“I don’t know what to do now,” Kenny said. “I contacted my MPP’s office and Jeff Leal couldn’t help. I live on my own and worry what would happen if my health started failing and I couldn’t raise help.
“I have lived here since 1995 and never had a problem with Hydro One, always paid my bills, but as soon as I complained, that was it.
“Nobody from Hydro One has even contacted me and given me an explanation for their actions.”
When the Toronto Sun approached the utility about the Kenny case, a Hydro One spokesman said they would only offer a comment if Kenny supplied a signed disclosure form via e-mail to look into his account.
“Which is great, but I don’t have the power on so I have no computer — so how can I fulfil that request?” Kenny retorted.
In a final twist, Kenny says there is one reminder of his dealings with Hydro One to remind him of the utility’s unintended but ironic approach to customer service.
There on the pole where the old transformer used to stand is a brand new smart meter; alone, unused and ultimately totally useless.
As Tony Kenny is willing to attest, much like Hydro One itself.

***************

Rural dwellers are not the only consumers who feel powerless when it comes to Hydro One.
Cottagers allege they suffer discriminatory pricing at the hands of the monopoly supplier, according to Rose Mary Rosada.
“If your cottage is not your primary residence … you are billed for delivery charges at approximately 2 1/2 times that of a residence where the occupants live full time, even if they are next door to you, the cottager,” she said.
“On the road where our vacation property is, there are about 12 homes — four of which are full-time residents and the other eight are seasonal.
“Why is it Hydro One’s business whether this is my full-time or part-time residence (my time is split 50/50 at both) … Bell Canada charges the same rate no matter how many residences you own.
“The only way Hydro One will change the way they bill my vacation property is if I have my mailing address for Canada Revenue Agency, my driver’s licence, etc. changed to my vacation property address.
“It’s none of Hydro One’s business and this is an invasion of my privacy on their part to be demanding this.”
Hydro One would not directly address the claim of discriminatory pricing other than to direct us to their statement on seasonal property pricing versus year-round home.
It says in part: “A delivery rate is the price you pay to have your electricity delivered to your seasonal residence. If you have a second home such as a cottage, chalets or camp area that is serviced by Hydro One you are a seasonal customer.”
The understanding being that seasonal means you pay more.
Why do they do that? Because they can. As a monopoly, Hydro One can do whatever it likes.

Ontario’s “voodoo math” and electricity system

From Sarnia area local business paper First Monday, an opinion piece by Brian Keelan. (Who needs correcting on the notion that wind power generation is “carbon free—wind needs a real source of power such as natural gas behind it.) We especially appreciate Mr Keelan’s observation that the Liberal government’s energy policies have effectively resulted in “civil war” in Ontario. Read on…

I am furious green

Brian Keelan's picture

Sat, 09/07/2013 – 11:25Brian Keelan

Here in Sarnia Lambton we have been hearing that Nova is considering building a new polyethylene plant to go along with the three plants they already have (and which employ about 830 of Sarnia/Lambton’s taxpayers in what are widely believed to be great jobs). But… that polyethylene plant is also being considered for the Gulf coast of the USA due to a much better energy price; instead of paying 3.5 to 4 cents a kilowatt hour down there, the Ontario Government is asking them to pay over 10 cents a kilowatt hour up here… and these guys use a lot of kilowatts.
This project is therefore at risk due to the high cost of energy here in Ontario so, Nova – along with the residents of Sarnia/Lambton – is looking to the Ontario government to do something about it. But the Ontario government is reluctant to do anything since if they give Nova a ‘break,’ they are just going to tack the ‘break’ on to all the citizens of Ontario’s electricity bills They don’t want the voters in their precious 416 and 905 area codes upset because the government caters to them due to their voting power. Why give a break for those of us out here in the 519 area code who don’t regularly vote for them? Thus we are being punished and/or ignored.
Nova has what I think is a neat way to solve this dilemma without the Province of Ontario having to do anything more than use their head. Let them build their own electrical generation plant right here in Sarnia to power their three existing plants plus the new polyethylene plant and we get a new power plant to boot this means more good jobs and taxpayers for Sarnia/Lambton. But the fly in the ointment is that Nova would have to cross a public road with their transmission lines and they are legally forbidden to do that since that is the “domain” of Ontario Power Generation who in effect are telling them, “We know you can do it more efficiently than we can but we need you to pay the going rate.”
At this point I’d like to tell Kathleen and her crew something my dad told me many, many years ago that served me well: “You’re a fool if you think anyone is ever going to pay even five cents for the privilege of doing business with you. Sure, your service has to be great and so do your people and your products but if you aren’t there when it comes to price, you are dreaming.”
I don’t even know who to get mad at for that since our electricity costs involve so much voodoo math. As simply as I can figure it: our rates are determined by the Ontario Energy Board (the OEB) who regulate the Time Of Use plan (the TOU) as well as the Regulated Price Plan (the RPP) to determine our electricity rates. The basic cost of electricity consists of two elements; the Hourly Ontario Electricity Price (the HOEP) which comes from Ontario Power Generation (the OPG) and a vague catch-all factor known as the Global Adjustment (the GA). The GA is where OPG would add the cost of the price-break they would give to Nova (if they want the business). By law, OPG can only make this GA/HOEP price adjustment twice a year and they don’t even have to raise rates unless they really need the money. Sadly for us, they really do have to do it because the Ontario government is way too deep in their own bottomless money pit to help them out. But does it really matter where the money that the OEB gets comes from anyway?
“Ask not from whom the money comes… it comes from thee stupid.” While they rob Peter to pay Paul and then rob Paul to pay Peter back, it will ultimately be passed on to you (thee) and me and then our kids as we try to get out of this financial quagmire due in large part to Ontario’s financially flawed Green Energy policies which have led us to this Financial Energy Crisis or as I like to call it, the FEC.

Read the entire column here.

Corcoran today: Ontario’s power disaster

Those of us opposing industrial wind power generation projects in places where no such industrial activity should ever be, have known how crazy Ontario’s power policies have been, despite the bland patronizing comments from government and the insinuations from the predatory wind power development lobby.
  In today’s Financial Post, editor Terence Corcoran takes a grim view and refers to a damning new report from the CD Howe Institute.
 

Terence Corcoran: "The new premier, Kathleen Wynne, appears to be coasting through the power issue, issuing directives and installing ever more megawatts of wind power at huge cost."

New study highlights desperate need for reform the province’s vast dysfunctional and costly electricity regime
For almost five years FP Comment has inveighed against the Ontario government’s profoundly uneconomic and costly electricity regime, a dictatorial and monopolist system that uses taxes and subsidies to greenify the power system of the largest provincial economy in Canada.  As I wrote in 2009: “In the midst of a major economic meltdown, and with looming budget deficits totaling more than $18-billion, now might not be the best time for the government of Ontario to be embarking on a crushing new green energy policy that could add billions to the province’s electricity costs. But Ontario Premier Dalton McGuinty is nothing if not immune to the folly of his own righteous policies and the fiscal crisis he faces as a result.”
Since then, via former Canadian banker Parker Gallant’s ongoing series — Ontario’s Power Trip — along with reports from consultant Tom Adams and many others, the growing absurdity of the regime has been detailed and documented on this page: Rising costs, market distorting feed-in-tariffs, subsidies to wind and solar, exports of power to New York at below cost — not to mention the $1-billion scandal over cancelled gas plants.
The burden on the economy has yet to be fully measured, but the cost to consumers is easy to identify.  In 2007, the all-in retail price of electricity was 10.38 cents per kilowatt hour. Today, the price for the same electricity is about 15.5 cents — a 50% increase imposed on consumers despite a recession that saw economic growth fall along with electricity demand.

Read the entire column  here.

Germany and renewables: electricity now a “luxury”

We’re a couple of days behind on this report but it’s worth a read, if only to heartily wish Ontario had looked at everything Germany is now going through with wind power: the highest electricity bills in Europe, people unable to pay, hardship for seniors and young families…When Ontario gets to the level where our bills are the highest in North America, we will be raising the bar on complete policy failure.

Here is the article from Der Spiegel:

Germany’s Energy Poverty: How Electricity Became a Luxury Good

By SPIEGEL Staff
Photo Gallery: The Costs of Green Energy

Photos

DPA
Germany’s agressive and reckless expansion of wind and solar power has come with a hefty pricetag for consumers, and the costs often fall disproportionately on the poor. Government advisors are calling for a completely new start.

If you want to do something big, you have to start small. That’s something German Environment Minister Peter Altmaier knows all too well. The politician, a member of the center-right Christian Democratic Union (CDU), has put together a manual of practical tips on how everyone can make small, everyday contributions to the shift away from nuclear power and toward green energy. The so-called Energiewende, or energy revolution, is Chancellor Angela Merkel’s project of the century.

“Join in and start today,” Altmaier writes in the introduction. He then turns to such everyday activities as baking and cooking. “Avoid preheating and utilize residual heat,” Altmaier advises. TV viewers can also save a lot of electricity, albeit at the expense of picture quality. “For instance, you can reduce brightness and contrast,” his booklet suggests. Altmaier and others are on a mission to help people save money on their electricity bills, because they’re about to receive some bad news. The government predicts that the renewable energy surcharge added to every consumer’s electricity bill will increase from 5.3 cents today to between 6.2 and 6.5 cents per kilowatt hour — a 20-percent price hike.
German consumers already pay the highest electricity prices in Europe. But because the government is failing to get the costs of its new energy policy under control, rising prices are already on the horizon. Electricity is becoming a luxury good in Germany, and one of the country’s most important future-oriented projects is acutely at risk.
After the Fukushima nuclear accident in Japan two and a half years ago, Merkel quickly decided to begin phasing out nuclear power and lead the country into the age of wind and solar. But now many Germans are realizing the coalition government of Merkel’s CDU and the pro-business Free Democrats (FDP) is unable to cope with this shift. Of course, this doesn’t mean that the public has any more confidence in a potential alliance of the center-left Social Democrats (SPD) and the Greens. The political world is wedged between the green-energy lobby, masquerading as saviors of the world, and the established electric utilities, with their dire warnings of chaotic supply problems and job losses.
Even well-informed citizens can no longer keep track of all the additional costs being imposed on them. According to government sources, the surcharge to finance the power grids will increase by 0.2 to 0.4 cents per kilowatt hour next year. On top of that, consumers pay a host of taxes, surcharges and fees that would make any consumer’s head spin.
Former Environment Minister Jürgen Tritten of the Green Party once claimed that switching Germany to renewable energy wasn’t going to cost citizens more than one scoop of ice cream. Today his successor Altmaier admits consumers are paying enough to “eat everything on the ice cream menu.”
Paying Big for Nothing
For society as a whole, the costs have reached levels comparable only to the euro-zone bailouts. This year, German consumers will be forced to pay €20 billion ($26 billion) for electricity from solar, wind and biogas plants — electricity with a market price of just over €3 billion. Even the figure of €20 billion is disputable if you include all the unintended costs and collateral damage associated with the project. Solar panels and wind turbines at times generate huge amounts of electricity, and sometimes none at all. Depending on the weather and the time of day, the country can face absurd states of energy surplus or deficit.
If there is too much power coming from the grid, wind turbines have to be shut down. Nevertheless, consumers are still paying for the “phantom electricity” the turbines are theoretically generating. Occasionally, Germany has to pay fees to dump already subsidized green energy, creating what experts refer to as “negative electricity prices.”
On the other hand, when the wind suddenly stops blowing, and in particular during the cold season, supply becomes scarce. That’s when heavy oil and coal power plants have to be fired up to close the gap, which is why Germany’s energy producers in 2012 actually released more climate-damaging carbon dioxide into the atmosphere than in 2011.
If there is still an electricity shortfall, energy-hungry plants like the ArcelorMittal steel mill in Hamburg are sometimes asked to shut down production to protect the grid. Of course, ordinary electricity customers are then expected to pay for the compensation these businesses are entitled to for lost profits.
The government has high hopes for the expansion of offshore wind farms. But the construction sites are in a state of chaos: Wind turbines off the North Sea island of Borkum are currently rotating without being connected to the grid. The connection cable will probably not be finished until next year. In the meantime, the turbines are being run with diesel fuel to prevent them from rusting.
In the current election campaign, the parties are blaming each other for the disaster. Meanwhile, the federal government would prefer to avoid discussing its energy policies entirely. “It exposes us to criticism,” says a government spokesman. “There are undeniably major problems,” admits a cabinet member.
But this week, the issue is forcing its way onto the agenda. On Thursday, a government-sanctioned commission plans to submit a special report called “Competition in Times of the Energy Transition.” The report is sharply critical, arguing that Germany’s current system actually rewards the most inefficient plants, doesn’t contribute to protecting the climate, jeopardizes the energy supply and puts the poor at a disadvantage.
The experts propose changing the system to resemble a model long successful in Sweden. If implemented, it would eliminate the more than 4,000 different subsidies currently in place. Instead of bureaucrats setting green energy prices, they would be allowed to develop indepedently on a separate market. The report’s authors believe the Swedish model would lead to faster and cheaper implementation of renewable energy, and that the system would also become what it is not today: socially just.
Trouble Paying the Bills
When Stefan Becker of the Berlin office of the Catholic charity Caritas makes a house call, he likes to bring along a few energy-saving bulbs. Many residents still use old light bulbs, which consume a lot of electricity but are cheaper than newer bulbs. “People here have to decide between spending money on an expensive energy-saving bulb or a hot meal,” says Becker. In other words, saving energy is well and good — but only if people can afford it.
A family Becker recently visited is a case in point. They live in a dark, ground-floor apartment in Berlin’s Neukölln neighborhood. On a sunny summer day, the two children inside had to keep the lights on — which drives up the electricity bill, even if the family is using energy-saving bulbs.
Becker wants to prevent his clients from having their electricity shut off for not paying their bill. After sending out a few warning notices, the power company typically sends someone to the apartment to shut off the power — leaving the customers with no functioning refrigerator, stove or bathroom fan. Unless they happen to have a camping stove, they can’t even boil water for a cup of tea. It’s like living in the Stone Age.

Once the power has been shut off, it’s difficult to have it switched on again. Customers have to negotiate a payment plan, and are also charged a reconnection fee of up to €100. “When people get their late payment notices in the spring, our phones start ringing,” says Becker. In the near future, an average three-person household will spend about €90 a month for electricity. That’s about twice as much as in 2000.
Two-thirds of the price increase is due to new government fees, surcharges and taxes. But despite those price hikes, government pensions and social welfare payments have not been adjusted. As a result, every new fee becomes a threat to low-income consumers. Read more at http://www.spiegel.de/international/germany/high-costs-and-errors-of-german-transition-to-renewable-energy-a-920288.html

Hydro One, Energy Ministers: getting ‘smarter’? You be the judge!


Three bills in three weeks from Hydro One and a new line on the bill: “Miscellaneous Adjustment” got this writer wondering, why?  The first bill came with an insert with the heading “Important Information about your enclosed Hydro One bill” and went on to explain that after they had “changed the meter at your premises, we experienced an issue which prevented the data from your meter from being processed in a timely manner in our system.”   The meter they changed was a “smart meter” Hydro One installed a few years ago, so I assume this is a “smarter” meter.  Calling the number on the insert allowed me to confirm with Hydro One  that the meter change was due to a “communication problem.”
   The upsetting part of the final bill is that when the all-in price of my power is calculated (including the costs of electricity, delivery, regulatory and debt retirement charge) it turned out to be 29 cents a kilowatt hour (kWh) and when I looked at my bill from November 2008 the all in charge was 16.5 cents a kWh.  So in less than five years, the price had risen by 81%.
   We’re doing our best to be responsible power consumers: we consumed less power than before and 71% of the billed electricity was in “off-peak” hours. 
   If one looks back this is what then Premier McGuinty said in his Throne speech of October 12, 2005 about smart meters: “Consumers can look forward to getting smart meters that will help them save money by telling them when they can pay less.
    An 81-% increase? Sounds like another broken government promise!
   Those who have Hydro One as their local distribution company (LDC) will recall that only a few months ago, they sent another insert about a “new billing system”  which allows them to bill on a “real time” basis.   In effect this was a $160-million grab from ratepayers, perhaps to ensure their profits grow and that they can continue to pay dividends to the Province ($370 million in 2012).  Profitability however, doesn’t cover off employee pension and benefit requirements as noted by DBRS, the Canadian bond rating agency, who listed Hydro One as # 8 on their recent list of worst funded pensions in Canada. Perhaps they should be funding their pension fund instead of making big dividend payments to the Ontario Ministry of Finance, but that might force Finance Minister Sousa to make some tough spending decisions.
   My comments on “smart meters” are not new: back in July 2010I pointed out that in a 3,400-page submission by Hydro One for a rate increase, the installed cost per smart meter was $700.54. That was confirmed by an exchange with a Hydro One officer.  Now, the smart meters are having to be replaced? And not for the first time: Hydro One has needed to replace smart meters back in 2010 when the Newmarket Eracarried an article about meter replacement in Keswick, Sutton and Mount Albert. My suspicion is that the form letter in our recent bill wasn’t the only one: who else in Prince Edward County and other parts of the province got it?
  So, now,  one wonders about the promises made for those smart meters. At $700.54 cents per meter the cost of replacing the old analog meter at our place is now $1,400.00; the Hydro One 2012 Annual Report indicates they are charging $1.52 per month as a recovery cost.  At that rate, it will take them 76 years to recover their costs. Will Hydro One be spending hundreds of millions each year on “smart meters” instead of upgrading the important infrastructure such as transmission lines, transformers, etc.?
   An interesting story recently came out of Germany: the German Federal Ministry of Economics published a studyby Ernst & Young which basically concluded, no rollout for smart meters.  Why? Ernst & Young did a cost/benefit study and concluded:
The study comes to the conclusion that smart meters in particular for small consumers are not cost-efficient, as the potential savings would be well below actual costs of smart meters and their operation.”
Cost-benefit analysis and other studies: not necessary for decisions by the Ontario government
   In Ontario we seem to do things differently as was pointed out by the Auditor General in his 2011 report. Jim McCarter said that the initiatives behind the Green Energy and Green Economy Act were not based on a cost-benefit analysis.  While not speaking directly to the issue of “smart meters” and their installation throughout the province this writer believes that the conclusions of a cost-benefit analysis would have reached the same endpoint as the Ernst and Young study completed for Germany.
    When the McGuinty government gave its Throne Speech in 2005, the Ontario Energy Minister (Dwight Duncan) had already issued a directive to the Ontario Energy Board (OEB) dated July 14, 2004to Howard Wetson, Chair, of the OEB (the Ontario Power Authority did not exist at that time) which instructed them to “implement a plan to achieve the government’s objectives for the deployment of smart electricity meters. 
   No cost-benefit study was considered and Minister Duncan’s directive to the OEB simply had to be “formalized” before the media picked up on the government’s manipulation of the electricity sector without going through the legislature or a hearing before a legislative committee! With a single signature Duncan committed Ontario’s ratepayers to pick up a bill for at least $2 billion!
   Several years after that 2005 Throne Speech and the Dwight Duncan directive, Tyler Hamilton (the “expert” commentator as noted by Alicia Johnston in e-mails recently released by the government and commented on by Tom Adams) wrote an article for the October 7, 2010 Toronto Star.  The article was all about “smart meters” and the wonders they would perform for all of the ratepayers in Ontario.  It contained quotes from an IBM “technology consultant” including this one:  “ ‘Right now, Ontario is a world leader in the smart grid and smart meter systems,’ he explained. ‘Dozens of utilities around the world are watching what’s going on here. In a way, we have become a micro lab for the rest of the world.’  
    Later on in the article Hamilton makes this comment:  With smart meters…we have a tool that helps us to at least manage our electricity bill and help offset electricity rate increases.”
   Did Tyler Hamilton, the “expert” commentator, really understand what he was endorsing? I believe most ratepayers in the province have received absolutely no benefit from either “smart meters” or the “smart grid” –neither one has done nothing to improve the aging infrastructure in the Province or “help offset electricity rate increases.” 
   Germany, whom we copied on the FIT and MicroFIT programs apparently didn’t see it with the clarity of Tyler Hamilton or that IBM technology consultant. 
   Mr. McGuinty is now at Harvard and presumably living in Massachusetts where the average cost of power is about half of what I am being charged. I wonder if he and former Minister Duncan now appreciate the “green” mess they created. 
   Worse, power utilities around the world must now be laughing up their sleeve at the wasted money Ontario’s ratepayers are forced to absorb.  The “microlab” referenced by the IBM technology consultant has turned out instead to be an incinerator for our hard earned dollars!
Parker Gallant,
September 7, 2013
Next time, we will look at the “smart grid”
The opinions expressed here are those of the author and do not necessarily represent policies of Wind Concerns Ontario.