Revisiting former energy minister George Smitherman’s claim Ontario’s Green Energy Act would only cost 1 % a year. He was off a bit.

Shortly after former Energy Minister, George Smitherman introduced Bill 150, the Green Energy and Green Economy Act (GEA) in the Ontario Legislature, he appeared before the Standing Committee on General Government and was given 10 minutes.  One of the points he made was:  “We anticipate about 1% per year of additional rate increase associated with the bill’s implementation over the next 15 years.”
Mr. Smitherman was called on earlier this week to answer questions (presumably under oath) about a NAFTA action brought against Canada as a direct result of the GEA. The action was brought by Windstream Energy of the U.S. regarding its planned, offshore 300-megawatt (MW) capacity wind power development in Eastern Lake Ontario, the WWIS or Windstream Wolfe Island Shoals.
The testimony of Mr. Smitherman was reported on by Tom Adams who attended the hearing.  It should be noted the action is seeking $475 million and Mr. Smitherman was appearing on behalf of the plaintiff not in defense of Canada’s taxpayers.
If I were relying on anyone for testimony in respect to an issue such as this, my instinct would lead me to avoid seeking Mr. Smitherman’s help. The reason I say that is because of what he told the Standing Committee back in 2009, and what has happened since.
About that 1% forecast
The January 2016 reports from the Independent Electricity System Operator (IESO) for the hourly Ontario energy price (HOEP) and the Global Adjustment Mechanism (GA) are now out. When one compares the costs of the commodity (electricity) to January 2015 results, the increase is nothing short of a shock.
The combined HOEP and GA for 2015 was $80.23/MWh or 8.02 cents per kilowatt hour (kWh); that’s before before the 10% reduction that came from the Ontario Clean Energy Benefit (OCEB)^1. Which means the delivered cost of a kWh of electricity was 7.2 cents for most “Class B” ratepayers.   The values for January 2016, on the other hand, are $105.48/MWH or 10.55cents/kWh, combining the HOEP and the GA.
What that means is, the cost of the commodity (electricity) increased by $33.27 (3.33cents/kWh) year over year or, in percentage terms, the price jumped 41.5% … in just one year.
Wouldn’t we all love to cross examine Mr. Smitherman right now. We could perhaps inquire about his math skills and why he testified in 2009 that future electricity prices as a result of the GEA would be just 1% per year!
© Parker Gallant.
February 18, 2016

1. The OECB ceased effective January 1, 2016.

The opinions expressed are those of the author and do not necessarily represent Wind Concerns Ontario or its policies.