Florida drops electricity rates again, Ontario’s continue to rise

Florida: plenty of natural gas-fired power. No wind
Florida: plenty of natural gas-fired power. No wind

A Canadian snowbird tells me that Florida Power & Light Company (FPL) announced they once again reduced their rates and now brag their electricity rates are lower than 10 years ago.  This is quite a feat when measured against other basic needs in Florida, such as the cost of food — up 26%; housing —  up 20%; and healthcare, up 40%.   According to the US Energy Information Administration  (EIA) the all-in Florida rate (including delivery costs) was 11.49 cents/kWh as of December 31, 2015.

Contrast that news with Ontario and a look back at the prescribed Ontario Energy Board (OEB) November 1, 2005 rate (electricity only); it was 5.32 cents/kWh.  The OEB site notes at November 1, 2015 it had climbed to an average of 10.7 cents/kWh. The change from 2005 represents an increase of 101% . And that doesn’t include delivery, regulatory and HST, which have had the effect of doubling our rates.

FPL has more residential customers (4.8 million) than Ontario (4.5 million) and those FPL customers consume more electricity per capita than all other states (1,000 kWh per month) except Texas, yet the average annual bill is only $1,900.   It should be noted FPL’s parent company is Nextera Energy Inc. which has a subsidiary in Ontario (Nextera Energy Canada) with more than 600 megawatts (MW) of industrial wind turbines (IWT) capacity, and a contract guaranteeing them in the neighbourhood of $135.00 per MW hour for their generation.  If one calculates the potential revenue of those 613.8 MW at a generation level of 30% of capacity, it can be expected to represent annual revenue of almost $220 million and, over the 20-year span of the contract, would generate about $4.4 billion.

Presently Nextera’s Florida subsidiary FPL has zero MW of wind power in Florida and a limited amount of solar-based power, but claim “its highly fuel-efficient power plant fleet is one of the cleanest among all utilities nationwide.” Also :  “FPL’s fossil fuel fleet set a new record for its fuel efficiency in 2013, bringing its system-wide heat rate down to 7,657 British thermal units (BTU) per kilowatt hour”.

Clearly, the reason Ontario’s electricity rates for residential households climbed 101% while FPL’s has declined, is linked to our politicians who are determined to add 10,700 MW of renewable energy in the form of wind, solar and biomass at contracted rates, well in excess of competing jurisdictions.  Add to that the need to back up wind and solar with gas plants and it is easy to see why the lack of a cost/benefit analysis has driven so many Ontarians into energy poverty.

If the next several years of Liberal rule, provincially and federally, bring Ontario more costly intermittent and unreliable generation sources; consumers will be further driven to make the choice between “heat or eat” and our industrial base will continue to lose good jobs.

Let’s pull the plug on costly energy sources until Florida and the rest of the world catches up!

© Parker Gallant

March 15, 2016


The views expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.

Ontario’s hidden taxes: Parker Gallant

This past weekend, Wind Concerns Ontario held its Annual General Meeting and a strategy session for members in Wellington, Ontario.

Among the presentations was this from Parker Gallant, on the Wynne government’s hidden taxes.

Premier Wynne: I have to get the money from someone! That means YOU
Premier Wynne: I have to get the money from someone! That means YOU

Ratepayers and Hidden Taxes

 The “Water” Tax:                                                                                        Annual Costs

Fuel charges for Hydroelectric Generating Stations:                                       $345 million for 2015

From OPG’s Annual Report:

“Hydroelectric generating stations in Ontario are subject to taxes and charges as prescribed by Ontario Regulation 124/02 under the Electricity Act, 1998 (Ontario Electricity Act). All OPG hydroelectric generating stations are subject to GRC Property Tax, which is determined by applying graduated tax rates, ranging from 2.5 percent to 26.5 percent through four levels of production, to the station gross revenue. GRC Property Tax payments are made to either the OEFC or to the Ontario Ministry of Finance.”


The “Social Assistance” Tax                                                                         $175/225 million estimated

The Ontario Electricity Support Program or OESP to support low income households commenced January 1, 2016 should rightly be a budget item of the Ontario Ministry of Community and Social Services but the Ontario Liberal Party made it a part of the Energy Ministry. The OEB estimated support for the 570,000 households (2014) living in “energy poverty” in the province would require a budget of $200 million. It is not clear if the OESP will replace the LEAP program of about $10 million annually.


The “Net Zero” Tax                                                                                      $2/300 million estimated 

Settlement with both the Power Workers Union and the Society of Energy Professionals was claimed to be a “Net Zero” wage settlement but disclosure in both the Hydro One and the OPG Annual Reports indicate that both will receive lump sum payments for the first two years of the respective contracts and starting in the third year those employees will receive annual awards of Hydro One shares equal to 2.7% of their wages. Those annual awards of Hydro One shares will extract the value from their sale that would have gone to the province for “infrastructure” spending. It is worth noting that the share sale committed Hydro One to dividend out 75% of Hydro One’s annual earnings.

The “Realty Tax” subsidy                                                                            $200 million (?) estimated 

Dwight Duncan when Minister of Finance decreed industrial wind turbines should be taxed at only $40,000 per megawatt of capacity or approximately 1.5% of their capital cost and only about 1/10th of their annual revenue base meaning all other industrial/commercial/residential taxpayers are forced to pay extra for the services they might cost the various townships including road repairs and possibly decommissioning.


The Electric Vehicle subsidy                                                             $4/5 million estimated

While the EV subsidy is not absorbed by ratepayers it is a taxpayer cost. It is ironic that if you can afford to purchase a high end Tesla automobile at a cost of $100,000 plus you are able to obtain a grant of up to $10,000 from the Province. Why are people earning minimum wage supplementing people who can afford these vehicles?

Read the full presentation here: AGM2016ParkerGallant





The opinions expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.

Spilled hydro adds millions to Ontarians’ electricity bills

Wind power gets first rights to the grid, so clean renewable hydro is wasted [Photo: OPG]
Wind power gets first rights to the grid, so clean renewable hydro is wasted [Photo: OPG]
OPG spills hydro and $150 million goes “down the drain” 

OPG released their 2015 annual report  Friday March 4, 2016; it confirms that 3.2 terawatts (TWh) of water that could have been used for power was spilled last year. (This is similar to the spilled amount in 2014 year.)

How much is 3.2 TWh? Enough to supply about 350,000 average Ontario households with electricity for a full year … but it didn’t!

Here is what OPG’s annual report had to say:

“Baseload generation supply surplus to Ontario demand continued to be prevalent in 2015. The surplus to the Ontario market is managed by the IESO, mainly through generation reductions at hydroelectric and nuclear stations and grid connected renewable resources. Reducing hydroelectric production, which often results in spilling of water, is the first measure that the IESO uses to manage surplus baseload generation (SBG) conditions. During each of 2015 and 2014, OPG lost 3.2 TWh of hydroelectric generation due to SBG conditions.” 

The principal reason we have surplus baseload is due to wind and solar being granted “first to the grid” rights. And, because wind and solar are intermittent (and unreliable) OPG is forced to spill clean renewable hydro power.

While spilling hydro in itself is disturbing in Ontario, especially considering our hydro-electric history, the fact we are now obliged to pay for the spilled hydro at the same time we are paying wind developers 13.5 cents a kilowatt hour (kWh) and solar generators as much as 80 cents a kWh simply adds more costs to our monthly hydro bills.

OPG received $47 million per TWh (4.7 cents/kWh) for the spilled hydro. That means electricity ratepayers’ pockets were picked for over $150 million, or about $31.00 per ratepayer.   Our reward for absorbing that cost was zero.

This month, Energy Minister Bob Chiarelli will likely announce that Ontario will add even more intermittent, unreliable wind and solar generation. Your pockets are not safe yet.

© Parker Gallant

March 7, 2016

The views expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.

Wind power generation whacks ratepayers: surplus power sold at fire sale prices

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IESO just released their January 2016 Monthly Market Report with details on electricity generated and demanded, along with prices and impact on ratepayers.   It is interesting to compare January 2016 with January 2015 to get an idea of how the push for renewable energy is hurting Ontario’s ratepayers.   The comparison of the facts (and some estimates) year to year is disturbing and solidifies the notion that rate increases will not slow down or stop, no matter what Bob Chiarelli, Minister of Energy claims.

Ontario’s demand fell 5.6% or 735,000 megawatt hours (MWh) but exports of surplus generation increased by 10.2% or 247.000 MWh even though IESO reported generation decreased by 4.5% (net of exports/imports) or 668,000 MWh. The reduced demand and increased exports wound up costing ratepayers a lot more in the current year than 2015 for a variety of reasons as we will show.

The IESO Market Report for January 2015 valued the cost of electricity production at $80.23 per MWh (GA of $50.68 + HOEP of $29.55) versus a cost in January 2016 of $105.48/MWh (GA of $91.79 + HOEP of $13.69). The cost increased $25.25/MWh or 31.5%, without factoring in the 10% reduction we received in 2015 from the Ontario Clean Energy Benefit (OCEB) or the nominal savings from the removal of the DRC, both of which became effective January 1, 2016.

A lot of the big jump in costs can be attributed to: Ontario’s net exports (exports less imports) which increased 67,000 MWh; the drop in the market value (HOEP) down by $15.86/MWh or 53.7%; a huge increase in curtailed production1. from wind (up from 41,000 MWh to 141,000 MWh) and nuclear (up from 26,000 MWh to 68,400 MWh).   Additionally wind power generation increased 247,000 MWh and,  including curtailed wind, was up 348,000 MWh or 35% from 2015.

As surplus exports are sold at the HOEP price the revenue generated from their sale in January 2016 was well down as Ontario’s ratepayers picked up the jump of $41.11/MWh in Global Adjustment or GA costs.

In total, the January 2015 net exports, together with the cost of curtailed wind and nuclear cost Ontario ratepayers approximately $97 million. The January 2016 cost of surplus exports and wind and nuclear curtailment was $191 million — that’s a jump of $94 million or 97% year over year. Net exports amounted to 1,851,800 MWh and wind generation and curtailed wind generation amounted to 1,339,000 MWh, which equates to 72.3% of net exports. What this means: power generation from wind is surplus.

Ontario’s long suffering 4.9 million rate-paying households in only the first month of the current year have each been forced to subsidize our fire sale of surplus energy to the tune of $39.00.   If the pattern continues (February may be worse) Ontario’s ratepayers will pick up wasted costs of $470.002. each annually.

Minister Chiarelli should immediately cancel his directive to IESO for the acquisition of more intermittent and unreliable wind and/or solar generation.

©Parker Gallant,

March 2, 2016


  1. Hat tip to Scott Luft for his provision of the curtailment estimates.
  2. This doesn’t include the impact of the OESP (Ontario Electricity Support Program) or spilled hydro.

Hydro One’s failure to communicate rewarded with rate increase

Hydro One fails to fulfill Ministerial directive ... but gets a rate increase anyway
Hydro One fails to fulfill Ministerial directive … but gets a rate increase anyway

OEB approves Hydro One’s failure to communicate

Dwight Duncan, former Ontario Minister of Energy, issued a directive to the OEB on July 14, 2004 in respect to smart meters.  It started with:  “The Government of Ontario has established targets for the installation of 800,000 smart electricity meters by December 31, 2007 and installation of smart meters for all Ontario customers by December 31, 2010.”

That was a tall order with some specifics including this: “A smart meter must be capable of being read remotely and the metering system must be capable of providing customer feedback on energy consumption with data updated no less than daily.” 

Fast forward almost 11 years to 2016: about 50,000 (4.2%) of Hydro One’s customers are receiving form letters telling them instead of being billed on a time-of-use/TOU basis, they will be billed on a RPP (Regulated Price Plan) basis. Additionally most will receive estimated bills most months! The RPP plan prices the first 1,000 kWh at  9.9 cents/kWh for six months in the winter,  reducing to 600 kWh in the six-month summer season.  Consumption over those levels are currently billed at 11.6 cents/kWh.

Why the Hydro One letter? “Poor Communication Reliability” as noted in their submission to the Ontario Energy Board (OEB) on January 30, 2015 when Hydro One responded to “Interrogatory 3” from the OEB. The submission was related to Hydro One’s request to move a number of their customers off of TOU pricing due to their inability to communicate with the smart meters. OEB’s Interrogatory 3 asked Hydro One to advise what were: “a. the advantages and/or disadvantages of switching TOU customers to two-tier pricing including associated demand management opportunities; and “b. the options to achieve compliance and resulting costs and impact on rates.”

The response from Hydro One detailed the “communication” problem and the following on costs:  “Based on a very preliminary assessment, the cost to achieve full compliance (i.e., to have all affected customers on TOU billing) was estimated to be well over $500 million. Hydro One did not estimate the impact on rates, as the detailed breakdown of costs is not available.”

The Ontario Auditor General’s (AG) report released December 9, 2014 stated: “Our work at Hydro One also noted complaints from ratepayers about estimated bills or no bills for extended periods due to Hydro One’s billing-system problems and connectiv­ity issues between smart meters and associated communication systems” and “Hydro One accounted for more than $660 million of the $1.4 billion spent by all 73 distribution companies. About $500 million (mainly from Hydro One) of the $1.4 billion is under review by the OEB and has yet to be approved by the OEB.”

It sure appears the $500 million in the AG report is the same $500 million that Hydro estimated it would cost to get those 50,000 smart meters to communicate at a cost of $10,000 per meter. …

Read the full article here: OEB approves Hydro One’s failure to communicate-March1

(Note: the opinions expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.)

Ontario’s broken promises on funding for health care and jobs

Ontario’s nurses are campaigning for more health care dollars. If only they hadn’t believed the government’s promises …

The Truth Hurts

Back in January 2012, the Ontario Nurses Association (ONA) issued its Research Paper # 3. The paper was directed at the provincial government and called for increased health care spending including adding 9,000 registered nurses to the sector.

One of the recommendations in the paper was: “To fulfill the 2009 G20 Pittsburg commitment to put quality jobs at the heart of economic recovery – part of the coordinated G20 stimulus plans to which Canada was a signatory – the Ontario government should work with the federal government to establish job creation targets in various areas. This should include job-intensive green job creation and fully subsidized skills training programs accessible to all unemployed and underemployed workers.”

Disaster for health care

Fast-forward four years: the ONA is running TV ads focusing on nursing layoffs at hospitals and reduced health care funding throughout the province. Layoff notices have been appearing regularly since release of the Research Paper. The ONA’s President, Linda Haslam-Stroud, RN, has been outspoken about the health care cuts as in a February 2016 media release where she says “that 2016 is turning into a ‘disaster’ for patient care and it’s now hitting Toronto hospitals.”

It is ironic that the ONA appeared to support Ontario’s Liberal government in the last election, even giving $100,000 to “Working Families,” the coalition of unions that used union dues to paint the Progressive Conservative Party of Ontario as not worthy of election. Almost $2.5 million was spent to accomplish that task. The ONA, whose members pay high union dues, spent $687,000 in total.

Billions lost in cheap power exports

Had the ONA re-considered their recommendation to “include job-intensive green job creation” in Research Paper # 3 and instead examined the fall-out from the Green Energy and Green Economy Act (GEA), they might have taken a different tack.  As I noted in an earlier article, just the cost of Ontario’s net exports of electricity from 2007 to 2015 removed almost $4.5 billion from ratepayer pockets. That $4.5 billion would have gone a long way to ensure both the retention of registered nurses and the hiring of recently graduated RNs.

Believing the Ontario Liberal government promises of job creation with the GEA, and endorsing it, the ONA may have exacerbated the continuing cuts to health care. Many earlier studies out of the EU noted that, rather than creating private sector jobs, renewable power developments actually caused the demise of private sector jobs in ratios as much as five to one.  Tax dollars need to come from the private sector and those jobs promised by the McGuinty-led government were simply a pipe dream.

The ONA may also have been led astray by George Smitherman when he set up a $40-million irrevocable trust to save nursing jobs referred to as the Nurses Retention Fund, but only a very small portion of the fund has actually gone to retain jobs.  While the $40 million is a long way from the $4.5 billion mentioned above, it would appear to have done little to support Registered Nursing jobs, perhaps because of the way it was setup by the former Minister of Health.

The ONA should ask the government to focus on wasted tax dollars both within the health care portfolio and elsewhere, including the Energy Ministry where billions of dollars are being wasted annually.

(C) Parker Gallant

The opinions expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.

EDITOR’S NOTE: Please see a news release on a report issued today by the CD Howe Institute on poor governance in Ontario’s electricity sector. An excerpt: “If a disproportionately large amount is dedicated to unnecessary electricity projects, then that amount is not available to meet other needs such as transportation, schools and hospitals.”

Ontario’s energy literacy plan focused on the wrong people: Parker Gallant

As Ontario loses millions in one day due to cheap power exports, while hospitals are cutting services and laying off staff, who’s really in need of energy education?

Energy Literacy: great idea, but it’s the government that needs training

Bob Chiarelli doesn't understand how losing millions in one day is a bad thing; maybe HE needs the 'energy literacy' training
Bob Chiarelli doesn’t understand how losing millions in one day is a bad thing; maybe HE needs the ‘energy literacy’ training

The Media Release issued by the Ontario Ministry of Energy February 19, 2016 could not have come at a worse time for them.  The release stated the Ministry was investing $1.35 million in “Energy Literacy to Help Fight Climate Change.”  The money is aimed at educating our children from kindergarten to grade 12 about how to “conserve energy and help fight climate change.”  One assumes the cost of the program will be picked up by Ontario ratepayers.

February 19, 2016 was a day to make that particular announcement as it turned out to be quite the day for power generation by industrial wind turbines (IWT). The wind seemed to be blowing hard in Turbine Ontario but demand was relatively low. That meant the intermittent and unreliable energy generated by the IWTs out of phase with demand was surplus to Ontario’s needs.

As the weekend proceeded things grew even worse for the Energy Ministry as the wind kept blowing on February 20th and demand was very low.  Market watchers such as Scott Luft noted that, and posted a “Worthless Wind” article on his website. Shortly after, I found myself on Steve Aplin’s website where he posted an interesting parable comparing IWT generation in Ontario for January to a very unreliable car.

Electricity generation from IWT on news release day was large, reaching over 48,000 megawatt hours (MWh) and another 26,000 MWh were curtailed (not generated), but resulted in costs for ratepayers. Curtailed generation is paid for and charged to ratepayers.

As it turned out, Ontario was also exporting a lot of surplus generation with almost 70,000 MWh leaving the province via the grid to support our neighbours in New York, Michigan, etc. The lack of demand in Ontario and the surplus generation had the usual effect on the price of that exported power as the HOEP (hourly Ontario export price) had a negative value of 9 cents per MWh. The exported surplus cost $7,000. The actual production cost, however, was over $100/MWh so total cost to Ontario’s ratepayers was $7 million dollars. 

The actual source of the exported power is indeterminable, but we can reasonably suggest the cost of the electricity generated by IWTs and the cost of the curtailed generation from those IWTs.

The best estimate of the average price of a MWh of IWT generated electricity is $123.50/MWh, so the 48,304 MWh that wind generated on February 19, 2016 cost Ontario ratepayers $5,965,544 and curtailed generation of 28,805 MWh, estimated at $120/MWh means electricity NOT generated cost ratepayers $3,096,600. In total, wind cost Ontario’s ratepayers $9,062,144 for power we didn’t need—in just one day. That is without factoring how much hydro may have been spilled, how much nuclear may have been steamed off, and how much its excess production may have driven the HOEP market down, depressing export earnings.

When you realize we also paid gas plants to idle, etc., you would be justified in asking, Who in hell designed this system as they obviously can’t be “energy literate” or know anything about conserving energy or ratepayer dollars!

The $1.35 million earmarked for energy literacy should be used to train the various politicians in the Wynne cabinet starting with the Energy Minister.

©Parker Gallant,

February 22, 2016

The views expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.

EDITOR’S NOTE: What could that $7 million lost do for Ontario’s health care? According to the pre-budget submission prepared by the Ontario Nurses’ Association, many Ontario hospitals and health units are facing serious budget shortfalls and their ability to provide care is compromised. For example, “Quinte Health Care is predicting a $12 million gap between expenses and operating funding for 2015-16.” Ontario lost half the amount Quinte Health would need for one year in ONE DAY on February 19th.

Former Wynne government minister on Ontario’s debt: dangerous

Former Finance and Energy Minister Dwight Duncan offers his opinion on Ontario’s debt and how it got to be so significant. He should know: a lot of it is his fault, including long-term contracts for wind power.

Dwight Duncan, former Finance Minister: Ontario debt "dangerous". He oughta know.
Dwight Duncan, former Finance Minister: Ontario debt “dangerous”. He oughta know.

Dwight Duncan, Ontario’s former Minister of Energy and Minister of Finance has found a new calling as a columnist with QP Briefing, the reputed eyes and ears at Queens Park.  QP Briefing catchwords on their website are “exclusive coverage, trusted analysis.” One might wonder how, after reading the first two columns Duncan wrote for them, truthful that claim might be.

Duncan on debt: Mr. Duncan’s first column was very critical of Ontario’s increasing debt : “A province that is dangerously ill equipped to face the next, and inevitable, economic downturn.”

Isn’t it ironic that a former Minister of Finance, who presided over several budgets that continued to increase Ontario’s debt, should now be criticizing the results of his own work, which collectively increased Ontario’s debt by well over $60 billion? He notes the fastest growing expense line coming out of the budget for 2015/16 is “interest.”   He also now claims the increasing interest expenses are “an enormous wealth transfer.”

Nowhere in the article does he accept any blame for the mess he played in creating it. Near the end of the column he compliments the Wynne government for “speaking out about an optimum net debt to GDP ration” and about linking spending to public transit spending.  He also expresses happiness for the election of the Trudeau government, but has concerns that “federal transfers” may be reduced.  Guess he didn’t see that one coming; if he had, maybe he would have stopped spending?

Duncan on the AG and the energy file: Duncan’s second column is simply a beat-up on the Ontario Auditor General for her damning report on Ontario’s management of the electricity sector.   He claims the report was out of context.  He even goes as far as to refer to Energy Minister Bob Chiarelli as one of the “most solid ministers.”

Duncan goes on to make audacious claims about diesel generators in some cities, OPG being near bankrupt, no new “significant” generation capacity added in 20 years, no renewables, no “significant” transmission investments, no conservation programs, etc. etc. when the Ontario Liberals gained power.   But he fails to remind the reader that, as Minister of Energy, he launched many of the programs that have been roundly criticized by the current Auditor General, Bonnie Lysyk and her predecessor, and that have caused electricity rates to skyrocket in Ontario.

We should be reminded of Energy Minister Duncan’s achievements: he brought us “smart meters”; he brought us long-term contracts for industrial wind turbines and solar panels at high prices (before the launch of the FIT program); he brought us conservation spending ($400 million per year for three years); he created the Ontario Power Authority; he brought us new gas plants (big and small) to back up wind and solar; and how he pushed us to reduce consumption in a time of power surplus. All these actions by Dwight Duncan, Minister of Energy, drove up electricity prices.

We should remember too that Dwight Duncan was and presumably still is a fan of “cap and trade” and he pushed for increased pension funding from the federal government. We haven’t seen the last of his effects on our electricity bills or our cost of living.

One of Duncan’s famous quotes while in office was: “We’re not going to spend $1.6 billion on technology that doesn’t help climate change. That’s just dumb.” That was about installing anti-pollution scrubbers on the province’s coal plants in 2007.  The fact is, the cost of “smart meters” alone exceeded the scrubber costs. The logic behind that kind of thinking presumably led him, as the Minister of Finance, to rack up huge deficits, increasing the province’s debt levels by over $60 billion during his time in that portfolio.

In my humble opinion QP Briefing should not have engaged Mr. Duncan as a columnist as he has, so far, demonstrated a bias. He believes what he left behind was commendable and now seeks to justify it all, despite the burden placed on Ontario’s taxpayers and ratepayers.

© Parker Gallant

February 14, 2016

The opinions expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy. 

EDITOR’S NOTE: Mr. Duncan’s gig as a QP Briefing columnist is strictly a sideline; his day job is being a “Strategic Advisor” at law firm McMillan LLP

Mr. Duncan’s comment about the coal plant scrubbers is interesting: the province has gone on to spend many more billions on wind power, which doesn’t help climate change either.

Electricity costs up 97 percent in Ontario: power surplus exports rising

wind contract banner

Ontario gives away $4.5 billion ratepayer dollars; persists in directive to add more wind and solar

The GA or Global Adjustment first made its appearance on IESO’s Monthly Market Report in January 2007. As noted in the chart below, that year, the GA finished 2007 at $3.95 per megawatt hour (MWh) which means it cost Ontario’s electricity ratepayers about $600 million for the full year. In, 2015 the GA was just shy of $10 billion.

To be fair, the GA includes the price of “contracted” power, less the value given to it on the hourly Ontario electricity price (HOEP) market. As a result of Ontario’s high surplus of generating capacity and the intermittent presentation of wind and solar in periods of low demand, has resulted in the HOEP showing declining values. Despite declining values the cost of a kilowatt hour (kWh) of electricity increased from an average of 5.43 cents/kWh to 10.7 cents/kWh from November 1, 2007 to November 1, 2015 — up 97%. The upsetting part, and a driving force behind the 97% increase is surplus generation sold to our neighbours. We sell excess output to New York and Michigan, etc. without inclusion of the GA. The GA lost on those sales is charged to Ontario ratepayers and has become increasingly large. The chart indicates the “intertie flows” (exports/imports netted) initially cost Ontario ratepayers $20 million for 2007, but that has increased, and representing more $1.3 billion for 2015.

It is anticipated the annual cost of subsidizing surplus exports will continue to climb.

Scott Luft notes results for January 2016 are 20% higher than January 2015 for the cost of electricity as the HOEP was lower despite what Ontario’s Liberal government says about pricing stabilizing. With plans to add 500 MW of capacity for wind and solar, the climb will continue for at least another two years. Energy Minister Bob Chiarelli recently stated: “Our government’s focus is now on preparations for the next long term energy plan and the ways in which we can continue to drive down costs for Ontarians”. (Note to the Minister: a 97% increase does not “drive down costs”!)

Further reference to the chart points out addition of more wind and solar over the past nine years has driven up the percentage of renewables exported. The “Net Intertie” (net exports) increased from 19.6% in 2007 to over 57% in 2015.

What the Energy Minister needs to accept is this: we don’t need more intermittent and unreliable power.

That message is not getting through, despite evidence presented by the Auditor General of Ontario on several occasions and by numerous critics in the media.

Costing ratepayers $4.5 billion in after-tax dollars to help our neighbours is what’s happened. Perhaps Minister Chiarelli could suggest to Finance Minister Charles Sousa, that the money extracted from ratepayers provides no benefits to Ontarians. Perhaps a tax receipt is in order — that would help cash-strapped citizens, but there is a better idea.

The Energy Minister needs to immediately recall his directive to the IESO to acquire another 500 MW of contracts for intermittent wind and solar power.

© Parker Gallant,
February 7, 2016

The opinions expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.

Year Net Intertie 1. Global Adjustment Cost to Ratepayers % of Renewables to Wind Solar &
TWh 2. Million of $/TWh GA X Net Intertie Net Intertie Biomass generation
2015 16.86 TWh $77.80 $1,311 57.20%        9.65TWh
2014 15.15 TWh $54.59 $846 47.00%        7.12TWh
2013 13.40 TWh $59.22 $794 48.50%        6.50TWh
2012 9.90 TWh $49.23 $487 59.60%        5.90TWh
2011 9.00 TWh $40.48 $364 56.70%        5.10TWh
2010 8.80 TWh $27.18 $239 46.60%        4.10TWh
2009 11.30 TWh $30.56 $345 31.00%        3.50TWh
2008 10.90 TWh $6.12 $67 22.00%        2.40TWh
2007 5.10 TWh $3.95 $20 19.60%        1.00TWh
       Totals 100.40 TWh $4,473     37.00TWh

More turbines, more cost to Ontario electricity customers

Adding more power from wind at this point only benefits our U.S. neighbours, not Ontario citizens

 The ExPlace symbolic wind turbine. The reality is more turbines means more pain for Ontario consumers
The ExPlace symbolic “feel good” wind turbine. The reality is more turbines means more pain for Ontario consumers

It was a “WOW” headline for Cleantech Canada on their website: “180 megawatt Armow Wind project comes online in Kincardine, Ont.”  The article claimed Armow would power 70,000 Ontario homes each year. That’s a “stretch-goal” unless the average household in Ontario has reduced consumption from 800 kilowatts (kWh) per month to 675 kWh.  The Ontario Energy Board (OEB) maintains the average household consumes 800 kWh per month, but apparently, the anonymous author of the report did no research, and just assumed Armow would produce what he was told.

What will happen to the 475,000 megawatt hours (MWh) Armow might produce, probably in the middle of the night or in the spring and fall when Ontario’s demand for electricity is low?

If 2015 production from industrial wind turbines (IWTs) is the measuring stick, we should assume most of the generation we will pay the Samsung/Pattern partnership $135 per MWh for, will be exported!

The surplus power Ontario exported to Michigan, New York, etc. in 2015 was reported by IESO as 22,618 gigawatts (GWh). That’s enough to provide 50% (2.4 million) average Ontario households with the 9.6 MWh of annual consumption the OEB use as the basis for setting electricity rates. If Ontario was generating a profit selling surplus power we would all be happy, as it would reduce our rates. But that’s not how the Liberal government has reconfigured the system since first elected in 2003.

The average sale price of those GWh in 2015 was $23.58/MWh meaning their sale generated $533 million. Remember though, the sale price doesn’t include the Global Adjustment or GA (the price difference between the contracted rates of say, industrial wind, and actual market value1.).

The GA costs for those 22,618 GWh averaged $77.80/MWh in 2015, meaning the additional costs of generation picked up by Ontario’s ratepayers was $1,760 million. To be fair we also have to deduct the GA we saved by importing 5,763 GWh, which was about $450 million, reducing the ratepayer burden to $1.3 billion ($1,760 million less $450 million).   One would think the $265 per household subsidizing our neighbours should be treated as a tax-deductible gift, but the province instead levies a tax on the total GA for the exports via the HST. That means the province generated an additional $100 million for their portion of the HST, pushing the cost per household to $285.  And, the drop in the Canadian dollar in the past year made the purchase price for those U.S. buyers even cheaper.

Now if we look at generation from wind, solar and biofuel for 2015, you will note they were respectively 9,000, 250 and 450 GWh, representing 42.2% of all exports. If we include embedded generation, estimated at 4,500 GWh (principally solar), it would represent 62%.  If we look at the all-in costs of production with wind priced at an average of $130/MWh, solar at $500/MWh, and biofuel at $150/MWh, ratepayers are paying $2.4 billion or roughly $500 each per average household!

In short, adding more wind and solar power generation to Ontario’s mix only provides a benefit to our neighbours, but zero value to Ontario’s ratepayers.

Clearly, we don’t need more wind turbine or solar developments like Armow forced on rural Ontario, without consideration of the health and economic consequences. The province needs to back away from their plans to add another 500 MW of intermittent and unreliable wind and solar capacity now.

© Parker Gallant

February 3, 2016


  1. Market value is the value determined by the trading activity and the HOEP or hourly Ontario electricity price. Defined by IESO as: “The Hourly Ontario Energy Price, or HOEP, is the average of the twelve market clearing prices in each hour.”


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