Ontario’s Power Trip: Happy FIT day | Parker Gallant
Pop the champagne, Ontario. September is the third anniversary of one of the most expensive and least useful experiments in top-down central planning in the province’s history. Three years ago, the Ontario Power Authority (OPA) released the original pricing model for the Feed-In Tariff (FIT) and MicroFIT programs after the passing of Bill 150, the Green Energy and Economy Act, in the spring of 2009. Under FIT, the Ontario government set sky-high prices for wind and solar power: wind generation at 13.5¢ per kilowatt hour and solar generation as high as 80.2¢ per kWh.
The original pricing model was revised down slightly earlier in the current year, a move that has done little to stem the flow of applications. As of last month, OPA reports applications for 12,000 megawatts for wind and 8,500 MW for solar, numbers that dwarf the government’s long-term target of 10,700 MW by 2030 for wind and solar combined — a clear indication that FIT and MicroFIT pricing has caused developers to salivate at the returns being offered.
As for the revenue, under Ontario’s magic FIT program, the $14-million will be paid by all Ontario electricity ratepayers. In effect, Ontario electricity consumers will help defer Toronto’s municipal tax increases. Essentially, the city of Toronto’s solar-panel revenue becomes an indirect tax on all Ontarians. In addition, the power that will be produced at 48.7¢ a kWh is power that Toronto currently buys at 7.2¢ per kWh (based on its filing with the Ontario Energy Board). Had the city purchased the $15 carbon credits along with the electricity at the foregoing rates, it would have saved ratepayers $1-million per year.