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.
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.