More bad news for Ontario electricity customers

As the Independent Electricity Systems Operator announces more Feed In Tariff or FIT contracts for more “variable” power generation (i.e., intermittent or, in a word, unreliable), and still plans to launch its Large Renewable Procurement II program this summer, Parker Gallant says Ontario’s electricity rates are set to keep climbing, with no end in sight.

Former Energy Minister Chiarelli (centre) and IESO's Campbell (R) with CanWEA president at wind power lobbyist event: more variable generation means higher bills for you
Former Energy Minister Chiarelli (centre) and IESO’s Campbell (R) with CanWEA president at wind power lobbyist event: more variable generation means higher bills for you

 

The IESO (Independent Electricity System Operator) just announced the award of 936 MiniFIT contracts that will add another 241.43 megawatts (MW) of long-term renewable high priced energy contracts to your local LDC (local distribution company) grid.

While most of the awards were for solar power and only 3 MW of wind capacity, the announcement follows former Energy Minister Bob Chiarelli’s April 5, 2016 directive to IESO to acquire another 600 MW of industrial wind turbine capacity. This directive was issued despite his knowledge that Ontario consistently exports surplus production and curtails (and pays) wind power generators, spills cheap hydro, steams off nuclear and pays gas plants to idle.

The IESO announcement means more tax dollars coming out of ratepayers pockets, too: a large percentage (over 30%) of the MiniFIT contracts were awarded to school boards, municipalities, and even a few local distribution companies, etc., to install solar panels on the roofs of their buildings allowing them to generate income for upkeep of the schools, etc.  With the renewable energy subsidies,  Ontario ratepayers are now picking up tax costs that rightfully should be in the purview of the Province who have responsibility for funding primary education and the facilities occupied by the students with our tax dollars.

More ‘variable’ generation forecast—that means, more expense

Just days before IESO’s MiniFIT announcement, the IESO Strategic Plan 2016-2020 was posted. I found this disturbing statement in the nine-page document:

“Operability – With the evolving supply mix, we face new operating challenges in managing the bulk power system. Increasing variable generation, integration of distributed energy resources, and changing demand and supply patterns are creating operability challenges with respect to regulation, voltage control and flexibility. The IESO, with stakeholder input, will develop cost-effective solutions to address these challenges.” 

As Ontario ratepayers know that last sentence hasn’t exactly played out the way IESO suggests it will in the future, with rate increases that have defied reason. Nothing has been “cost-effective”!

For example, a news release referenced as the Ontario Energy Report Q1 2016 has an “Electricity Prices” chart on page 11.   Comparison of the “Commodity Cost (cents/kWh)” discloses all-in costs for Class B ratepayers for January 2016 versus January 2015 were 31.4% higher, for February 2016 were 22.3% higher and for March were 26.5% higher.  If IESO’s display of a “cost-effective” solution means average increases of almost 27%, Ontario ratepayers can only expect things will get a lot worse.

The Smart Grid: a gloomy picture on cost?

Another example is related to IESO’s ability to manage the development of the “Smart Grid.”   As previously noted by Ontario’s Auditor General, the current government failed to produce a cost/benefit study for many of their decisions affecting the energy sector.  It now appears the Ministry of Energy finally commissioned a cost/benefit study which was completed by Navigant and referenced as the “Ontario Smart Grid Assessment and Roadmap”.  While the date on the 135-page “Roadmap” is January 2015, a check on the Document Properties of the file shows it appears to have been modified June 5, 2015.  Did the original document painted a gloomy picture and the Ministry required a tempering of the costs or forecasts?

The “Roadmap” provides an estimate of the costs of development of the smart grid and the estimated payback with the latter offering a best, expected, and worst estimate.   (One should recall that Navigant designed the Global Adjustment but it was originally called the “Provincial Benefit”.  We all know how that turned out!) 

The Navigant Roadmap estimates the cost of development of the smart gridNB:, including the $2 billion cost of smart meters out to 2035 will total $8.3 billion..   The “benefits” they estimate will flow from that investment are $3.8 billion at the low end and $9 billion at the high end.  The “expected” benefit is estimated to come in at $6.3 billion — that’s $2 billion short of the projected costs.

More bad news for ratepayers

So, putting all the bad news together, we should expect higher electricity rates come November 1st , 2016 when the Ontario Board resets the rates based on the big jump year over year in just the first quarter.  We should expect the additional MiniFIT contacts will result in higher prices as they are installed and the contracts click in, and we should expect the “smart grid” costs will grow much higher than forecast and add costs to our bills.

Finally we should expect the additional 600 MW of wind turbine capacity to be acquired under the Large Renewable Procurement II (set to begin in August) will result in increased costs due to both curtailment and an increase in surplus exports subsidized by ratepayers.

© Parker Gallant,

July 4, 2016

NB: The original cost estimate provided to the writer by IESO related to development of the “smart gird” (without costs of the smart meters) was $1.6 billion and contained in a Financial Post article on July 6, 2010.

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

Comments

notinduttondunwich
Reply

Wow…. hope all 75 municipalities that deem themselves non willing hosts are getting their pitchforks sharpened up and are practicing good and hard…… I doesn’t matter if you don’t want this crap you’re getting it anyways….. the fact that we are currently now producing more grams per kwh of pollutuon than 5 years ago is absolutely heartbreaking for any of us who really did care about the environment. …. how can these people be so ignorant to the facts…. the grey energy act will cause more pollution / kwh.

Pat Cusack
Reply

My current bill just in shows a cost of 29.5 cents per kwh, my brother in Vancouver area comes in at 10 cents. Should we be proud that Mz Wynne and cohorts can outprice all others? Bernie

Barbara
Reply

And with all of the cloud and haze cover there is over Ontario for much of the year! Not to mention the amount of darkness during the winter months.

Absolutely devoid of any common sense science.

notinduttondunwich
Reply

That’s nothing Pat….. in 5 years you can expect a 50 % increase….. just so sickening to try to live in this province…. even with hard evidence that the grams / kwh of pollution to produce our hydro is increasing not decreasing like the grey energy act was first suppose to do….these assholes find it necessary to stick it in us a little more…. what an absolute shitshow these clowns are running… look at those goofs in the article picture…. smug smiles on their faces as they piss away our kids and grandkids and our future away to big US corporations and all their lobbing buddies!!! When I feel the wind blowing now all I think about is how much MORE I’m paying!!!!
I’m going to fill my desiel tractor with fuel and let it idle all day…..later…..

Barbara
Reply

Re: Wrightman’s comment on wind production on the right sidebar.

Has anyone noticed that Ontario has been on the north side of the jet-stream.

Could the position of the jet-stream be a factor in IWT production?

Don’t storms and winds track along the jet-stream? The jet-stream has moved south at present but does move/track back and forth (north and south) across North America.

Has this been looked at?

Parker Gallant
Reply

My geography teacher in grade 10 taught us the location of the jet stream has a huge influence on the weather. It used to be a regular part of most weather reports but seems to be ignored now. Makes you wonder why?

Sandie
Reply

I think they are all full of shit. Just another reason to bankrupt Ontario and its people. I wish everyone would refuse to pay delivery costs because that goes to the government. Take a stand people, show them we are not going to pay anymore money for their mistakes. Now ship excess to the U.S. at a loss….duh

notinduttondunwich
Reply

Parker Gallant……. what is carbon intensity per kilowatt hour….. or CIPK ???? And how does it relate Ontrarios Grey Energy Act…..

notinduttondunwich
Reply

Hey Sandie don’t forget to take off the HST as well…. apparently electricity is not a necessity of life for us…..

Barbara
Reply

Corporate Knights Magazine, Canada, May 28, 2015

‘Are rich subsidies for solar holding the industry back? by Jigar Shah

“In places like Ontario, these decline rates were tied to the calendar, or to political decisions, as I warned in the 2008 and 2009, this clumsy approach cost the citizens of Ontario far more money than necessary.”

More at:
http://www.corporateknights.com/channels/clean-technology/rich-subsidies-solar-holding-industry-back-14327928

Barbara
Reply

CISCO – Report

‘Utility and Energy Security: Responding to Evolving Threats’

“Utilities and energy organizations are part of the critical infrastructure of any nation, which makes them a high-profile target for cyberterrorists and hackers alike. Modernization brings gains in efficiency, but this increases the attack surface through which threat agents can target utility infrastructure.”

http://www.cisco.com/c/dam/en_us/solutions/industries/docs/energy/security-benchmark-study-utilities.pdf

Security breaches have been on the increase according to this report.

Barbara
Reply

Smart Grid Awareness

‘Smart Grid Security: Threats, Vulnerabilities and Solutions’

Article has selected quotations from: International Journal of Renewable Energy and Smart Grid (IJRESG), Sept.2012.

https://smartgridawareness.org/privacy-and-data-security/smart-grid-vulnerabilities-a-more-detailed-review/smart-grid-a-more-detailed-review/smart-grid-security-threats-vulnerabilities-and-solutions

There is more information on Smart Grid security on the internet. A well known issue.

Barbara
Reply

Greenpeace | Pembina Institute, Report, Sept.2013

‘Renewable is Doable: Affordable and flexible options for Ontario’s long-term energy plan’

A Report on why Ontario does NOT need nuclear power.

Two of the three Authors: Shawn-Patrick Stensil and Tim Weis.

https://www.pembina.org/reports/renewable-doable-2013.pdf

Remember back to 2009 and those who were supporting the passage of the Green Energy Act?

Barbara
Reply

Linkedin: Jeffrey Harti

Third Author of the Above: Greenpeace | Pembina Report

Profile includes: Ontario Public Service

Ministry of Energy and Ministry of Energy and Infrastructure.

https://ca.linkedin.com/in jeffrey-harti-8878965

More information on the internet.

Barbara
Reply

Bloomberg, July 7, 2016

‘Tough to Keep the World From Warming When Carbon Is This Cheap’

“Governments have set inadequate targets due to lobbying pressure and they didn’t think carefully enough about overlapping efforts. That has destroyed investor confidence that carbon prices will rise.”

Quebec is mentioned in this article.

More at:
http://www.bloomberg.com/news/articles/2016-07-07/tough-to-keep-the-world-from-warming-when-carbon-is-this-cheap

T3..Tracy from Turbine Town
Reply

I found this interesting, appalling really; but I was also grateful. I went to Port Burwell in the late afternoon yesterday for a swim. It was a very warm day as you were aware. I really do prefer to go elsewhere, away from the turbines. I needed to cool off-go for a swim; it was closer for me, requiring less time and energy; and cheaper to travel the distance then to my preferred beach.
Not one turbine was turning; I counted 30. What a blessing. I stayed for an hour. When I left, one turbine had started up..great for sleeping…not.
It’s too bad; another nice little port town ruined by the presence of iwts.

T3..Tracy from Turbine Town
Reply

Sandie-stop paying delivery charges, great idea. Unless everyone does it; hydro will still get you.
I couldn’t afford to pay these at my home which sits vacant in Clear Creek. Hydro pulled the meter. Now I will have huge connection fees and need an inspection when I want to reconnect. Quite honestly, I could survive comfortably in my own home with a small generator…away from industrial wind turbines.

plumbritellc
Reply

Wow, great Article! This is the first time I read your article. Thank you so much, it is helpful and clear.

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