Suggestions for Ontario’s power bill crisis

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Global TV News published a summary of opinions by several commentators on how the Government of Ontario might deal with the crisis in electricity bills, which is causing unprecedented energy poverty.

Wind Concerns Ontario was pleased to be asked to contribute to the special news feature found here and excerpted below.

The following is by both Parker Gallant, a retired banker who now analyses Ontario’s energy sector and is the author of the blog “Energy Perspectives” as well as Jane Wilson, the president of Wind Concerns Ontario.

The Ontario government undertook its program to add renewable power without proper cost-benefit or impact analysis.

Now we have electricity bills that are the fastest rising in North America. The rich contracts awarded to huge corporate wind power developers are a factor.

Here’s what we suggest:

Immediately cancel Large Renewable Procurement (LRP) II that is currently “suspended.” With its target of acquiring 1,000 megawatts (MW) of more renewable capacity — it’s not needed and will further add to consumers’ power bills.

Cancel the five wind power contracts awarded in 2016 under LRP I and save electricity customers about $65 million annually or $1.3 billion over 20 years. Cancellation costs will amount to a small fraction of the annual cost. Cancelling approved but not yet built wind power projects and the new FIT 5.0 program will also save money.

Cancel “conservation” spending of $400 million annually. Ontario has already cut back on power use by more than 12 per cent since 2005 when consumption was 157 tWh to 2015 when it had fallen to 137 tWh. Do this and save immediately on electricity bills.

Read More: Kingston Hydro cuts off single mom who chose groceries over utility bill

Move the Ontario Electricity Support Program to the Ministry of Community and Social Services, where this social assistance program really belongs. Electricity customers should not bear the burden of its costs. The move would create a budget shortfall so we recommend the following action:

Levy a tax on wind (and solar) power generation. The auditor general reported that 20-year wind and solar contracts exceed those in other jurisdictions — the tax would help correct that.

Last, reduce the Time of Use (TOU) off-peak rate. This would encourage the shift of power consumption from peak to off-peak time in order to flatten daily demand, with less waste of hydro and nuclear power, and intermittent wind.

Let’s stop adding expensive, intermittent power to our system and stop punishing Ontarians.

WYNNE GOVERNMENT SHOULD CANCEL WIND POWER CONTRACTS FOR HYDRO BILL RELIEF

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NEWS RELEASE

November 21, 2016

Wind Concerns Ontario welcomes the acknowledgement by Premier Kathleen Wynne of financial hardship imposed by her government’s energy policies, and has sent six recommendations for action that will provide immediate relief.

“We know that energy poverty in Ontario is real and worsening under this government,” says WCO president Jane Wilson. “Hundreds of thousands of people are having difficulty paying their electricity bills, and many are having to choose between ‘heat and eat.’ Meanwhile, corporate power developers are getting paid huge profits in Ontario – this has to change, now.”

Wind Concerns Ontario sent the Premier a list of recommendations: 

  1. Immediately cancel LRP II renewable power program. Currently “suspended,” its target was to acquire 1,000 megawatts (MW) of power, even though the government says we have a “robust” supply of power for the future. The cost of this new capacity would go straight to Ontario’s electricity bills
  2. Cancel the five wind power contracts awarded under LRP I for 299 MW. This action will save ratepayers about $65 million annually and $1.3 billion over 20 years. Cancellation costs will amount to a small fraction of the annual cost, probably on the order of about $2 million, at most. In addition, cancelling approved but not yet built wind power projects, and the new FIT 5.0 program will also save money. Together, these cancellations can save ratepayers from future rate increases of nearly $4 per month.
  3. Cancel “conservation” spending of $400 million annually. This action would have an immediate effect on ratepayers’ bills, reducing them by $5.50 per month or about $70 a year. Ontario’s ratepayers have already reduced their consumption from 157 TWh in 2005 to 137 TWh in 2015, for a significant 12.7% decrease.
  4. Allocate the Ontario Electricity Support Program (OESP) to the Ministry of Community and Social Services. The OESP is essentially a social assistance program and it is questionable as to whether ratepayers should bear the burden of its costs. With an estimated annual cost of $200 million, the effect of this would be an immediate savings of about $4 per month on ratepayers’ bills, and an annual savings of $50. We recognize, however, that the move would impact the budgetary shortfall by a like amount so we recommend the following action.
  5. Levy a tax on wind and solar power generation on a per-megawatt basis starting at $10 per/MWh. This would result in raising sufficient revenues to offset the OESP costs. The effective rate could be held at that level or increased in the event the OESP costs exceed the forecast $200 million per annum. The Auditor General previously reported the award value per MWh of the 20-year contracts to wind and solar power developers exceeded those in other jurisdictions by a considerable margin. The tax would serve as a recognition of those excessive margins. (Note: the wind power contracts also contain cost of living increases of up to 20% over the term of the contracts.)
  6. Immediately reduce the Time of Use (TOU) off-peak rate. We recommend an immediate reduction in the TOU off-peak rate from 8.7 cents/kWh to 7.4 cents/kWh to encourage the shift of power consumption from peak to off-peak time in order to flatten daily demand.

“Poverty is a major factor in population health,” says Wilson, a Registered Nurse. “It is time Ontario takes action to help people now, and not cause further hardship for Ontario families.”

Wind Concerns Ontario is a coalition of community groups, individuals and families concerned about the impact of industrial-scale wind power development on the economy, on the natural environment, and on human health in Ontario.

 

Contact:

Jane Wilson, President: president@windconcernsontario.ca

Parker Gallant, Vice-president: parker.gallant@gmail.com

Cancel the contracts, Minister Thibeault (we’re asking again)

It’s been quite windy the last few days in Ontario, as it often is in the fall. Temperatures have been mild, too — all that stacks up not only to a beautiful fall but a very expensive few days for Ontario’s electricity customers, already hard-hit by their power bills which are the fastest rising in North America.

Parker Gallant has done the analysis on a single day last week, November 10, which he says points out everything that is wrong with Ontario’s electricity policy. Too much power produced when we don’t need it means cheap exports to our neighbours and more expense for Ontarians.

Here’s an excerpt from his recent blog posting:

November 10th serves as a perfect example of what’s happening to electricity customers in Ontario: that day, the government’s electricity policy shows we reward huge corporate wind power developers and it also highlights the intermittent nature of power generation from wind — it is out of phase with demand.

November 10 should be the basis of a message to the Minister of Energy, Glenn Thibeault on the Large Renewable Procurement (LRP) program: Ontario should cancel both the LRP I contracts awarded last April and cancel the now “suspended” LRP II process.  The Minister has already admitted our electricity supply is more than adequate for the next 10 years (“robust” in fact, he says) so acquiring more wind generated power (and solar) should be immediately suspended. It does nothing other than drive up the costs for “average” households.

The $9.4 million of ratepayer dollars handed out November 10 neither reduced emissions nor provided useful electricity. Time for a complete overhaul of electricity policy in Ontario, starting with those contracts and the LRP process.

When the subject of cancelling contracts (which is government’s right) comes up, the immediate response from the influential wind power lobby is that to do so will incur lawsuits, and wreck Ontario’s reputation in the business/investment world. The fact is, anyone knows that building your business on a subsidy program is not good planning; it’s also true that the Ontario government included “off-ramps” in the latest contracts, so that it could change its mind if the power is not needed, and pay out the power developers’ documented expenses.

Here are the details for the five contracts awarded by the IESO last spring.

Project name Capacity MW 20-yr cost $ Max payout liability $
Otter Creek 50 218 million 500,000
Romney Wind 60 261 million 520,000
Strong Breeze 57 250 million 515,000
Eastern Fields 32 139 million 464,000
Nation Rise 100 436 million 600,000

Source: data from IESO contracts

So, in the case of Strong Breeze, for example, in the community of Dutton Dunwich which resoundingly expressed its Not A Willing Host status but got a wind power project anyway, the government could get out of a $250-million contract by paying, at most, $515,000. Similarly, Nation Rise, in another unwilling host community, could be cancelled for a maximum liability of $600,000 and save Ontario electricity ratepayers from having the $436 million cost added to their bills.

Let’s go farther! Among the projects with Renewable Energy Approvals (REAs) but not yet operating, are the much contested White Pines in Prince Edward County and the Windlectric project on Amherst Island, both of which are in legal battles and both are in danger of not meeting their contracted Commercial Operation date. Cancelling them would save a lot of wildlife and also save Ontario electricity customers almost $1 billion.

Mr Gallant says that November 10 is emblematic of what’s wrong with Ontario’s electricity policy; we add, why buy more power Ontario doesn’t need and inflict more damage on the natural environment and Ontario’s rural communities, when the answer is so simple.

Cancel the contracts, Minister Thibeault.

Ontario to add 150 megawatts of unneeded power under FIT 5.0

IESO: Still giving away money for power we don’t need …

November 3, 2016

It may have escaped notice with everything else that’s going on, and the attention being paid to the billions lost in the Ontario government’s handling of the energy/electricity portfolio, but the Wynne government –despite an assertion by the Independent Electricity Systems Operator (IESO)  that Ontario has a surplus of power and therefore the Large Renewable Procurement II was suspended — began accepting bids this week for its FIT 5.0 program.

FIT 5.0 will give out contracts for up to 150 megawatts of renewable power generation; equipment must be less than 500 kW.

Already, power developers are seeking municipal support to tot up points for the bid process, apparently circumventing the 500 kW limit by gluing individual “projects” together.

Just this week, Brant County was asked to support a project by Germany-based Prowind for five to ten turbines, each of which would be 500 kW.

There are more.

The Ontario government should cancel this program too to save Ontario ratepayers from paying for more power we don’t need, and paying still more on our electricity bills, the fastest rising bills in North America.

For information on FIT 5.0 see this.

For the Brant County story, click here.

Prowind's Head Office in Hamilton until 2013
Prowind’s Head Office in Hamilton until 2013

Watch for the “Catch 22” and other terms in wind power leases, lawyer says

In this week’s edition of Ontario Farmer is an article by retired QC Garth Manning and Wind Concerns Ontario president Jane Wilson, advising landowners to get legal advice before signing any lease or option to lease for wind power projects and associated equipment.

Although Large Renewable Procurement II is “suspended” the government fully intends to bring it back (after the 2018 election), and the FIT 5.0 process is currently accepting applications for wind power projects with equipment less than 500 kW. (See story today about Brant County being approached for support here.)

Wind power contracts can be very one-sided ... and not in favour of the landowner, says an Ontario lawyer
Wind power contracts can be very one-sided … and not in favour of the landowner, says an Ontario lawyer

Here is the article:

Clients need help with complex wind turbine lease documents

In answer to Ontario citizens’ concerns about rising electricity bills and the fact that Ontario now has a surplus of power, the provincial government suspended its process to accept new bids for wind and solar power in 2017.

While the process is on “hold,” wind power developers are still holding open houses and prospecting for willing landowners to sign Options to Lease land for wind turbines and associated equipment, in hope the contract process will resume after the provincial election in 2018.

Landowners should know that these are very complex documents and they need legal advice before signing. Some option/lease agreements contain a box to be checked that means the landowner has read the agreement and waives legal advice. That may not be the smart move. The Ontario Federation of Agriculture, for example, advises members to seek legal advice before signing.

Why? There are many implications to signing an Option to Lease (which converts to a Lease if the company gets a power contract) including rights to use of the property, first right of refusal at time of sale or if the owner wishes to sever property, even the ability to speak out if there are side effects of having turbines on the land.

The fact is, current forms of options/leases are very one-sided in favour of the wind power developer and should be reviewed literally word for word by an independent lawyer. It’s easy to focus on the dollar amount offered by the developer, and ignore other, important aspects of the agreement. For example, some leases contain cancellation options for the power developer, but most do not provide any option for the landowners to terminate the agreement if they change their minds.

Wind power developers always create a separate corporation to own and operate each project. Its assets include, in Ontario, the Renewable Energy Approval, the contract with the government to supply power, the options/leases for the land for turbines and equipment, and any agreements such as for road use with municipalities.

These corporations are usually mortgaged to the hilt. All assets can be sold to another company without consent of the landowners; the buyer could be a dummy company without assets, which is unwilling or unable to perform any obligation of the original company, including, the decommissioning or dismantling of the huge towers.

There are key financial considerations to consider above the lease amount: having a lease on the property may affect the owner’s ability to use the land as collateral for financing; construction liens may also be filed against the project and will appear on the landowner’s title. …

Read the full article here. windfarmcontractscomplexnovember-2016

Ontario government sees citizens as ‘enemies of the state’ says newspaper editor

Premier Wynne: fighting you ... with your own money
Premier Wynne: fighting you … with your own money

Rick Conroy, editor of the independent Wellington Times says the Ontario government has “turned against its people.” He cites the numerous examples of citizen groups forming and paying for legal actions to protect their communities against the government, and more recently, Ontario Premier Kathleen Wynne labeling Ontarians as “bad actors” when it comes to the environment.

In his editorial, he asks why, why it comes to huge wind power projects, “… What drives elected officials to use the state’s power and resources against those working to protect the natural world it has abandoned?”

We got a glimpse last week when Kathleen Wynne defended her government’s cap and trade emmissions scheme. She told a business audience in Niagara Falls that Ontarians are “very bad actors” in terms of per capita emissions of greenhouse gases. It wasn’t a slip of the tongue—or offhand remark. These words were part of a scripted speech.

Fortunately for the wretched folks in this province, we have a premier who understands good and bad—better than we do. She has unveiled the selfish and narrow view through which we see the world around us. Kathleen Wynne will be our better selves.

In this morality play your provincial government has decided it will not work in your interest— but rather what it believes your interest ought to be. It knows this better than you. Kathleen Wynne, and Dalton McGuinty before her, believe they know what is best, and cling to the hope that history will judge them better than Ontario’s weak and myopic voters do now.

Maybe.

But untethered by accountability to its voters and deaf to its ministries’ advice and counsel, provincial Liberals have made a terrible mess of the energy supply system in Ontario. It will take decades to fix. It has squandered billions of dollars chasing schemes unworthy of a Nigerian postmark. It has pushed manufacturing jobs out of the province. And it has rendered electricity bills that are unaffordable for many of its poorest rural residents. Meanwhile, it has made a select group of developers very, very wealthy.

In turn, they have dutifully filled her parties’ coffers— to arm her for the next election.

How is it that the most righteous tend to be the most susceptible to corruption and misdeeds? There is something distinctly Shakespearean in this tragedy.

 

Read the full article here.

Power developer to hold open house for 100-megawatt project

South Dundas councillors and staff, spokesmen from EDP Renewables and local residents chat about the proposed South Branch Wind Farm II project during an open house Aug. 5, 2015 at Matilda Hall in Dixons Corners. (Cornwall Newswatch/Bill Kingston)

North Stormont is an unwilling host community … but a foreign power developer got a contract anyway [Photo Cornwall NewsWatch]

October 21, 2016

Portugal-based power developer EDP Renewables has scheduled an Open House in Finch, Ontario, for its 100-megawatt,  “Nation Rise” wind power project in the Township of North Stormont.

The power project could have as many as 30 industrial-scale wind turbines; it will cost the people of Ontario more than $436 million over the 20-year contract period.

The contract was one of five awarded earlier this year through the Large Renewable Procurement process by the Independent Electricity System Operator (IESO). The IESO has since suspended the contract process planned for 2017 saying Ontario has a surplus of power and more is not needed.

North Stormont is officially an unwilling host or Not A Willing Host community, one of almost 100 in Ontario.

Community members have formed a group, Concerned Citizens of North Stormont and have vowed to fight the power project which they say is not appropriate for their community, will raise Ontarians’ electricity bills (the fastest rising in North America) even higher, and will result in no appreciable benefit to the environment.

 

Road Map for Finch Community Centre (North Stormont Arena)

 

 

More action needed on hydro bills, say Ontario mayors

The Mayor of North Frontenac has written to Energy Minister Glenn Thibeault on behalf of all the 115 municipalities demanding change to the Large Renewable Procurement process. While relieved the next round of bids is “suspended,” he says, the municipalities say more can be done to stop the dramatic rise of Ontario electricity bills.

NorthFrontenac

October 5, 2016

Mayors across Ontario who united together as  a result of a resolution being supported to have municipal support mandatory for industrial wind turbines are relieved that procurement of future wind power has been cancelled for now. The Mayors still feel however that the government needs to take very aggressive actions to address the ongoing crisis caused by high electricity costs in this province. Taking steps to not add $2.45 per month in 2020 does not address the real hardship being felt by our residents now.  It is also not clear that the other measures announced by the government will even offset the ongoing increases in hydro rates that can be expected in the short term unless additional changes are made.

It was important that the Minster of Energy’s statement confirmed that the province has a “robust” supply of electricity and the procurement process could be cancelled without increasing greenhouse gas emissions.  This provides room for more aggressive actions that will address increasing costs. Our tracking of wind turbine contracts shows that there are still many wind turbine projects in the pipeline that will add at least another $7.9 billion to electricity generating costs.  This is equivalent to another $82 per annum for each Ontario electricity user. Seven of these projects are under construction but will not be connected to the grid until sometime this fall or in 2017.  Another five have not been issued ‘Notices to Proceed’ as they are, or have been until recently, involved in Environmental Review Tribunal proceedings or other legal appeals of Renewable Energy Approvals. The final six projects are in the pre-MOECC submission stage.  These include the five contracts issued in early 2016 plus one outstanding project from earlier FIT offers.

In all of these cases, the IESO has the option of terminating the agreement for any reason with very limited cost liabilities relative to the 20 year commitment to electricity that is not required.  We respectfully ask that all industrial and solar wind projects be cancelled to avoid ongoing costs to our residents.

Ron Higgins

Mayor, North Frontenac

Councillor, County of Frontenac

Phone 613-884-9736

Email ron.higgins@xplornet.com

Twitter @HigginsRon

Facebook

 

See the letter sent to the Energy Minister, here. lettertoenergyminister-oct52016

 

Mayor Higgins (Photo CBC)
Mayor Higgins (Photo CBC)

Cancel the contracts, Minister Thibeault

Energy Minister Glenn Thibeault: more power we don't need soon to come to the grid ... and your hydro bill
Energy Minister Glenn Thibeault: more power we don’t need soon to come to the grid … and your hydro bill

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.

Ontario suspends Large Renewable procurement

September 27, 2016

Moments ago, the Wynne government announced it is suspending its controversial Large Renewable Procurement program for sources of power such as wind and solar.

“Ontario will immediately suspend the second round of its Large Renewable Procurement (LRP II) process and the Energy-from-Waste Standard Offer Program, halting procurement of over 1,000 megawatts (MW) of solar, wind, hydroelectric, bioenergy and energy from waste projects. …

On September 1, 2016, the Independent Electricity System Operator (IESO) provided the Minister of Energy with the Ontario Planning Outlook, an independent report analyzing a variety of planning scenarios for the future of Ontario’s energy system. The IESO has advised that Ontario will benefit from a robust supply of electricity over the coming decade to meet projected demand.”

Wind Concerns Ontario (and two Auditors General for Ontario) has been saying for years that a cost-benefit analysis of the renewable energy program was never done, and should have been.

“Now, the impacts of this program are clear,” says President Jane Wilson.”We have unsustainable and punishing rises in electricity bills for the people of Ontario, with a corresponding rise in rates of energy poverty, while there is no evidence of any environmental benefit. In fact, there are widespread concerns about the damage being done to the environment from this high-impact form of power generation.”

Wind Concerns Ontario says that in addition to suspending the Large Renewable Procurement program, contracts for power projects not yet under construction need to be cancelled immediately.

“The government admits it has adequate power,” Wilson says. “There is no need to continue this assault on Ontario citizens, on our economy, and on the natural environment for little or no benefit.”

 

president@windconcernsontario.ca