This is the final chapter in the journey we started which looked at the Liberal promises made in respect to Ontario’s electricity sector early in their first election victory. The journey started in early 2004 as the Liberals aggressively attacked our electricity production and distribution system. We start this visit to Hansard on November 18, 2004, the day after an evening debate in respect to Bill 100, the Electricity Restructuring Act. This day the NDP’s Howard Hampton brought out remarks made by OPG’s Chairman, Jake Epp, a Conservative, that the McGuinty government had appointed earlier in the year raising this question for Energy Minister, Duncan.
“This is what Jake Epp says: “There are a lot of issues that need to be taken care of, whether you’re talking about supply, you’re talking about the market, whether you’re talking about OPG’s role,” in the private market. But what is he saying? No direction. No five-year plan. Not even a one-year plan.”
Premier, people don’t want to debate closure. They don’t want to debate your hatchet effort at democracy. These are real issues. Why are you so afraid of debating the issues that your own chair of Ontario Power Generation has raised?”
The Energy Minister, Hon Mr Duncan, was pointed in his response as the following demonstrates
“Now, this government has put a new board and chair in place at OPG. We have made decisions about the future of the company, and we’ll make them according to our timetable. Remember, when we came to office we inherited a company that was in complete disarray. We have to be deliberate and careful in the decisions we make. It would be impossible to turn OPG around in 10 months. The last thing we need to do is make knee-jerk decisions that result in flip-flops like we saw under the previous government, because it creates even further instability. I’m the first energy minister in almost a decade to give clear and consistent direction to the sector. Given the strong response we’ve received to our RFPs, I believe the industry recognizes this. We’re moving forward in a deliberate and positive fashion. When Bill 100 passes, we will have a new power authority and conservation bureau. We believe these are the right steps to ensure a reliable, affordable, safe supply of electricity for the people of Ontario.”
The comment from Duncan that stated; “I’m the first energy minister in almost a decade to give clear and consistent direction to the sector,” was no doubt sincere when given but consistencyhas not been the watchword of subsequent Energy Ministers. As just one example we would point to the “turn” around of OPG. OPG’s 2003 year end annual report noted that they had rated capacity of 22,777 MW and produced 109.1 terawatts (TWh) of electricity. The 2010 year end annual report saw OPG’s rated capacity at 19,931 MW (down 12.5%) and 88.6 TWh (down 18.8%) of electricity produced. This quote taken from OPG’s 2003 annual report indicated that,
“roughly three-quarters of our production is sold for a price that is considerably lower than the price other market participants receive, after taking into account market rebates.”
The foregoing aspect of OPG hasn’t changed but their drop in production has been taken up by more “market participants” consisting mainly of foreign based wind and solar producers who are paid from three (3) to fifteen (15) times the average price OPG receives. The “clear and consistent direction” that Minister Duncan spoke to that November day in 2004 has been effective. It has reduced OPG’s role in the province’s production of electricity, however, the costs of that direction has caused electricity rates to climb much faster then the inflation index and has driven many living on fixed incomes and others into energy poverty.
Just a couple of weeks later on December 9, 2004the Minister of Energy, Dwight Duncan presented Bill 100 to the Legislature for it’s third and final reading. The following are the highlights of his presentation:
“The Minister of Energy would kick off the preparation of the plan by providing to the OPA a series of directives.” a
“The ministerial directives would form the core around which the plan would be developed.”
“But consumption varies from year to year, and new technologies and upstart competitors can render expensive facilities obsolete before their usefulness expires.” and
“Ontario would have a combination of regulated generation facilities providing continuous power and other facilities competing in the marketplace to provide electricity to consumers. This element of competition and risk sharing with private investors in the market would provide a higher level of discipline on all electricity suppliers and reduce the risks borne by Ontario’s ratepayers
“While the burning of fossil fuels is often the most visible sign of the environmental cost of our electricity system, it should also be noted that the construction of high-voltage transmission systems, often cutting through otherwise untouched parts of our province, represents a serious environmental issue.” and
“Where possible and economically feasible, it is desirable that Ontario move to a more distributed system of electricity generation, where clean generation capacity is situated close to the consumers who require the power.”
“Consumers would have the benefit of stable and predictable prices and an electricity sector that emphasizes reliability, sustainability, diversity and affordability, all while being environmentally responsible.”
In retrospect all of the pronouncements uttered by Minister Duncan in seeking justification for Bill 100 have basically failed with the exception being the issuing of those “ministerial directives”.
The “plan” was produced and discarded, “consumption” has fallen as manufacturers, refiners and forest product companies have either left for other jurisdictions or gone bankrupt. The technology chosen, wind and solar is being discarded by the very countries that Ontario emulated in it’s choice of generation options.
The competition promised has turned out to be simply subsidies for wind and solar developers that have flocked to Ontario for the above market prices they are paid. The “risk sharing” envisaged was instead a provincially guaranteed return on investment (to be paid by ratepayers) whether you installed 100 megawatts of industrial wind turbines or 10 kilowatts of solar panels.
In order to hook up all the renewables to the grid “the construction of high-voltage transmission systems,” were ordered in those “ministerial directives” and those “untouched parts of our province” have become overrun with 400 foot industrial wind turbines, acres of solar panels both providing unreliable, expensive and intermittent electricity along with those “high-voltage transmission systems” that decimate the “untouched parts of our province”!
The concept of “a more distributed system of electricity generation” is still merely a concept with grid capacity stretched to avoid blackouts and the Independent Electricity System Operator (IESO) forced continually to export electricity at a loss or order hydro generators to spill or nuclear plants to steam off, all in an effort to balance supply and demand and all at considerable cost to Ontario’s ratepayers!
The promised “benefit of stable and predictable prices” for consumers was a pipe dream and the Liberal Party’s legacy in the electricity sector will stain the province for at least two decades.
Some plan, some legacy!
February 12, 2012