OPG quarterly results: more pain for Ontario electricity customers

Our cup runneth over in Ontario: more wind and solar means more losses and expense to customers, says Parker Gallant
Our cup runneth over in Ontario: more wind and solar means more losses and expense to customers, says Parker Gallant

Surplus power due to added wind and solar; more cost to consumers

Ontario Power Generation released their March 31, 2015 quarterly results … and the media didn’t notice.  Too bad: they are interesting. Here’s what the media missed. (Emphasis is mine.)

Comparable profits dropped $8 million despite slightly higher generation.  The press release and quarterly report had a couple of interesting observations with the first one noting: “Ontario’s primary demand was 38.2 TWh during the first quarter of 2015, down slightly from 38.4 TWh during the same quarter of 2014. Baseload supply surplus to Ontario demand continued to increase in 2015 as a result of lower primary demand combined with increased baseload generation mainly from new wind and solar capacity. The surplus to the Ontario market is managed by the Independent Electricity System Operator (IESO), mainly through generation reductions at hydroelectric stations, nuclear stations, and grid-connected renewable resources.”

So Ontario’s ratepayers continued to reduce consumption in one of our coldest winters, at the same time as “new wind and solar capacity” entered the grid.  That wind and solar caused IESO to spill clean hydro, Bruce Power to steam off nuclear power, and wind and solar developers to curtail production.  All of the latter IESO endeavours, designed to ensure the grid’s stability, added costs to ratepayers by dumping those costs into the Global Adjustment pot.

The next noteworthy item in the OPG report was this: “The financial impact of forgone production due to SBG [surplus baseload generation] conditions at OPG’s regulated hydroelectric stations is offset by a regulatory variance account authorized by the OEB. During the first quarter of 2015, OPG lost 0.3 TWh of hydroelectric generation due to SBG conditions compared to 0.1 TWh during the same period in 2014”.1

Translation: bad management of the electricity sector in Ontario by current and former Energy Ministers!  It’s not “enough is enough to have seen Hydro One’s billing and smart meter debacles cause ratepayers pain due to lack of oversight; no,  to make matters worse our Energy Ministers keep adding useless wind generation to the grid increasing our electricity bills.

Here are a few more ways they inflicted pain on Ontario’s ratepayers:

  • In the first four months of the current year, ratepayers picked up $628 million in costs to sell surplus power to our neighbours in Quebec, New York and Michigan.
  • Wind production cost about $420 million for the 3.4 terawatts they produced for the first four months of 2015 when it wasn’t needed, and solar will cost as much or more in the current quarter.
  • We paid gas generators about $450 million in those same four months for being at the ready when the wind didn’t blow or clouds covered the sky.
  • The OEB reported Ontario had 570,000 households living in energy poverty.

Despite all this, Energy Minister Bob Chiarelli has decreed we need another 500 MW of renewable wind and solar generation this year.

©Parker Gallant,

June 3, 2015

  1.  OPG was forced to spill 3.2 terawatts (enough power to supply over 330,000 average households) in 2014.

Comments

Nancy Moisan
Reply

Why is nothing being done to correct this? It’s obvious to high and low that the Liberal government has it’s own agenda and it’s not for the good of the people. After mismanaging $50B, they continue to throw our $ outside the province to get rid of excess electricity we’re paying for and have the gall to say they will continue to install more windmills and solar systems. Someone has to step up and take this in hand, is there a philanthropist or expert who can pressure the right people to put a stop to this and especially before the sale of Hydro One. Publicity needs to be sent to inform any potential buyers of what exactly they will be getting themselves into. Thank you Mr. Gallant

Barbara
Reply

Potential investors will know what they are buying and if the price and conditions aren’t right they won’t buy.

A friend’s Hydro One budget bill is now over $500/month with electric heat and not a large house.

Leave a comment

name*

email* (not published)

website