Ontario’s electricity costs a “freight train” says energy analysts
Here from AEGENT Energy Advisors, a commentary on the Ontario Long Term Energy Plan or LTEP.
Latest LTEP Can’t Stop the Electricity Cost Freight Train December 2013
- One key message in the provincial government’s new Long Term Energy Plan is that projected cost increases are much lower than in the 2010 plan.
- The essential fact about these cost increases is that they are driven mostly by the costs associated with new generation capacity coming into service that is the result of the government’s energy procurement priorities over the last several years. Virtually all of this capacity is contracted on terms that guarantee some level of above-market payments to the generator.
- The increased costs on our electricity bills are the result of these contract terms. So if you understand the terms of these contracts then future cost increases are largely foreseeable, and for the next several years there is little that can be done to mitigate the increases.
On December 2, 2013 the Ontario Ministry of Energy released the latest Long Term Energy Plan (LTEP), entitled Achieving Balance. The new LTEP is the first follow-up to the previous plan that was released in November 2010. Areas addressed in the new plan include conservation, nuclear and renewable energy.
Two prominent messages in the new LTEP are that much has and will be done to mitigate costs and that projected increases are significantly lower than those forecast in 2010. Figure 7 from the report shows the typical residential electricity bill forecast based on monthly consumption of about 800 kWh.
Read the full article here.