“We already launched an RFP last week for 300 megawatts of renewable energy, the first time in Ontario’s history, and soon we’ll be launching an RFP for 2,500 megawatts of new electricity in this province to help address the problem that was left by previous governments.” and delivered a sharp rebuttal as the following attests;
“That member and his policies were rejected by the people of Ontario last fall. Dalton McGuinty and his government are taking reasonable steps to ensure that adequate, fair and affordable electricity is available for all Ontarians.”
Looking back at Minister Duncan’s remarks that day in the Legislature it is interesting to note the co-incidence between the 2500 MW announcement and the 2500 MW deal that another Energy Minister negotiated (George Smitherman) a few years later and yet another Energy Minister, Brad Duguid signed. The latter 2500 MW is the controversial Samsung contract.
The OPA did eventually get their marching orders in September 2004 from the Minister and executed most of the contracts to fufill the first 2500 MWs that Minister Duncan announced on May 3, 2004. Most of the contracts signed were gas related and included the Mississauga gas plant which was mentioned in the OPA’s 2005 annual report. This plant was cancelled by the Liberals mid September 2011, just two weeks before voting day, in an effort to save two Liberal seats. The ratepayers and taxpayers of the Province are still waiting to find out what that will cost.
On the Minister’s promise to “ not sell off assets” Dwight Duncan was certainly truthful however, those assets have been weakened substantially as the OPG’s generating capacity and output have dropped (refer Chapter 3) thereby reducing OPGs value.
As ratepayers and taxpayers we must take issue with his comment referencing “fair and affordable electricity is available for all Ontarians” as we have had to endure rising electricity prices and their effects on the Ontario manufacturing sector.
Just over one year after Duncan’s address in this sitting the foregoing was brought to light by the Economics Division of the Parlimentary Information and Research Service as they delivered a reportdated September 22, 2005 to Parliament that contained the following;
“Ontario is Canada’s industrial heartland and long-time economic engine. To a large extent, that engine is powered by the supply of relatively cheap, reliable electricity, which has played a key role in the development of the province’s energy-intensive sectors such as manufacturing, chemicals, paper and metals.Today, there is growing anecdotal evidence that the lack of a reliable and low-cost supply of electricity [emphasis is the writer’s] is becoming a competitive disadvantage for many businesses operating in Ontario. For example, the Ontario Minister of Natural Resources’ Council on Forest Sector Competitiveness has warned that rising electricity prices are putting enormous pressure on the province’s already beleaguered forest industry. This industry, which employs some 85,000 people and is described by the Council as the economic bedrock of northern Ontario, has long depended on low-cost electricity, since electricity can account for up to one-third of operating costs.The Government of Ontario has pledged to close all existing coal-fired generating stations by 2009 in an effort to clean up Ontario’s air and reduce greenhouse gas emissions, which are linked to climate change.
Most environmentalists and health care professionals strongly support the government’s plan to phase out the use of coal by the beginning of 2009. But electricity experts are concerned about the impact this rapid change could have on the reliability of Ontario’s electricity grid.The IESO has characterized this initiative, the cornerstone of the government’s electricity strategy, as the “largest and most significant electricity system change ever undertaken in Ontario,” as it will remove 6,434 MW of generating capacity from the grid, representing approximately 21% of the current total.“
So a little over a year after Duncan’s remarks in the legislature, the Federal Government received a disconcerting report that Ontario, Canada’s “long-time economic engine” was in danger because of the lack of a reliable supply of relatively cheap electricity. That damning report and the concern expressed therein did not alter the drive by the Liberals to continue their push for expensive intermittent electricity-instead they subsequently passed the Green Energy Act which has futher accelerated the drive to create an uncompetitive environment for industry.
As further evidence the Ontario Forest Industries Association in their January 2011 pre-budget appeal to Minister of Finance, Dwight Duncan had this to say as a “Made in Ontario challenge”;
“Despite the anticipated recovery of global markets, and the desire to put Ontario’s wood back to work, Ontario’s renewable forest sector continues to face numerous, significant “home grown” made in Ontario challenges. The continuous loss of industrial wood fibre through untested public policy, uncompetitive electricity rates,and government red tape have all contributed to the creation of an uncompetitive economic environment in Ontario.”
Elsewhere in the report they make this observation; “All of these regulatory and policy initiatives have sent a clear and unfortunate message to industry – Ontario is not open for business. Instead of developing policies that stimulate growth and incite investment, the Ontario government has focused its attention over the past several years almost exclusively to protectionist agendas and unnecessary and untested initiatives that instead have only served to create considerable uncertainty, stagnate development and reduce economic investment.”
Looking further the Canadian Federation of Independent Business in it’s presentationto George Smitherman July 13, 2009 noted “Fuel, energy costs” as their # 1 concern and made three recommendations:
- “Price matters! It should not be a “given” that electricity costs are inexorably rising. The Global Adjustment Mechanism must not be allowed to grow out of control.”
- “Lots of onservation programs-not many suited to the SME sector. Allow businesses to choose programs that are suited to them, as opposed to having them imposed by LDCs or the OPA.”
- “Ensure RPP and TOU fairness for small business. CFIB continues to warn that implementing TOU without understanding impacts may endanger businesses and jobs.”
The foregoing hard evidence from two of Ontario’s biggest group of employers supports the premise contained in the Auditor General’s report of December 5, 2011 wherein he states: “We also noted that studies in other jurisdictions have shown that for each job created through renewable energy programs, about two to four jobs are often lost in other sectors of the economy because of higher electricity prices.”
The Auditor General’s report had this to say about the Global Adjustment:
“By 2014, the GA is expected to be 6¢ per kilowatt hour (kWh)—almost two-thirds of the electricity charge—and will be almost two times more than that year’s projected HOEP.Based on our analysis of OPA data, renewable energy contracts will contribute significantly to increases to the Global Adjustment. As illustrated in Figure 3, the total GA is expected to increase tenfold province-wide, from about $700 million in 2006 to $8.1 billion in 2014, when the last coal-fired plants are phased out. Almost one-third of this $8.1 billion is attributable to renewable energy contracts.”
Premier McGuinty and his Liberal Ministers have failed to deliver on his promise to bring “fair and affordable electricity” to Ontarians and instead has changed the “ anecdotal evidence” cited by the Federal report of almost 6 years ago into hard evidence that the Liberal policies have cost Ontario good well paying jobs in the manufacturing and forest product sector.
January 7th, 2012
The Ontario Liberals, via the Ministry of Finance, gave marching orders to the Municipal Property Assessment Corporation (MPAC) yesterday tellingthem to not increase assessments for “property owners who install renewable energy technologies”.
Property assessments increase when property improvements are made. As soon as a building permit is issued the municipality sends a copy to MPAC. That permit copy is used by MPAC to increase the assessed value of the property and the following year property owners pay additional property taxes because of the increased assessment.
The headline on the Government press release read; “Improving Property Tax System for Green Energy“ but it comes at the expense of others who can’t afford the installation costs. This change will impact municipal tax revenue increases that have normally accrued though the issuance of those building permits.
The press release carried the endorsement of Dwight Duncan, the Minister of Finance who will soon be told by economist Don Drummond to slash spending or miss (by years) balancing the budget by 2018. Minister Duncan had this to say in the press release: “Ontario is leading the way when it comes to producing reliable energy from clean, renewable sources. These changes will help ensure that property tax assessment does not discourage property owners from contributing to a green energy system that supports a cleaner environment and healthier families.” The message is clear; if you have the money to invest in renewable energy Ontario ratepayers and taxpayers will ensure you earn a healthy return!
As an example; the costs of a solar installation of say 10 kilowatts (kw) will cost from $58/$80,000 depending on location and whether it will track the sun’s movement. Under the MicroFIT program the installation is estimated to generate from $93/$150,000 profit (over 20 years) depending on the installation type chosen.
Mr. Duncan’s salvo against the municipalities will not help achieve a balanced budget for the province and might make it worse if he weakens the municipalities tax base. Those municipalities (mainly rural) with lots of small installations of wind, solar and anaerobic digestion electricity generation will be knocking on the doors at Queens Park or face the ire of their local property owners who will see the mill rate and their taxes increase. Building permits, which normally signal increased municipal tax revenues will mean nothing other then the fees collected for the permits.
The Association of Municipalities of Ontario (AMO) has an MOU (memorandum of understanding) with the province and their website contains the following message under their “Mandate”; “The MOU provides the opportunity for municipal input and reaction to provincial policy ideas (pre-consultation) so that they are fully informed as part of any provincial policy making process.” We understand that AMO was “aware” of the plan by the Finance Minister to direct MPAC to treat the assessment of renewable energy installations differently but the extent of the “pre-consultation” process was not fufilling and AMO has sought clarity.
AMO has taken issue with many aspects of the FIT and MicroFIT programs as is evident from their submissionof December 6, 2011 to the Ministry of Energy and the Ontario Power Authority (OPA) wherein they have made 14 recommendations to improve their role in these programs. It appears the fallout of the Finance Ministry’s press release of January 4, 2012 treats the municipalities with the same respect as they were given under the Green Energy Act—absolutely none!
January 5, 2012
“The member is right, this is a challenging target that we’ve set: 5% by 2007, 10% by 2010. Yesterday’s announcement by the Premier empowers Ontario electricity consumers by providing them with the knowledge, the tools, the opportunities and the incentives that will allow them to achieve very significant energy savings.”
“Smart meters are a key conservation tool. With this technology, consumers will be able to see, understand and learn when it’s appropriate to adjust their electricity use. Smart meters will also allow consumers to benefit from time-of-use rates. These rates will benefit consumers who use electricity when demand is lower. Many consumers who currently use electricity during these times will now be able to benefit from these rates. Not only do smart meters help consumers use electricity during peak demand periods, but they also benefit their local system and grid by keeping costs and prices down even more.”
“We are also taking action to improve air quality. We are committed to shutting down the coal-fired generating plants that produce smog-causing pollutants and greenhouse gases. It will not be easy, especially given the shambles of Ontario Power Generation and the strains on our power grid, but there are alternatives. I am heartened by the success of projects such as Toronto’s first windmill.”
“Then, in October 2001, Mr McGuinty said, “Throughout Ontario’s electricity restructuring process, Dalton and the Ontario Liberals have been consistent supporters of the move to an open electricity market in Ontario.”
“In December 2001, when someone named Mike Harris announced that he was going to privatize not only Ontario Power Generation but Hydro One, Mr McGuinty said, “I think that it’s important that we move ahead with competition, both in terms of generation and in terms of transmission.” In May 2002, when the deregulated market opened, Mr McGuinty said, “My party supports competition in the generation of electricity.”
“I can only say that the member must not be familiar with the contents of the announcement that was made today in the documentation by way of background or the like that was made available to everyone, because what this plan is going to do — and I would tell you that the minister has worked very hard on this.” “It is thoughtful, it is methodical, it is responsible and it will ensure that homeowners and small businesses alike can participate in a stable, predictable rate regime that will be part of a broader plan to build more generation in Ontario, to incent more conservation and to ensure that we can, over the long term, have in place a reliable, sustainable supply of clean electricity in Ontario.”
“What we intend to do is preserve the public assets through OPG and to invite the private sector to join us in creating the necessary generation. I just don’t think any objective, reasonable observer would say to OPG, “Yes, we trust you to generate the necessary 22,000 or 23,000 additional megawatts we’re going to need between now and 2020.”
“The previous NDP and Conservative governments have left our energy sector a disaster. So imagine my surprise when I heard a conversation that took place last Friday on Metro Morning. These are the folk, the NDP, who used Hydro to buy a rain forest in Costa Rica and they cut our lifeline by cutting a lucrative contract to Manitoba.
The Tories as well squandered a North-American-wide economic boom and failed at the same time to renew our generating capacity, and yet I wonder why. I wonder if it’s because Mr Tom Long received over $2 million in a contract; Mr Paul Rhodes got more than $800,000; Michael Gourley received more than $4 million; Leslie Noble received more than $300,000; and Jaime Watt received $800,000. Maybe they were too busy signing contracts to keep our lights on.
But better still, the member from Rainy River has taken up hydro hypocrisy. Throughout the election, and for years, the NDP has been demanding that coal-fired plants in Ontario be closed or converted. They even put it in the 2007 pledge for their platform. They wrote the Ontario Clean Air Alliance as well to close all the plants. It was their promise. At least it was until Mr Hampton, the member for Rainy River, cried to keep the coal plants open. He even said he ran on keeping the coal plants open – unbelievable.”
“My question is for the Minister of Energy. People in Oakville have been shocked recently by allegations of impropriety at Hydro One. They were troubled to hear that during the term of the previous PC government, people who were well known to be friends of the government were awarded lucrative, untendered contracts. Minister, can you outline to the people and businesses in my riding what process you plan to use to ensure that contracts are awarded in an open and transparent manner, unlike the previous government’s method of dealing with contracts?”
“The first step we took was to make sure that, unlike the Conservative government, we won’t treat Hydro One and OPG like our own private country club; that’s ended. Their record on hydroelectricity: no new generation in eight years; a price cap that cost the taxpayers of Ontario $850 million; no renewable electricity in Ontario; no development under your administration. But all the while they had money for their friends and contacts, people who didn’t have to go through a tender, people who would work for a year or two and go off and get all kinds of goodies.
Well, those days are over, thank goodness. This government’s bringing change to electricity. We’re bringing safe, secure, reliable new supply at an affordable, predictable price for the people they ignored for eight long, painful years.”
“Speaking of growth, we embrace our responsibility to bring forward a plan that will ensure Ontarians have a lasting, reliable supply of clean and affordable electricity.”
“ On paper, Hydro One and OPG have only one shareholder, the province of Ontario. In fact, there are about 12,112,000 shareholders, the total population of our province. These 12 million shareholders will find it much more difficult than other shareholders to understand what is happening at Hydro One and Ontario Power Generation because they don’t receive annual reports and, of course, they don’t attend stockholder meetings. They must rely on us, members of Parliament, the government, as their only proxy to keep close watch on these companies and to protect their interests, the interests of Ontarians, these 12,112,000 people. Doesn’t this give us a much more onerous task than the directors of any other public company? Of course it does. Are we not more responsible for surveillance, not less? Is it not more important then that all of us in government have an absolute duty to be more resolute, more demanding and more ethical than any other shareholder or director?” and this;
“We will make certain that some of the money we will force Hydro One and Ontario Power Generation to spend more wisely will go to initiatives that include aggressive conservation, new and greener sources of supply and an accountability to help us meet our objectives of cleaner air, consumer protection and a sustainable supply of electricity for generations to come.” and this;
“This bill is an important and integral part of the stand of the Liberal government. It means we’ll be able to take the dollars and apply them to health, education, our seniors and long-term care. It will make a difference in terms of the compensation that will come. It will make a difference in terms of what will happen in the future for the children in this province.”