The Three Amigos grand power plan for North America: it’s gonna cost you
The Ottawa media was all abuzz with the recent Canada-Mexico-U.S. meetings and the glory days of collaboration ahead, but an interview with U.S. Energy Secretary Eugene Moniz was a little more specific on just what is expected of Canada. Ontario, it seems, could figure significantly in the grand plans for economic prosperity and climate change action. Except, it might come at great cost, says Parker Gallant
U.S. Secretary of Energy Eugene Moniz, was interviewed by public affairs channel CPAC in Washington in advance of the tripartite meetings associated with the North American Leaders Summit. At that summit, the three leaders announced a “joint environmental action plan” aimed at generating 50% of electricity from clean power by 2025.
In the interview, Secretary Moniz specifically mentions building a continental transmission grid to bring renewables from Canada to the U.S., and increasing integration of our respective energy systems. He labeled the latter as a part of “Mission Innovation” which Canada, Mexico and the U.S. have signed onto. He laughingly referenced his dedication to meeting the Paris COP 21 commitments to reduce emissions (inferred) by attending a meeting in Winnipeg with the two other “energy ministers” when it was 30 degrees below zero.
Presumably Secretary Moniz was aware that Canada, with particular emphasis on Ontario’s ratepayers, is doing all we can to help the U.S. reduce emissions by supplying them with cheap, emission-free electricity on an hourly basis. The latter is evident based on the Q1 2016 Ontario Energy Report. The report carries a rather telling chart indicating that out of 6.182 terawatts (TWh) of energy exported in the 1st Quarter of 2016, 4.986 TWh were exported to Michigan (2.557 TWh) and New York (2.429 TWh).
Collectively, those exports represented almost 81% of all Ontario-generated electricity exports in the quarter. Those exports could have supplied over 550,000 average Ontario households with power for a full year. The latter, co-incidentally, is roughly the number of Ontario households (571,000) found to be living in “energy poverty” by the Ontario Energy Board in a 2014 report.
Apparently Secretary Moniz wants more of Ontario’s cheap power. No wonder: we sold it to the U.S. at an average price of 1.1 cents/kWh in the 1st Quarter of 2016, while Ontario electricity ratepayers picked up 11.9 cents/kWh of the costs to generate them, according to the IESO March Monthly Market Report. In the CPAC interview, Secretary Moniz indicated the goal is to look at moving “renewables over long distances” by expanding the continental grid. He must assume that this is possible because of the cheap price for which Ontario sells off its surplus energy, which could make up for the significant line losses that will occur.
Those exported TWh to Michigan and New York were subsidized by Ontario ratepayers who picked up the Global Adjustment costs of $593 million towards the contracted production for the three months.
The message from Secretary Moniz is this: don’t send us (the U.S.) your oil by pipeline, but please do build transmission lines to carry wind, solar and hydro power to us … as long as you include a big subsidy, paid for by the ratepayers of Ontario.
© Parker Gallant, July 10, 2016
Sidebar: The writer has wondered for some time why U.S. electricity generators affected by Ontario’s cheap and subsidized electricity exports to the border states of New York and Michigan have not challenged us under the North American Free Trade Agreement. Guess we know why.