Ontario’s electricity customers: trapped in the henhouse with the fox outside
February 24th another banner day for exports, losses
The Independent Electricity System Operator (IESO) seems to think that what we lost a year ago can be made up in volume. Take the example of February 24, 2014 compared to February 24, 2015.
On February 24, 2014, Ontario exported 32,328 MWh of electricity which generated revenue of $1,932,250 at an average HOEP (hourly Ontario energy price) of $59.77/MWh. The cost of production that day to Ontario’s ratepayers averaged $95.10/MWh, meaning a loss of $1,142,142 was absorbed by Ontario’s benevolent electricity ratepayers.
One year later, on February 24, 2015, Ontario exported 112,968 MWh of power, producing $7,010,794 of revenue at an average HOEP of $62.06/MWh. The cost of that production is not yet firm but if we take the weighted HOEP average for the week of February 11 to 17th of $$41.40 and add it to the IESO forecast for the February 2015 GA (Global Adjustment), the cost of those exports (without factoring in constrained power, spilled hydro, steamed-off nuclear or payments to gas plant generators) to Ontario’s ratepayers will be $12,449,074 that is a loss of $5,438,280, and a cost to Ontario’s ratepayers.
To make matters worse, the wind was howling that day, producing 60,147 MWh or more than 53% of our export volume. Total exports of 113,000 MWh represented 24.7 % of Ontario’s total demand. The wind power production, at an average cost of $123.50 per/MWh, set the ratepayers back $7.4 million— the bulk (59%) of total export costs.
And now, not satisfied with burden Ontario’s electricity customers (that would be you and me) with the increasing costs of exporting surplus power, a proposal has been brought forward to increase our ability to export even more power at a loss, via the ITC Lake Erie Connector, a 1,000-MW high voltage connection to Pennsylvania.
Energy Minister Chiarelli is either the fox in the hen-house or he has let the fox in! Time to stop the madness and bring some relief to Ontario’s ratepayers.
February 26, 2015
The views expressed are those of the author and do necessarily represent Wind Concerns Ontario policy.