Michigan’s economy benefits from cheap Ontario power

Two Auditors General in Ontario have noted that the government never did any cost-benefit study on its renewable energy program; moreover, wind power is produced out-of-phase with demand in Ontario, and is a significant portion of the surplus power the province is forced to sell off cheap. Parker Gallant comments on who is really benefitting from Ontario’s energy management policies.

Wind turbines near SS Marie: power supply sell-off  (National Post photo)
Wind turbines near SS Marie: power supply sell-off (National Post photo)

Michigan outperforms Ontario. And why not? They have our cheap power

Parker Gallant Energy Perspectives

September 6, 2016

The state of Michigan is outperforming Ontario. That’s according to a recent study by the Fraser Institute. Since the end of the “’Great Recession” Michigan has out performed Ontario, increasing their GDP in 2013 by 2.8% versus Ontario’s growth of only 1.3%.  Unemployment levels in Michigan are currently at 4.6% versus Ontario’s 6.4%. Those are two very important  economic indicators.

That news plus the fact Ontario has become a “have not” province in Canada, it seems policies adopted by the Ontario Liberal government to “build Ontario up” is having the opposite effect.

One of those policies resulted in Ontario’s electricity sector focusing on acquisition of renewable energy from industrial-scale wind turbines, solar panels and biomass. The passing of the Green Energy Act (GEA) in 2009 resulted in adding intermittent and unreliable renewable energy that is unresponsive to demand (wind power is produced out-of-phase with demand in Ontario).   This had the effect of driving down the price of electricity.

The free market trading (HOEP) of electricity has resulted in Ontario exporting a rising percentage of our generation to buyers in Quebec, NY and Michigan, with the latter the biggest buyer.   In 2015 Michigan purchased 10,248 gigawatts (GWh) or enough to power1.1 million “average” Ontario residential households. We sold it at an average of 2.36 cents per kilowatt hour (kWh) and were paid $242 million, but it cost Ontario’s ratepayers just over $1 billion.

Michigan doesn’t have to pay the Global Adjustment. You do.

Michigan appears delighted to be able to purchase our cheap subsidized electricity. Now they are seeking further transmission links to Ontario with an eye on the grid out of Sault Ste Marie.

Read the entire article here.

Billion-dollar burden: how Ontario bungled green energy

Wind turbines near SS Marie: power supply saturated by Ontario buying more wind. (National Post photo)
Wind turbines near SS Marie: power supply saturated but Ontario buying more wind. (National Post photo)

Worthy of a repost, from the National Post, this opinion from a renewable energy insider.

September 2, 2016

Ontario set an all-time peak electricity demand of 27,005 megawatts (MW) 10 years ago this summer. At the time, rising demand and plans to retire its coal-fired power plants dominated provincial energy policy. What followed was optimism for a new energy policy, focused on the ambitious procurement of large wind and solar installations. I felt great pride in helping to lead an industry that would make Ontario’s power system clean, responsive and cutting edge.

What a difference a decade makes. Intrusive policy and poor implementation are largely responsible for the energy market debacle Ontarians face today. But there is no excuse now for buying more mega-projects when our power supply is saturated and hydro bills are skyrocketing.

Coal-fired power generation effectively disappeared after 2010, by which time Ontario’s electricity demand had already started to plummet. Demand has fallen 13 per cent in the past 10 years, including consecutive reductions in each of the past five years. In 2016, Ontario will consume less electricity than in 1997.

Peak demand exceeded 23,000 MW only one day this summer, despite parts of the province seeing 35 days with temperatures above 30 C. Yet our installed capacity approaches 40,000 MW. The system will have reserves above extreme summer peaks well into the 2020s. The Independent Electricity System Operator (IESO) reinforced this point recently when it confirmed “Ontario will have sufficient supply for the next several years.”

Against this troubling background, the Ontario government is procuring an additional 1,300 MW of large wind and solar generation under the Large Renewable Procurement (LRP) program. This decision is indefensible. It makes the frequency of negative pricing (paying our U.S. neighbours to take Ontario energy during periods of low demand) and curtailment (paying wind developers for energy production even when the grid can’t use the power) even worse. These problems have become billion-dollar burdens for Ontario electricity customers.

Sweet contracts, painful electricity bills

Offering sweet contracts to large renewable energy developers while demand stagnates has helped push hydro bills higher. Electricity prices have increased by seven per cent a year since 2009. Costs have risen faster than Ontario’s inflation rate in each of the past several years. The province’s electricity rates are increasing faster than any other jurisdiction in North America.

It’s clear that change must begin with the renewable industry, since our industry alone benefits from the continued overprocurement of electricity. The fact is large wind and solar developers have been pampered by Queen’s Park for far too long. Although solar installation costs dropped 70 per cent in the past decade, the government froze prices for years at a time. When permitting delays enabled projects to be built as much as five years after contracts were awarded, multi-millionaires were created overnight.

Today, with no logical reason to build more wind and solar mega-projects in Ontario, renewable developers must confront the economic damage they are doing to their families, friends and neighbours, and to the next generation of citizens who will bear the brunt of this green corporate welfare.

Renewable energy companies must confront the economic damage they are doing.

We need to make four changes. First, Ontarians must demand a return to basic electricity policy principles: safety, reliability and cost effectiveness. Second, the government should revisit the IESO’s legal obligations associated with the current LRP process and exit this procurement process without paying the ransoms that characterized Ontario’s gas plant debacles. Third, the IESO should restrict renewable procurement to the smaller rooftop and distributed energy projects that actually benefit customers. Fourth, Ontario renewable energy firms must learn to export their pioneering expertise and target new domestic and international markets.

The global renewable energy revolution has just started. Solar energy is increasingly the cleanest, cheapest and most environmentally sustainable option. The advent of battery storage, smart grids and the Internet of Things will catalyze innovative economies that embrace change. Renewables have a bright future in this world, but we need to regain control of Ontario’s failing electricity policies — and do it soon — to ensure we seize the energy opportunities of the 21st century.

National Post

Jon Kieran is a Toronto-based renewable energy consultant. He is  a member of the Canadian Solar Industries Association’s board of directors. He declines LRP work from clients.

Overkill: Ontario actions to replace closed coal plants cost billions every year

The annual cost of closing Ontario’s coal plants 

Part II of Parker Gallant’s series on how Ontario continues to mismanage the energy file.

The cost of over-replacing the limited capacity of coal power generation blows away the supposed health care savings
The cost of over-replacing the limited capacity of coal power generation blows away the supposed health care savings

The previous article in respect to Ontario’s decision to close our coal plants examined the MW (megawatt) capacity and the type of generating capacity added to our electricity grid since 2011. The added capacity replaced the 4,484 MW of coal-fired generation at the end of 2011 in anticipation of increasing demand.

What I’ve done is approximate the costs of the added capacity versus the 4.1 TWh generated by the 4,484 MW of coal-fired plants, which cost only $135 million (3.3 cents/kWh) in 2011. 

Nuclear instead of wind and solar

As an example, the 1,532 MW of emissions-free Bruce Nuclear refurbished generation, at a capacity factor of 90% supplying 12.08 TWh, easily covered the loss of 4.1 TWh of coal-fired generation and left 8.7 TWh for added demand due to its flexibility to steam off or bypass the turbines. The 12.08 TWh could have supplied most of the 2015 solar generation of 3.04 TWh and the 10.2 TWh of wind, which proved to be unneeded.   The latter two alone in 2015 added an additional $2.7 billion to generation costs before curtailment (wind) costs of $88 million.

Bruce Power supplies from the 1,532 MW would have cost ratepayers $800 million, reducing the ratepayer burden by almost $2 billion annually.  Additionally “nuclear maneuvers” (reductions),  of 897 gigawatt hours added about $60 million during surplus baseload periods, caused mainly by (unreliable) intermittent power generation from wind.

Too much gas? 

Let’s look at the gas plant addition of 602 MW:  In 2011 the 9,549 MW of gas generation produced 22 TWh,  operating at a capacity factor of 26.3%.  Fast forward to 2015: the 10,151 MW generated 15.5 TWh  operating at a capacity factor of 17.5%.  Gas plants are quite capable of operating at a capacity factor of 40% to 60% (combined or single cycle).  In either case, they are regarded as peaking plants and for that reason investors know they will be called on when needed. Their contracts pay them for simply being “at the ready.”  Those costs vary but generally payments are $7,000 to $15,000 per MW per month.  The additional 602 MW of gas added about $100 million annually to the costs.  With gas generation falling from 22 TWh in 2011 to 15.5 TWh in 2015, ratepayers were burdened with the costs of the drop of 6.5 TWh at a cost of approximately $100 million per TWh, raising the cost of gas generation by $750 million since 2011.

Adding costly hydro

The bulk of the 754 MW added to the grid since 2011 came from the Niagara tunnel, (“Big Becky”) with a promise of 150 MW, and the Mattagami expansion added 438 MW of run-of-river hydro. Both of these projects by OPG were hugely expensive, costing ratepayers $4.1 billion plus interest on the money borrowed to fund the projects. If one amortizes those costs over 50 years it adds about $80 annually to ratepayer bills and the interest costs annually add about $120 million at 3% per annum. So that is $200 million for those two projects, without adding their OMA (operations, management and administration) costs.

As well, OPG is frequently forced to “spill” water under SBG (surplus baseload generation) periods mainly due to excessive intermittent wind and solar generation. In 2015 the latter was 3.4 TWh which cost ratepayers $150 million.  The other event affecting hydro costs was an amendment to change “unregulated” hydro to regulated pricing.  This change added $474 million to ratepayers’ bills for 2015 for the 30.4 TWh generated by OPG versus 2011.  So hydro costs in the four years from 2011 jumped from a cost of $37.7 million/TWh to $53.3/TWh.  The total additional costs of hydro (OPG only) in 2015 was therefore over $800 million.

Coal conversion 

The Ontario Energy ministers also issued directives instructing conversion of the 200-MW Atikokan and the 300-MW Thunder Bay coal plants operated by OPG.  A 2005 directive from Dwight Duncan was the first and told OPG to convert Thunder Bay “to operate using a fuel source other than coal”.  Later on when Brad Duguid sat in the energy chair he ordered it converted to gas but in the end it became a shareholder direction from Bob Chiarelli, ordering it to be converted to “advanced biomass” and agreed to cover the annual $30 million operating costs.  As disclosed by the Auditor General, if Thunder Bay produces any power, it will cost $1,500 per megawatt hour (MWh).  In respect to the conversion of Atikokan it may produce cheaper power in the 20 cents/kWh range but will probably operate at 10% of capacity and generate an annual cost of about $35 million.  So collectively, both of these conversions will produce almost no power but will add approximately $65 million annually to ratepayers’ bills.

Conservation is expensive 

The long-term conservation budget for 2015-2020 is $2.6 billion, meaning IESO will allocate spending of $433 million annually to local distribution companies (LDC) to reduce consumption by 7 TWh.   Should the LDC be successful, their delivery revenue will drop.  Assuming the delivery charge represents about 35% (on average) the revenue drop for all LDC would be approximately $300 million.  Then the LDC will be entitled to apply for a rate increase based on the drop in revenue, meaning the $300 million may be fully recovered.  Adding that to the monies spent annually convincing us to reduce our electricity consumption via the “conservation budget” adds another $483 million annually ($433 million + [$300/6 years = $50 million] = $483 million).

$4 billion … a year

So the cost of replacing the 4.1 TWh of coal generated at a cost of about $135 million in 2011 is in excess of $4 billion annually.

Confirmation of the foregoing cost can be simply calculated. If one reviews the “average” cost of a kWh on the OEB “Historical Electricity Prices” as of November 1, 2011 was 7.57 cents/kWh versus 10.70 cents/kWh on November 1, 2015.  The increase of 3.13 cents/kWh (+41.3%) translates to an increase of $31.3 million per TWh and applied to the 143.6 TWh consumed in 2015 provides an annual cost increase of $4.5 billion to ratepayers since 2011.

The cost blows away the purported healthcare costs supposedly caused by coal generation.   At the same time, it removes about $1,000 of after-tax money from the pockets of the 4.5 million ratepayers in the province every year.

This is a sad commentary on what the Ontario Liberal government has done to Ontarians.

Parker Gallant,

August 29, 2016

Also available at Parker Gallant Energy Perspectives.

Save Ontario $500 million: cancel wind power contract, says community group

August 29, 2016

The Windlectric wind power project on tiny Amherst Island has no hope of meeting its “drop-dead” Commercial Operation date, so Ontario’s Independent Electricity System Operator (IESO) can cancel the Feed In Tariff (FIT) contract right now, with no penalty, says the Association to Protect Amherst Island.

See the letter to IESO Chair Tim O’Neill here and below.

header-12.jpg

Dear Dr. O’Neill,

In August 2015 The Association to Protect Amherst Island requested that the IESO exercise its ability to cancel the Fit Contract dated February 25, 2011 with Windlectric Inc. (Algonquin Power) without penalty because of the inability of the company to achieve its commercial operation date.

In its 2016 Q2 Quarterly Report, extract attached, Algonquin now advises that construction is expected to take 12 to 18 months and that the Commercial Operation Date will be in 2018. This timeline is contrary to what was submitted to the Environmental Review Tribunal and to the Ontario Energy Board. A COD of 2018 is seven years from the date of award of the contract.

Cancellation of the contract at this time would enable the IESO to achieve cost avoidance exceeding $500 million over the next 20 years based on the high cost of power generation at 13.5 cents per kilowatt-hour set out in the contract with Windlectric and based on the IESO’s commitment to pay Windlectric to not produce power when capacity exceeds demand. Cancellation of the Windlectric contract could be achieved without penalty due to noncompliance and would address in part the IESO’s budget challenges and energy poverty in Ontario.

Accordingly, the Association reiterates its request that IESO cancel the FIT Contract with Windlectric Inc.

Rick Conroy, in the attached article from the Wellington Times, explains the Kafkaesque and cruel nature of allowing the Amherst island project to continue especially in light of the unused power capacity of the nearby Lennox Generating Station and the Napanee Gas Plant under construction.

In summary:

Windlectric cannot comply with the Commercial Operation Date in its FIT Contract.

At a time of skyrocketing hydro rates and financial challenges the IESO could save $500 million over the next 20 years by cancelling the Windlectric Contract without penalty.

Existing nearby generating capacity is almost never used and will increase when the Napanee Gas Plant comes online. Intermittent and expensive power from wind turbines on Amherst Island is not necessary

Finally, please provide the IESO’s understanding of the Commercial Operation Date for Windlectric, any extensions awarded by the IESO, and the number of days granted due to Force Majeure and judicial matters.

Thank you for your consideration.

Sincerely,

Michèle Le Lay

President

Association to Protect Amherst Island

CC Premier Kathleen Wynne

Honourable Glenn Thibeault, Minister

 

Replacing coal in Ontario: what the government really did

There is so much mythology now around Ontario’s coal plants for power generation, it really is time to set the record straight on what really happened, how much it cost, and what was actually achieved. This is the first in a two-part series by Parker Gallant.

Intermittent, undependable wind power installed to replace coal-fired power generation. Seen here: a new turbine in the Algoma Highlands. Photo: Gord Benner
Intermittent, undependable wind power installed to replace coal-fired power generation. Seen here: road construction for a new turbine in the Algoma Highlands. Photo: Gord Benner

Back in 2011, Ontario had coal plant capacity of 4,484 MW but the plants really operated only occasionally, producing 4.1 terawatts (TWh) of power — just 10.5% of their capacity. The 4.1 TWh they generated in 2011 represented 2.7% of total power generation in Ontario of 149.8 TWh.  The cost  per TWh was $33 million or 3.3 cents/kWh, making the ratepayers’ bill for those 4.1 TWh $135 million.

As most Ontarians know, those coal plants were either closed (Lambton and Nanticoke) or converted to biomass (Atikokan and Thunder Bay). We were continually told closing or converting those coal plants would save Ontario’s health care system $4.4 billion, based on a study completed while Dwight Duncan was Ontario’s Energy Minister.  Duncan’s claim was a fictitious interpretation of the actual study, but it was repeated so often by Liberal ministers and MPPs that they all believed it and presumably felt the public believed it, too.  

Good PR but … the truth?

Whether one believes the Duncan claim, the fact is the coal plants were closed or converted and the ruling Ontario Liberal government made a big deal of it even to the point of obtaining an endorsement from Al Gore as the first jurisdiction in North America to end coal fired power generation.

The government never disclosed how much it cost the ratepayers/taxpayers of the province to close or convert those coal plants, and we certainly haven’t seen any improvement in our healthcare system since it happened, as one would expect from saving billions. So, was the claim of savings a falsehood? And what did closing the plants really cost?

Let’s start with looking at our electricity consumption level in 2011 and compare it to 2015. In 2011 Ontario generated 149.8 TWh and consumed 141.5 TWh.  In 2015 we generated 159.6 TWh, including 5.9 TWh of embedded generation, and we reportedly consumed 137 TWh, not including the 5.9 TWh of embedded generation consumed within the confines of your local distribution company (LDC).

The difference of 8.3 TWh in 2011 and 16.7 TWh in 2015 was exported.

Replacing coal-fired generation 

As noted, coal capacity was 4,484 MW in 2011 and in 2015 was zero — so what did we replace it with?   According to the Independent Electricity System Operator (IESO) Ontario Energy Report for Q4 2015, since the end of 2011 we have added:

  1. Nuclear supply increased by 1,532 MW (Bruce Power)
  2. 754 MW of hydro
  3. Natural gas generation increased 602 MW
  4. 2,580 more MW capacity of industrial wind turbines (IWT)
  5. Solar up by 2,078 MW
  6. Bio-mass increased by 481 MW (principally conversions of Atikokan and Thunder Bay from coal)
  7. “Other” increased by 10 MW

As well, residential ratepayers conserved 1.184 GWh1. , equivalent to 450 MW of wind turbines operating at 30% of capacity (generating electricity intermittently and out-of-phase with demand).

So altogether, Ontario added 8,037 MW of capacity to cover the loss of 4,484 MW of coal which, in 2011, operated at only 10.5% of capacity.

Ratepayers also reduced consumption by 6,553 GWh with residential ratepayers representing 1,184 GWh of that reduction.

It would appear the variations of long-term energy planning emanating from the Ontario energy portfolio continually overestimated future demand by a wide margin. Their numerous ministerial directives to the Ontario Power Authority (merged with IESO January 1, 2015) with instructions to contract more and more unreliable intermittent wind and solar generation with “first-to- the-grid” rights at high prices produced surplus energy.

This stream of directives and the acquisition of excess capacity resulted in increasing electricity costs for ratepayers due to surplus generation and payment guarantees for displaced generation.

They also added other expensive policies such as conservation initiatives that simply piled on unneeded costs.

Parker Gallant

August 28, 2016

  1. Interestingly, the OEB in a revision to the “average” residential ratepayers monthly consumption reduced it from 800 kWh to 750 kWh, yet suggests conservation achieved (2011 to 2014) was 1,184 gigawatts (GWh).   The total number of residential ratepayers suggests that consumption has declined by 2,739 GWh (4,564,835 residential ratepayers at December 31, 2015 X 50kWh [montly] X 12 = 2,739 GWh) since 2009.

NEXT: The second in this series will examine the additional costs associated with the various policies applied and how generation additions to Ontario’s energy mix continue to drive up Ontario’s electricity costs

 

[Reposted from Parker Gallant Energy Perspectives]

More Ontario municipalities demand municipal support be mandatory in wind power contract bids

NoMeansNo_FB (2)

As of August 19, 2016, 86 Ontario municipalities have passed a motion or resolution at Council, demanding the Wynne government and the Independent Electricity System Operator (IESO) make municipal support a mandatory requirement for new wind power contract bids going forward.

Despite a surplus of electricity and the fact that Ontario ratepayers take losses weekly on sell-offs of extra power, while paying generators to “constrain” or, in the case of hydro and nuclear, to spill or steam off, the Ontario government still plans to proceed with a request for proposals for 600 megawatts of new contracts in 2017. The new contracts will cost Ontario electricity customer billions, at a time when bills have risen dramatically, and more than 8 percent of electricity customers have allowed their accounts to fall into arrears, according to a report recently released by the Ontario Energy Board.

Wind power aiming at the wrong thing

Ontario’s “green” energy program, now widely regarded as a failure, was brought in to benefit the environment, specifically air quality. Ontario’s new Environmental Commissioner Dianne Saxe has commented that the government has made a mistake—the true source of emissions is in the transportation sector.

Municipalities say that wind power projects have been a very invasive and high impact form of infrastructure on their communities: aside from the increasing electricity bills (which have social costs in terms of energy poverty, resulting in more visits to food banks and greater strain on social services), reports of noise, inaudible sound and health effects, and environmental impacts such as the deaths of birds and bats.

As a result, several passed resolutions to the effect that they want municipal support to be a necessity in successful wind power bids. As a City of Ottawa councilor put it, before Ontario’s second largest city passed its own resolution, the siting of power plants should be in line with municipalities’ own development plans. Moreover, truly successful sustainable development must have “buy-in” from the community — there are many serious concerns about wind power projects that warrant municipal control over siting … or whether a project goes ahead at all.

“This has been growing over the last several years,” says Wind Concerns Ontario president Jane Wilson. “Three years ago, the Association of Municipalities [AMO] met in Ottawa and we attended a special meeting on wind power. Sixty-three municipalities were represented that day, and I recall one mayor saying, ‘We’ve been beaten up pretty badly’ by government and the wind power corporations. Now, the municipalities want the land use planning powers removed by the Green Energy Act returned—it’s the fair and transparent thing for this government to do.”

A symposium was held prior to the recent AMO 2016 conference in Windsor, attended by municipal representatives, the IESO, and the Energy ministry. The IESO told the municipal officials that they were open to change but that they were “bound” by ministerial directive.

Asking Wynne to restore democracy to rural Ontario

“Democracy should be restored,” comments North Frontenac Mayor Ron Higgins, whose municipality faced proposals by two huge wind power developers in the last contract round and where a plebiscite revealed more than 80 percent of voters did not support the power projects. Environmental impact and property values were key concerns for the community. “I am hopeful the new Minister of Energy will meet with municipalities to discuss this,” he says.

While the 86 communities represents about 20 percent of all municipalities in Ontario, in fact it is the majority of municipalities that are vulnerable to wind power projects. The 86 span the province from east to west and include several in Ontario’s North. Several of the municipalities already have wind power projects operating—they have seen the complications first-hand, and have had enough.

See the list of communities here:

  1. Adelaide-Metcalfe, Middlesex County
  2. Alfred & Plantagenet, Prescott-Russell County
  3. Amaranth, Dufferin County
  4. Asphodel-Norwood. Peterborough County
  5. Algonquin Highlands, Haliburton County
  6. Armour, District of Parry Sound
  7. Arran-Elderslie, Bruce County
  8. Ashfield-Colborne-Wawanosh, Huron County
  9. Bayham, Elgin County
  10. Bluewater, Huron
  11. Brockton, Bruce
  12. Brooke-Alvinston, Lambton
  13. Bruce Mines, Algoma District
  14. Cavan-Monaghan, Peterborough
  15. Central Elgin, Elgin
  16. Central Huron, Huron
  17. Chamberlain, Timiskaming District
  18. Chatsworth, Grey County
  19. Clarington, Region of Durham
  20. Dutton-Dunwich, Elgin
  21. East Ferris, Nippissing District
  22. Elgin, County of
  23. Elizabeth-Kitley, Leeds and Grenville County
  24. Essex, Essex County
  25. Enniskillen, Lambton County
  26. Gananoque, Leeds and Grenville
  27. Georgian Bluffs, Grey
  28. Greater Madawaska, Renfrew County
  29. Greater Napanee, Lennox and Addington County
  30. Grey Highlands, Grey
  31. Hastings, County of
  32. Hastings Highlands, Hastings County
  33. Havelock-Belmont-Methuen, Peterborough
  34. Hawkesbury, Prescott-Russell
  35. Hornepayne, Algoma
  36. Howick, Huron
  37. Huron, County of
  38. Huron-Kinloss, Bruce
  39. Kawartha Lakes, City of
  40. Killarney, Sudbury District
  41. Kincardine, Bruce
  42. Lakeshore, Essex
  43. Lambton, County of
  44. LaSalle, Essex
  45. Laurentian Hills, Renfrew County
  46. Leeds and the Thousand Islands, Leeds and Grenville
  47. Lennox & Addington, County of
  48. Madawaska Valley, Renfrew
  49. Mapleton, Wellington
  50. Magnetawan, Parry Sound
  51. Marathon, Thunder Bay District
  52. McDougall, Parry Sound
  53. McNabb Braeside, Renfrew
  54. Meaford
  55. Merrickville-Wolford, Leeds and Grenville
  56. Newbury, Middlesex
  57. Mono, Dufferin County
  58. Morris-Turnberry, Huron
  59. Nairn and Hyman, Sudbury District
  60. North Frontenac, Frontenac County
  61. North Glengarry; Stormont, Dundas and Glengarry
  62. North Grenville, Leeds and Grenville
  63. North Perth, Perth
  64. North Stormont; Stormont, Dundas & Glengarry
  65. Northern Bruce Peninsula, Bruce
  66. Ottawa, City of
  67. Perth, County of
  68. Peterborough, County of
  69. Plympton-Wyoming, Lambton
  70. Prescott-Russell, United Counties of
  71. Prince Edward, County of
  72. Rainy River, Rainy River District
  73. Ramara, Simcoe County
  74. South Bruce Peninsula, Bruce
  75. Southgate, Grey
  76. Southwald, Elgin
  77. Tillsonburg, Oxford County
  78. Trent Lakes, Peterborough
  79. Tudor and Cashel, Hastings
  80. Tweed, Hastings
  81. Val Rita-Harty, Cochrane District
  82. Warwick, Lambton
  83. Wainfleet, Niagara Region
  84. West Grey, Grey
  85. West Lincoln, Niagara
  86. Zorra, Oxford

Ontario’s electricity policy disaster: power cost down, consumer rates up says economist

Massive revenue guarantees for a handful of lucky wind power generators, but no appreciable environmental benefit from Ontario’s energy policies says economics professor Ross McKitrick

More turbines means more losses and higher bills, with no environmental benefits [Photo: Gord Benner]
More turbines means more losses and higher bills, with no environmental benefits [Photo Algoma construction site by Gord Benner]
Financial Post, August 10, 2016

You may be surprised to learn that electricity is now cheaper to generate in Ontario than it has been for decades. The wholesale price, called the Hourly Ontario Electricity Price or HOEP, used to bounce around between five and eight cents per kilowatt hour (kWh), but over the last decade, thanks in large part to the shale gas revolution, it has trended down to below three cents, and on a typical day is now as low as two cents per kWh. Good news, right?

It would be, except that this is Ontario. A hidden tax on Ontario’s electricity has pushed the actual purchase price in the opposite direction, to the highest it’s ever been. The tax, called the Global Adjustment (GA), is levied on electricity purchases to cover a massive provincial slush fund for green energy, conservation programs, nuclear plant repairs and other central planning boondoggles. As these spending commitments soar, so does the GA.

In the latter part of the last decade when the HOEP was around five cents per kWh and the government had not yet begun tinkering, the GA was negligible, so it hardly affected the price. In 2009, when the Green Energy Act kicked in with massive revenue guarantees for wind and solar generators, the GA jumped to about 3.5 cents per kWh, and has been trending up since — now it is regularly above 9.5 cents. In April it even topped 11 cents, triple the average HOEP.

So while the marginal production cost for generation is the lowest in decades, electricity bills have never been higher. And the way the system is structured, costs will keep rising.

More wind turbines, bigger losses, higher bills

The province signed long-term contracts with a handful of lucky firms, guaranteeing them 13.5 cents per kWh for electricity produced from wind, and even more from solar. Obviously, if the wholesale price is around 2.5 cents, and the wind turbines are guaranteed 13.5 cents, someone has to kick in 11 cents to make up the difference. That’s where the GA comes in. The more the wind blows, and the more turbines get built, the bigger the losses and the higher the GA.

Just to make the story more exquisitely painful, if the HOEP goes down further, for instance through technological innovation, power rates won’t go down. A drop in the HOEP widens the gap between the market price and the wind farm’s guaranteed price, which means the GA has to go up to cover the losses.

Ontario’s policy disaster goes many layers further. If people conserve power and demand drops, the GA per kWh goes up, so if everyone tries to save money by cutting usage, the price will just increase, defeating the effort. Nor do Ontarians benefit through exports. Because the renewables sector is guaranteed the sale, Ontario often ends up exporting surplus power at a loss.

The story only gets worse if you try to find any benefits from all this spending. Ontario doesn’t get more electricity than before, it gets less.

Despite the hype, all this tinkering produced no special environmental benefits. The province said it needed to close its coal-fired power plants to reduce air pollution. But prior to 2005, these plants were responsible for less than two per cent of annual fine particulate emissions in Ontario, about the same as meat packing plants, and far less than construction or agriculture. Moreover, engineering studies showed that improvements in air quality equivalent to shutting the plants down could be obtained by simply completing the pollution control retrofit then underway, and at a fraction of the cost. Greenhouse gas emissions could have been netted to zero by purchasing carbon credits on the open market, again at a fraction of the cost. The environmental benefits exist only in provincial propaganda.

An ordeal for people forced to live with wind power projects

And on the subject of environmental protection, mention must be made of the ruin of so many scenic vistas in the province, especially long stretches of the Great Lakes shores, the once-pristine recreational areas of the central highlands, and the formerly pastoral landscapes of the southwestern farmlands; and we have not even mentioned yet the well-documented ordeal for people living with the noise and disturbance of wind turbines in their backyards. We will look in vain for benefits in Ontario even remotely commensurate to the damage that has been done. …

Read the full story here.

High hydro rates now a ‘crisis’ for Ontario says social aid agency

If 30 children were sick with measles, it would be a public health crisis, says United Way executive director Francesca Dobbyn. So why isn’t it a crisis when more than 60,000 Ontario families have been cut off from electricity service? And in rural Ontario, no power means, no water. Meanwhile, the Wynne government announces it is spending millions on a network of electric car charging stations between southern Ontario cities.

Rural Ontario ‘in crisis’ due to high hydro rates, local United Way head says

By Denis Langlois, Sun Times, Owen Sound

Soaring hydro costs have created a crisis situation in Ontario that is especially concerning in rural areas like Grey-Bruce, says the head of one of the local agencies that is helping people to keep their lights on.

Francesca Dobbyn, executive director of the United Way of Bruce Grey, which has released a report on utility assistance provided to households in the region over the past year, pointed to national news reports that quote the Ontario Energy Board as saying nearly 60,000 residential customers were disconnected in 2015 from hydro services due to non-payment. That number was confirmed by The Sun Times Friday.

“If we had 30 kids in Ontario with the measles, we’d have a health crisis. With 60,000 households in Ontario who were disconnected from hydro, that’s a crisis. And in rural Ontario, when that disconnection means you can’t use your well, that’s a public health crisis,” she said in an interview.

The local United Way’s report found that from July 1, 2015, to June 30, 2016, the United Way, along with Bruce and Grey counties, Y Housing and the Salvation Army in Wiarton distributed nearly $750,000 to help people with hydro or natural gas arrears or to purchase wood, oil or propane to heat their homes.

That figure rises to more than $1 million, the report says, when factoring in the staff time and resources provided by the agencies.

Dobbyn said while that number alone is startling and points to a “crisis brewing in our region,” it doesn’t include the financial assistance provided to people by other sources, such as churches or other organizations or by family members or friends.

The report says electricity costs have climbed by 100 per cent in the past decade.

Rural residents have been hardest hit, Dobbyn said, because they are charged higher delivery costs by utility companies.

Rural residents, on average, pay almost double the delivery rates compared to households in “urban high density” areas, according to the United Way report.

An average household in a low-density area is charged about $84.46 for delivery, distribution, connection, network and other fees, the report says, while homes in high-density areas pay about $44.50. And that’s without using any energy at all, it says.

Homes that use baseboards for heat pay about $80 a month in hydro rates on top of the delivery fees.

“And that’s before turning on a light or using a microwave or any other source of electricity,” Dobbyn said.

The numbers, she said, show that even while conserving energy in the home, people in rural areas are still facing high monthly hydro bills.

“Our clients, our families are not wasteful. They do everything they can to reduce consumption, they unplug everything and we often advise them to turn breakers off in an effort to reduce their bill,” she said.

Dobbyn said for some families in Grey-Bruce who live in geared-to-income housing with baseboard heaters, the cost of hydro is more than the price of rent.

The new Ontario Energy Savings Program, which gives qualifying consumers $30 to $50 per month relief, is not enough to prevent disconnections, she said. And those disconnections can have far-reaching consequences, she added.

Facing or experiencing a disconnection can affect a person’s mental health, she said, and cause incredible stress, which can make them sick. That puts a further strain on Ontario’s health care system and can lead to lost time at work.

Dobbyn said she has heard from many people who have become obsessed with keeping their energy use low. They frequently check their hydro usage online and unplug devices like coffeemakers, microwaves, televisions and computers right after using them. Dobbyn said she would like to see more measures put in place to help reduce hydro costs for rural residents. She would like to see, for example, delivery fees spread evenly among all hydro users in Ontario, as is done in Quebec, so rural residents aren’t shouldering such high costs.

“What we have now is a user-pay system and that’s not fair,” she said.

Conservation programs “that actually have an impact,” can also help, she said, such as those that cover the cost of window replacements and insulation to make homes more energy efficient. However, Dobbyn cautioned that hydro conservation has been known to lead to increases in the costs of electricity.

For example, the Ontario Energy Board said one of the main reasons for the increase to hydro rates last May was because Ontarians consumed less electricity over the recent milder winter, so Regulated Price Plan prices did not recover the full cost of serving RPP customers. …

Read the full story here.

Renewable energy economic promises fall short: university study

A University of Wyoming professor has conducted an economic study of the real results of “green” energy policies in 12 states, including Wisconsin, and come up with the conclusion that any gains fall far short of promises … and that there are real economic costs related to higher electricity bills for consumers and business.

Former Ontario Energy  Minister Chiarelli promised Ontario a bright green future. Turns out, it's all downhill.(Photo Chris Abbott/PostMedia)
Former Ontario Energy Minister Chiarelli promised Ontario a bright green future. Turns out, it’s all downhill. (Photo Chris Abbott/PostMedia)

Study: Renewable Energy Mandates Come Up Short On Economic Promises

July 7, 2016By Chris Rochester
MacIver Institute Director of Communications
With data provided by Dr. Timothy Considine
The University of Wyoming

Executive Summary
Do renewable energy mandates foster new industry and create waves of high-tech jobs, as many advocates claim? New research debunks this claim, indicating that the mandate’s costs far outweigh its benefits.

The new research, “Evaluating the Costs and Benefits of Renewable Energy Portfolio Standards,” was conducted by University of Wyoming professor Dr. Timothy Considine, who evaluated 12 separate states with a Renewable Portfolio Standard (RPS), including Wisconsin.

The research describes the direct cost of the RPS to the Wisconsin electricity industry and therefore to electricity consumers. Wisconsin’s RPS forces consumers to pay higher electricity costs – $474 million in 2016 alone. By 2025, the increased cost paid by Wisconsinites attributable to the RPS is projected to increase to almost $500 million.

Increased electricity rates caused by renewable energy mandates also result in approximately $1 billion in lost economic activity in Wisconsin each year. Job losses attributable to the RPS are 7,000 to 10,000 jobs below employment levels without RPS mandates, even after factoring in the meager number of new “green” jobs.

Contrary to claims made by environmental advocates that RPS mandates lead to large numbers of new “green” jobs and new economic growth, the real costs in economic activity and lost jobs attributable to RPS mandates far outstrip any negligible gains in the renewable energy industry.

Key Takeaways:

    • Renewable energy mandates cost Wisconsin taxpayers and ratepayers nearly half a billion dollars per year.
    • Renewable energy mandates cost Wisconsin around 10,000 jobs per year, far more than the “clean energy” jobs created.
    • Losses in economic activity hover around $1 billion per year as a result of renewable energy mandates.

 

See the report and link to the study here.

State of crisis in Bruce Gray over electricity bills, says United Way

The addition of renewables such as wind power has added to Ontario citizens’ electricity bills substantially. This news release tells the story of what the Ontario government’s policy means for rural communities

2015-16 Utility Report for Bruce and Grey Counties

For Immediate release; 2015-2016 Utility Report – Rural Ontario in Crisis

UWBG Utility Assistance Report 2015-16

The United Way of Bruce Grey wanted to get a larger picture of energy poverty in our region and acknowledge the other organizations who also take on the task of keeping people warm and their lights on.

The United Way was able to access additional data from both Counties, Y Housing as well as the Salvation Army in Wiarton.

The numbers are startling and a crisis is brewing in our region

Almost $700 000 in direct dollars were spent to pay down utility bills. If staff time and resources were factored in, over $1 million has been spent in the last 12 months on utility arrears.

Utility Assistance by organization

Electricity continues to be a challenge as we note that costs have increased 100% in the past 10 years. Rural residents are hit with massive delivery costs and conservation efforts are negated by annual increases due to reduction in demand. “Our clients, our families are not wasteful, they do everything they can to reduce consumption, they unplug everything and we often advise them to turn breakers off in an effort to reduce their bill.” said Francesca Dobbyn Executive Director of the United Way of Bruce Grey.

Utility type

The introduction of the Ontario Energy Savings Program in November could give qualifying consumers $30 to $50 per month relief, and while appreciated, for many families it’s simply not enough to prevent disconnections.

We are still seeing large bills from 2013 when billing and meter issues created large “catch-up” bills. A new partnership with Credit Canada can assist families with longer repayment schedules.

When a disconnection does happen, the Bruce Grey team swings into action to gather as many supports as possible to reconnect the family.  From finding additional dollars, advocacy and negotiation the whole team works together.

For more information on this report please contact the United Way or the appropriate agency and staff listed below:

United Way of Bruce Grey – Francesca Dobbyn – 519 376 1560

Grey County Housing – Anne Marie Shaw – 519 376 5744

Bruce County Social Services – Christine MacDonald – 519 881 0431

Y Housing – Joan Chamney – 519 371 9224

Salvation Army Wiarton – Mary Miller – 519 534 0353