Energy policy in Ontario: botched planning and bad forecasting

Ontario, you just can’t win, says Parker Gallant

Energy Minister Chiarelli (centre) and IESO's Campbell (R) at wind power lobbyist event: announcing  more money for Big Wind. For you? More pain.
Energy Minister Chiarelli (centre) and IESO’s Campbell (R) at wind power lobbyist event: announcing more money for Big Wind. For you? More pain.

One would think that recent revelations such as from Germany where it was stated “Wind Farms Paid €500 million-a-year-to-stand-idle” and China where they have put “a Chill on New Wind Energy Projects” would give Energy Minister Bob Chiarelli pause.

Instead in his luncheon speech at the CanWEA Spring Conference he announced Ontario would seek another 600 MW of wind capacity.  Maybe it was a way to obtain donations to the Ontario Liberal Party (OLP) from CanWEA and its members before rules on political donations are amended to the detriment of his party.

But if Minister Chiarelli had waited or inquired of the Independent Electricity System Operator (IESO) he might have discovered that wind played a big role in the unwelcome announcement from the OEB about the electricity rate increase that came into effect May 1, 2016.

The 2016 first quarter results, compared to 2015, might have opened his eyes. Alas, there was no pause, his eyes are not open, and Ontario ratepayers will feel the effects of his wind power announcement in the future.

Looking at 2016’s first quarter compared to 2015 shows wind generation from grid-connected and distributor-connected sources, coupled with curtailed generation (see above on the cost to Germany’s curtailment), in Ontario increased by 26.3% (772,500 megawatt hours [MWh] to 3.7 million MWh). This jump occurred as Ontario ratepayers were curtailing their demand, reducing consumption by 6.2% (2,308,000 MWh) or enough to supply one million average ratepayer households.

You might think Minister Chiarelli would tout his “2013 Conservation First” document as the reason for the drop in demand, but instead, he blamed the milder winter as compared to the prior two as the reason for the latest increase in electricity rates.  Because Ontario ratepayers didn’t use as much electricity, there was a shortfall in the forecast of revenue.

It is worth a look at the revenue generated in the 2016 first quarter versus the 2015 comparable quarter:

In the first quarter of 2016, Ontario Demand, as recorded by IESO, was 35,159,000 MWh and the cost of that power based on IESO’s record of both the HOEP (hourly Ontario energy price) plus the Global Adjustment (GA) paid out $3.847 billion for that demand.

The first quarter of 2015 saw Ontario Demand of 37,467,000 MWh and the cost of that power, HOEP plus the GA, paid out by Ontario’s ratepayers was $3.276 billion.

Those who can’t get the point of “paying more for less” will quickly note, in spite of consuming 6.2% less power in 2016, it cost $571.1 million more.  Quick math shows revenue jumped 17.4% despite the consumption drop, but it apparently wasn’t enough, hence the increase come May 1, 2016.  Had Ontario demand matched 2015, the cost to ratepayers would have been $875 million higher for the three months.

The other missing ingredients include: the 13% HST collected on the additional revenue which put $50 million into Minister of Finance Charles Sousa’s coffers, and the second benefit was he no longer had to budget for the 10% Ontario Clean Energy Benefit — that reduced the cost of the electricity line in 2015 by $328 million reducing our electricity bills by a like amount while increasing the provincial debt.

Wind power generation played a significant part in the cost to ratepayers producing power surplus to Ontario demand. The cost of wind’s generation in 2016 was about $494 million versus $391 million in 2015, an increase of $103 million. Its generation in 2015 of 2,941,000 MWh grew by 26.3% in 2016 to 3,713,000 MWh and represented 60.1% of Ontario’s gross power exports, up from 46.2% in 2015.  Ontario’s exports in 2015 generated revenue of $270.1 million in 2015, but only $67.3 million in 2016.  The cost to ratepayers to produce those exports in 2015 netted out to $280 million and grew to $609 million in 2016, an increase of $328 million or 117.2%.

What the first quarter clearly demonstrates: there is no need for more intermittent and unreliable industrial wind turbines producing out-of-sync with demand electricity, adding to ratepayer costs.

It also demonstrates the Wynne government’s conflicted messaging.  Wynne and Chiarelli both insist their policy is “conservation first” but when we comply, Chiarelli he blames rising prices on lower consumption. Ontario, you can’t win.

It is time Mr. Chiarelli examined the obvious: botched planning and bad forecasting by the agencies his Ministry directly manages or controls. The public is not being served.

© Parker Gallant

May 2, 2016

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

Comments

Andre Lauzon
Reply

It’s time to have Chiarelli locked up for the good of the Province.

Sommer
Reply

This mismanagement is making it quite clear that energy independence is the way to go. Get off the grid. Letting these people manage our money is making our future look very precarious in Ontario.
For those who can’t afford the investment to make the transition, the costs will continue to escalate out of control.
Why are people being so submissive? Is it because they just can’t wrap their minds around the magnitude of this mismanagement?

Steve
Reply

Sommer

I think that the people just don’t understand how to stop this. While I remember what my grandfather would have done, they seem to have lost the idea of power to the people. I also believe that with the inaction by the cons they feel like nothing can be done. The liberals have committed treason and should be removed for this. The ones we should be looking to is the cons to remove her. Except they are just as corrupt so there is no saving us. To me it’s time we shame the cons. Brown wants to be boss, well prove to us you can do it.

Sommer
Reply

Yes….I agree Steve. I actually didn’t feel I had anyone to vote for in the last elections. This issue is extremely important to me and no one addressed it in a satisfactory way during the campaign.

Moira C. Egan
Reply

Why are people being so submissive? Repeated messages in the controlled media, especially those delivered through television with its subliminal and truly hypnotic flicker, have brainwashed them. For years, documentaries and news shows and Hollywood films have told viewers that renewable energy is good for the environment and that to save the environment, sacrifice is necessary. (The environment is, except for the life of human beings, everything.)

The hypnotic message extends to faith in government itself and to a kind of worship of the state and its doctrines. Those are not always the doctrines of an individual elected official nor even of a political party. They are the doctrines established by global elite – the technocrats – and spread by their media agents and by employees of government and non-government organizations. The latter are funded by multinational corporations who benefit from so-called environmental legislation.

Once ‘the crowd’ is convinced of the truth of global doctrine, an individual who actually thinks and who challenges it, faces the jeering of the rabble and, “How could you know? Are you an expert?”. So fear of loss of social acceptance also makes many submissive.

At the same time, there are those who cannot ‘wrap their minds around the magnitude of this mismanagement’. Many are in a constant Facebook/Twitter/Sports/Porno/Pharma fog. If they turn in the fog to politics, they are guided by emotional lighthouses and feel their way to the voting booth.

It is just as the global elite like it. They told us that they wanted to destroy the industrialized nations. They told us that single family dwellings are not sustainable. What better way to get what they want than to make energy artificially scarce and outrageously expensive? Chiarelli is a stooge of the globalist elite, exactly what is called for in the UN’s Agenda 21.

Sommer
Reply

I appreciate your thoughtful response Moira. This is why I keep saying that our politicians,at all levels, with rare exceptions, have been ushering in the demise of rural Ontario.
No one seems to be able to see what Ontario will look like in years to come if we let them continue to promote this agenda. When confronted and asked to respond to questions about Agenda 30, they behave as if they have no idea what we’re talking about.

Elaine Cherrington
Reply

I have never been so disappointed in this Liberal government.They do not care about Canadians……hydro prices have gone through the roof,it’s like having another mortgage.So we had a mild winter so what,next year could be different,will they remove the increase “no”,but if Walmart doesn’t meet bring in as much money as the day before do they put everything up 25 cents to make up for it. Why do we always have to pay the price,we are all tapped out,we are taxed to death,we can’t get ahead,there are no jobs,but we keep paying out our tax dollars to refugees.When is this going to stop……

Pissed Off
Reply

We can win. First we get rid of the Toronto liberals. Then we make Toronto it’s own province. that way we don’t need to pay for Toronto’s infrastructure that 90 percent of the rest of Ontario pay for.. Honestly paying an extra fuel tax and emissions in southern Ontario to force us to use Toronto ‘s transit system. Hydro.. ever been to Toronto seen the wasted hydro on stupid large advertising screens for city events.. Liberals and Toronto will drain the rest of the province whether it is through hydro cost’s extra taxes. or whatever they dream up for us to support that City.. People who don’t believe me.. ask your self why southern Ontario is treated different.. Etests are only along the 401 corridor once you get north a bit there are no etests . Hell get a little further north and plates and sticker and insurance is much cheaper.. The Government thinks we are all stupid and don’t travel in our own province let alone the rest of the country

J.P. De Grandmont
Reply

The insanity of directions and control emanating from Toronto would rival anything that Monty Python has produced.

If Ontario is to survive, separating Toronto from our province may be the only answer.

Gregory Latiak
Reply

Thanks, Parker. It is a pity that the folks driving this train are not paying attention to this kind of information. Sometimes makes me think we need an updated Gullivers Travels…

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