Ontario’s spooky “phantom power”: beware!

Ontario: we have to pay for more wind turbines because of THIS!
Ontario: we have to pay for more wind turbines because of THIS!

Phantom Power? Beware of Phantom messaging

The Conservation First theme of Energy Minister Bob Chiarelli‘s Long-term Energy Plan (LTEP), “Achieving Balance,” is in full swing these days as evident by the brochures that arrive in the mail, and with our (inflated) electricity bills.  The various local distribution companies (LDCs) are out promoting the  message where ever and whenever they can.  The brochure from Toronto Hydro told me to “BBQ my meals,” have an “energy-free night” once a week, and start an “energy waster jar” and fine my kids for leaving lights on!

They also tell me to unplug electronics to avoid paying for “phantom power.”

Hydro One has a lot to say about “phantom power” and this one is particularly amusing, as they first tell you to purchase “energy efficient” appliances but later on warn you:

“ Too many clocks in the kitchen? Appliances with clocks use electricity when not in use. When purchasing new appliances, look for ones without a clock feature. As well, if you have pay-tv services, you may want to keep your cable television converter powered up at all times, otherwise you risk rebooting problems.”

These are “words of wisdom”?

So the LDC providing you with progressively more expensive electricity tells you to stop wasting that “phantom power” but have no hesitation billing you for power you don’t consume.  The difference is they refer to “phantom power” as “line losses.”  In the case of Toronto Hydro, you are billed for 3.76% for power you didn’t consume—for Hydro One it can be as much as 9.2%.

That “phantom power” they don’t deliver is now hidden in the “delivery” line of your bill.

Conservation? Or, hypocrisy?

© Parker Gallant

April 7, 2015

 

New assistance program creates more energy poverty in Ontario

Peasantry

Peasants in the Middle Ages: we’re getting there

On March 26, 2015, one day before release of the “Sunshine List”, Ontario’s Minister of Energy Bob Chiarelli announced the province has “low-income” electricity consumers who struggle to pay their electricity bills—and he intended to do something about it.

What a surprise: there is no denying the Liberal government forced more households into “energy poverty.” But Chiarelli’s press release and his diatribe at the press conference didn’t use that term; he blamed the need to close “dirty coal plants”* for rising costs. He wasn’t specific on how many “low-income” households there were or how many would benefit in his announcement, which was a followup to his letter of April 23, 2014 to the Ontario Energy Board (OEB), asking for recommendations to “protect low-income residential customers”.

The OEB submitted a 45-page report, and recommended “a maximum credit of $50 per month or $600 annually, with an average credit of $27.” to provide relief. The cost estimate by OEB to provide this assistance was “between $175 and $225 million” including “administrative costs of approximately $20 million” or (10 per cent of total program cost). The report suggested 500,000 households or about 11% of the 4.5 million hooked up to the grid would be in the “low-income” group. The report (dated December 31, 2014) was released to the public by the OEB the same day Chiarelli made his announcement. The media had no time to review it and question the Minister.

The prior (and retained) support program, LEAP (Low-income Energy Assistance Program), in 2013 had a total cost to ratepayers of $3.7 million which is/was a cost to ratepayers of less than $1 per year.

One would expect social support programs to fall under the Ministry of Community and Social Services, but with that cupboard empty and Premier Wynne and Finance Minister Sousa promising to balance the budget by 2017/18, a “revenue tool” had to be found somewhere. Wynne and Sousa presumably saw Hydro One (which just received a sizeable rate increase from the OEB) and its billing debacle as a looming “energy poverty” problem, more to do with high electricity prices. So Minister Chiarelli, who uses Tim Horton’s coffee as his reference currency, was the “go to” person. The plan concocted was, let’s ding the ratepayers! The OEB ran the numbers and told him the cost could be a “monthly fixed charge for a residential customer” of $2.55.   One large “Timmies” a month or $31 a year! The balance of the costs suggested were to come from a volumetric (per/kWh) charge on other users.

Chiarelli in his press release highlighted removal of the “debt retirement charge” and inferred that his cost of “less than a dollar a month” or $12 a year, support of low-come users would not impact ratepayers. The release said “Removing the Debt Retirement Charge will save the typical residential electricity ratepayer $5.60 per month” (or $67 a year). The press release failed to mention the “Ontario Clean Energy Benefit” (OCEB) will be removed at the same time, increasing the typical residential electricity ratepayer’s bill by $170 a year. Quick math indicates 4 million ratepayers would pay an extra $115 annually ($170 + $12 = $182 – $67 = $115) with the balance presumably paid by commercial consumers. So, the promise of no impact wasn’t true!

Minister Chiarelli opted for the OEB to implement “a fully volumetric charge applied at an equal rate to all rate classesvia his letter of February 17, 2015 to the OEB. The letter was brought to my attention by Bruce Sharp who also ran the numbers on the cost to ratepayers. Chiarelli’s choice was to increase the per kilowatt (kWh) charge to all ratepayers so that one large “Timmies” per month became $130 per annum, pushing up the average bill on January 1, 2016 by $300! That will put the all-in rate to an average Toronto Hydro customer at 25 cents per kWh. In 2003 the all-in charge to that ratepayer was 8.8 cents a kWh—an increase of 184%!

Why didn’t Minister Chiarelli insist the “$175 and $225 million” cost of this program come out of the OCEB? The OCEB costs taxpayers $1.1 billion annually, but this money appears earmarked for a revenue grab by Finance Minister, Sousa, presumably to impress rating agencies and reduce the deficit, leaving ratepayers to pick up its cost. This will push more ratepayers into energy poverty by using Ontario’s “middle class” households to pay for something the Liberal government created.

Simply put, this government’s attempt to balance their budget on the backs of ratepayers is a tax grab labelled the “Ontario Electricity Support Program” (OESP). Reducing taxpayer spending by $1.1 billion by eliminating the OCEB, grabbing a further $175 to $225 million after-tax dollars (with $20 million for another bureaucracy) to fund the OESP, and $200 million more in HST from ratepayers is a Wynne “revenue tool” and a $1.5 billion tax grab!

When will this government understand that ratepayers are also taxpayers?

© Parker Gallant

March 28, 2015

*Editor’s note: Using expensive wind and solar power

Hydro One billing errors: no ‘fix’ even after a year

As if skyrocketing power rates, due in part to “renewables” like wind, wasn’t enough, billing system woes continue at Ontario’s power monopoly Hydro One, despite promises to fix the situation. Here is an update from Parker Gallant.

A year ago, on March 7, 2014, the Ontario government undertook what the Toronto Star referred to as a “shake up” following “an over-billing fiasco and a scathing Auditor General’s report.” The former referred to Hydro One’s mess after implementation of their new billing system, and the latter referred to “nepotism” along with high wages and benefits at OPG.  The government appointed Sandra Pupatello (runner-up to Kathleen Wynne in the Liberal leadership race) to right the wrongs as the new Chair of Hydro One.   She was quick off the mark stating, “We are going to fix it” (the billing problems).

It’s not fixed but hopefully, Ms. Pupatello is enjoying her $150K stipend for acting as the Chair of Hydro One while retaining her position as Chief Executive of the Windsor Essex Economic Development Corporation which pays her about the same amount.

The same can be said for the spokespeople* at Hydro One who appear in several short videos on their website apologizing for the billing mess.  On the same page is a letter dated October 14, 2014 from Hydro One’s CEO, Carm Marcello addressed to the Ombudsman, Andre Marin.  In the letter he tells the Ombudsman he will shortly announce he is setting up a “Customer Service Advisory Panel” that consists of perhaps only one actual Hydro One customer, former Chief of the Saugeen Ojibway Nation,  Randall Kahgee!  Marcello also informs the auditor he plans to issue a draft “Customer Commitment” document!

Eighteen months after complaints started and eight months after the Ombudsman announced he was investigating Hydro One’s billing mess, the CEO suddenly became enlightened!  The CEO of Hydro One, the provincially owned monopoly electricity distributor to 1.2 million ratepayers, with a 134-page Conditions of Service agreement, suddenly noticed they had tens of thousands of billing problems!

If you venture into their “frequently asked questions” (FAQ) page about the Ombudsman’s investigation they state: “approximately 3 per cent of our customers have received estimated bills for too long and about another 2 per cent have gone for more than 90 days without receiving a bill.”

If one does quick math on the 3% plus the 2% you will quickly surmise 5% of Hydro One’s customers have billing problems.  Five per cent (5 %) of 1.2 million ratepayers represents sixty thousand (60,000) ratepayers.  While there is no admission of screw-ups in the videos or in Marcelo’s letter; reading the answers to the FAQ sure makes one suspicious Hydro One is trying to hide something!

Here are a few examples. I invite the reader to judge Hydro One’s ability to obfuscate.

1.What are the Hydro One billing issues I’ve been hearing about?  The move to the new system was required to improve customer service while replacing outdated and unsupportable technology.

2.What is Hydro One doing to fix this issue?  We are manually reading over 11,000 two-tiered meters to correct bills that have been estimated.

3.Why do I keep receiving an estimated bill when I have a Smart Meter?  The reason you have an estimated bill is that the meter is not communicating properly with our network.

4.Why is my bill so high? Unfortunately some customers have experienced inaccurate estimates. (So why does the answer to Q. 6 state:  “billing issues you may have heard about in the media are not related to meter accuracy.”)

5.Will I get a bill for an actual reading soon? Right now Hydro One is manually reading over 11,000 two-tiered meters for customers who have been billed on estimates. If your meter is part of this program, you should receive an actual bill soon.  (So, 60,000 bills messed up and only 11,000 meters being read!)   

6. Is the accuracy of Hydro One’s meters causing the billing issues?  Secondary tests are completed by Hydro One as they arrive from the manufacturer and then again we have sample testing of meters once they are ‘in service’.

7.Why has my meter been changed twice?  There have been some cases where the meter is not communicating properly with our network.

8.I use baseboard heating in my home. What can I do to conserve energy?  For homes that are heated with electricity, those heating costs make up to 60 per cent of your bill.

None of the answers admit to the screw-up with the new Customer Information System (CIS), nor to the purchase of “uncommunicative” smart meters. There is also no indication that any employee lost their job because of  these mishaps!

A full year has gone by, and the billing mishaps continue despite the promise by Ms. Pupatello to “fix it.”  The energy portfolio continues to be mismanaged without any consequences.   If an error of this magnitude occurred at a privately owned company, shareholders would demand action— but that’s not how things work at the provincially owned monopoly that is Hydro One!

© Parker Gallant,                                                                                                              March 10, 2015

* Average annual salary of the four Hydro One spokespeople on the letter and videos from the 2013 “Sunshine List” is $315,323. Lowest is $151,405 and highest is $724,917.  Hydro bills to these four are like buying a cup of “Timmies” coffee!

Editor’s note: The billing mess continues, as Parker says. In today’s Ottawa Citizen is a story of a couple who were billed $25,000 in error. A Hydro One “customer care specialist” is reviewing their account. The Office of the Ombudsman of Ontario has received 9,800 complaints about Hydro One, the Citizen reports, the most complaints ever received about a single organization.

The views expressed here are those of the author and do not necessarily represent Wind Concerns Ontario policy.

 

Ontario’s big wind bonanza: subsidies for a few rich developers

The sad (and very expensive) truth
Rural Ontario communities had it right

Everyone losing on renewable energy in Ontario

FP Comment, Financial Post, February 4, 2015

by Brady Yauch, executive director Consumer Policy Institute

When the Ontario government launched its Green Energy Act (GEA) in 2009, it promised “new green economy jobs” and a “wide range of ecpnomic opportunities.” Then Minister of Energy George Smitherman argued that the GEA would be a boon to Ontarians of all stripes: “We see opportunities in our rural communities for farmers, not just to lease their land for big companies that are the proponents of wind farms, but indeed for clusters of farmers to see themselves as investors in projects … the emergence of thousands of smaller green energy projects–micro-generation–in urban as well as rural areas.”

Yes, everyone would need to pay a little more for renewable power, the public was told, but the benefits would be widely shared, for the ultimate benefit of all.

As it turned out, power rates didn’t go up a little–they soared. And the subsidies weren’t widely shared among the folk–a handful of billion-dollar companies pocketed most of them, most outside the province.

According to an analysis by the Consumer Policy Institute and Energy Probe, 90 per cent of the wind subsidies went to just 11 companies,  80 percent of the subsidies went to companies with revenues over $1 billion, 60 per cent of the subsidies went to six companies with more than $10 billion in annual revenue. …

The damage to ratepayers for such policies has been significant. Since 2009 ratepayers have seen the commodity cost on their energy bills climb dramatically… just over 9 per cent annually–more than five times the rate of inflation, making electricity price increases worse in Ontario than anywhere else in Canada.

To make matters worse, the high rates being pushed onto ratepayers has lowered demand for electricity across the province in recent years. That means Ontario now has a significant surplus of power* which it exports to neighbouring jurisdictions at a loss. Ontario ratepayers are now subsidizing the energy consumption in America and other provinces.

Nearly everyone is losing when it comes to renewable energy in Ontario–except for those few companies that planted industrial wind turbines across the province and are receiving billions in subsidies for their effort.

 

*Note: Wind Concerns Ontario issued a statement Monday to the effect that Ontario does not need more wind power and that the IESO should not reopen the contracting/subsidy process for new wind power contracts.

Wind power in Ontario: starting with the “perceptions”

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Part II of  Prepare to be Persuaded: asking the question about impressions of wind power

The first question in the Nanos Research Survey conducted from May 25th to June 1, 2014 for CanWEA was this: “For the following ways of generating large-scale electricity/electricity used by communities, industries, businesses, please rate your impression as very good, somewhat good, somewhat poor or very poor.

The 500 telephone calls randomly made to 250 GTA residents and 250 “other” Ontario residents reaped the following results: respondents gave hydroelectricity a 86% “very good” or “somewhat good” response making it the clear winner; solar came in second with 70%, gas third with 68%, wind was fourth with 65% and nuclear close behind with 63%.

Now if one travels back to October 2007, an Angus Reid Strategies survey reported “89 per cent of respondents said that using renewable energy sources like wind or solar power was positive for Canada, because these sources were better for the environment.”

The fall from grace for wind as a generation source for electricity as perceived by Ontarians might be connected to this set of facts.

  • In 2007 Ontario had 500 MW of wind capacity
  • There were about 250 turbines (includes the iconic Exhibition Place turbine) in Ontario
  • By June 2014 there was about 3,000 MW of wind capacity in commercial operation, and 1,300 turbines (some 500 feet high) in many communities outside the GTA
  • The Ontario Power Authority has an additional 2,600 MW contracted for under development, which will add another 1,000 turbines in many other Ontario communities
  • the average price of electricity in 2007 was 5.4 cents/kWh and the average price of electricity in 2014 was 9.5 cents/kWh, a 76% jump from 2007.

Those facts coupled with the pain of higher electricity bills has made many in the province much wiser about wind power; presumably a few of them were among the 500 randomly called.

Actually, the Nanos survey report did not in fact provide the reader with the percentage of callers reached who were electricity ratepayers.  That knowledge might perhaps have painted a more dismal picture for the wind proponents at CanWEA; people who pay electricity bills directly have a better understanding of how the electricity system works, and how utility-scale wind developments have driven up our bills.

The Executive Summary after touting the 65% approval rating for wind power goes on to state,   “Positive impressions are supported by the perception that wind is a strong energy source for environmentally friendly and safe electricity.”  [My emphasis]

Next: Part III of this examination of the Nanos Research report to CanWEA, where we examine the issues described that will drive the key narratives CanWEA will pursue in their efforts to convince Ontarians of the wonders and benefits of industrial wind turbines.

©Parker Gallant

January 2015

Ontario’s $12-million New Year’s Day hangover

House for sale in Detroit: not looking so bad. Might as well use the cheap Michigan power you're paying for anyway.
House for sale in Detroit: not looking so bad. Might as well use the cheap Michigan power you’re paying for anyway.

Happy New Year New York and Michigan!

Once again Ontario’s oh so generous ratepayers, ushered in the New Year by treating our neighbours to some very cheap electricity.  We were much nicer this January 1st than last year, as we exported a record 87,000 megawatt hours (MWh) at a bargain price.  That sale generated revenue of about $275,000 to offset a small part of the costs to Ontario’s ratepayers.  We exported 38,000 MWh more (+ 78%) than on January 1, 2014, and a year ago we generated $1,450,000 for the smaller number of MWh sold.

Wind was presumably a big factor in this year’s export sales as wind power developers also produced a record 58,800 MWh — power we didn’t need. That cost Ontario’s ratepayers of about $7.3 million, based on the estimated contract costs.  The cost falls to $7 million if we allocate the sales revenue from the exports just to wind, despite knowing other types of generation were included.

Back on January 1, 2014 wind generators produced only about 11,400 MWH so compared to 2014 wind power generation for January 1, 2015 increased by 47,400 MWh, or more than 400%.  Out of the 87,000 MWh exported, 62,000 MWh were sold to Michigan and New York for $4.41 per/MWh (not a weighted average) which accounts for the $275K of export revenue generated.

In total, January 1, 2015’s generation cost Ontario’s ratepayers $7 million (net) for wind, another $400,000 for curtailed wind, about $1.2 million for steamed off nuclear, almost $1 million for “embedded” wind and solar and about $3 million for the Net Revenue Requirement for those idling gas plants.

Put those all together and the New Year’s Day party left Ontario’s ratepayers with a $12.6 million hangover.

Happy New Year!

©Parker Gallant,

January 2, 2015

Ontario’s $16-million Christmas power giveaway

Ontario's energy policy: gifts for somebody---just not you
Ontario’s energy policy: gifts for somebody—just not you

Lumps of coal for everybody else…

Christmas was great day for Michigan and New York, courtesy of Santa Claus Ontario and wind power: Ontario exported 16.5 % (about 66,000 MWh) of our total demand for power on Christmas Day, and those two neighbours got $500,000 in cash along with the 56,000 MWh of power we gave them.  Power generated from wind energy was 36,000 MWh or 51% of total exports—if the curtailed wind production was included that would be 77% of the surplus power exported, so the wind power developers must be happy with their Christmas presents from Ontario, too.

In fact, Ontario’s electricity ratepayers picked up the cost of the cash payments to Michigan and New York, along with the actual cost of the production which was $7 million.  And, we paid about $2 million for “curtailed” wind (17,000 MWh), close to $3 million for “steamed off” nuclear (49,000 MWh) and more than $3 million to the gas plant generators for their “net revenue requirement” while the gas power plants idled.  That’s $16 million… and it doesn’t include the cost of Christmas Day “hydro spillage” as the Independent Electricity Systems Operator or IESO doesn’t report on it.

Total demand for power in Ontario Christmas Day was only 325,000 MWh, perhaps due to mild weather or maybe everyone barbecued their turkeys.  The hourly Ontario energy price (HOEP) value of the total demand of 390,000 MWh was negative (-$2,900,000) based on the average negative price of $7.45/MWh, but Ontario ratepayers still paid the $40 million needed to produce that power.

So our Premier and her chief Elf in the Energy portfolio, Bob Chiarelli, rewarded Ontario’s ratepayers with lumps of coal on Christmas day while doling out goodies to our neighbours!

©Parker Gallant

December 26, 2014

Contact Wind Concerns Ontario at 1-855-517-0446 or

windconcerns@gmail.com

Wind farm contracts add to Ontario electricity costs

Is that snow, or money blowing in the air in Ontario?
Is that snow, or money blowing in the air in Ontario?

Costly contracts from the OPA add to consumer bills

Are the agencies of the Ontario government doing all they can to contain electricity bill increases and costs of power generation in Ontario? The answer is “no,” and here’s why.

During the first six months of 2014, the Ontario demand for electricity, according to the Independent Electricity System Operator (IESO) monthly summary sheets, was 71 terawatts (TWh). Total demand was 79.1 TWh.   Looking at who generated the power shows that 40.3 Twh1 was generated by OPG (Ontario Power Generation); however ,they included 1.6 TWh generated by two jointly owned gas plants, Brighton and Portlands, making their actual production 38.7 TWh.  The balance of 40.4 TWh came from OPA-contracted generators and non-utility generators (NUG).  The OPA as of June 30, 2014 had contracts for 22,522 megawatts (MW) with 16,704 MW in operation and the balance under development.

Coincidentally, the OPG’s quarterly report for the six months ending June 30, 2014,  stated they had  16,931 MW operating, including their 50% of the two jointly owned gas plants.  Extracting the 565 MW from the two gas plants puts OPG’s claimed capacity at 13,366 MW.  As the two provincially owned entities had similar capacity, it is worth comparing them on generation and cost.  IESO doesn’t break out the specific generation or capacity provided by NUG-contracted parties, so we estimated NUG capacity at 1650 MW (from the Association of Power Producers of Ontario/APPrO) adding it to the OPA capacity for comparison purposes.

The results show OPG produced 48.9% of Total demand for the January/June period and the OPA/NUG combination produced 51.1%, despite the latter having 53% of total Ontario capacity versus the 47% held by OPG.  If one looks at Ontario demand (70.1 TWh), OPG produced 54.5% of all Ontario consumption.

Ontario exported more than 10% of total demand

In the six months ending June 30, 2014, Ontario exported 8.4 TWh or 10.6% of Total demand and generated revenue of $447 million for those export sales.  The “bare bones” cost of that production to Ontario’s ratepayers was: Global Adjustment (GA) + Hourly Ontario Energy Price (HOEP).  The cost to ratepayers in the six months for the exports was in excess of $275 million.  The latter dollar amount doesn’t include costs associated with: hydro spillage, wind power generation curtailment, paying for idling gas plants, meteorological stations, conservation spending, etc. which all find their way into the GA pot.

For the six months to June 30, 2014 the HOEP “weighted average” was $53.24 million per TWh.  The HOEP had not seen such lofty prices in the first six months of the year since 2005 when it actually equalled the average rate levied on Ontario’s ratepayers. Nine years ago HOEP reached 6.3 cents per kWh in the first six months, equal to the average charge to ratepayers.  Since then we have the GA to contend with; its “weighted average” for the first six months of 2014 was $32.65 per megawatt hour or 3.3 cents per kWh.  The last time we saw the GA lower was 2010 when the weighted average was $29.30 per MWh (2.9 cents/kWh) for the six months ended June 30, 2010 and it ended the year close to that amount.

Now the foregoing is not overly upsetting until you look at the total GA for the first six months of 2014 and apply it to the generation delivered by the three categories of OPG, OPA and NUG that find their way to the GA pot.  To wit: The total GA reported by IESO for the first six months of 2014 was $2,159 million and OPG’s share was 2 % or $42 million, the OPA’s costs were $1,774 million (82%) and NUG contracted parties represented the remaining $343 million or 16%.

Measurement of the GA generally reflects on individual costs of the generating components which feeds the claim that wind and solar costs are falling in relation to consumer based electricity costs which are rising. Consumers know those “commodity” costs increase every six months when updated by the Ontario Energy Board.

The following looks at those GA costs in a different light—by capacity rather than contracted rates or actual generation source!  Using the above dollar values indicates the GA costs to Ontario’s ratepayers per MW of capacity2 for the six months was:

For OPG: $42 million/16,366 MW                 = $   2,600

For OPA: $1,774,000,000/16,704 MW           =$106,000

For NUGNB:: $343,000,000/1,650 MW           =$208,000

(NB: The OPA renegotiated the NUG contracts following a directive of November 23, 2010 they received from Brad Duguid3 when he sat in the Energy Minister’s chair.)

Wind power contracts among costs to OPA

It is worth noting the Bruce Nuclear contracts are in the OPA totals which considerably lower than the overall OPA costs per MW of capacity.  The bulk of the costs related to the OPA are attributable to contracts with wind and solar developers, embedded and curtailed generation, conservation spending, the NRR (net revenue requirement) for idling gas plants, etc.

As a consumer in Ontario my view is IESO should be doing all they can to ensure OPG’s capacity is utilized to the greatest extent possible in order to contain rate increases.  Those rate increases appear to have been caused by the obvious difficulties the OPA had in negotiating generation that provides value for Ontario’s ratepayers perhaps because they simply do the bidding of the Liberal government’s energy minister regardless of the impact on consumers or the provincial economy!

Merry Christmas to all and please don’t forget to renew (or join) Wind Concerns Ontario so we can keep up the fight to bring sanity back to electricity planning in the Province.

©Parker Gallant

December 20, 2014

 

  1. OPG 2nd Quarter report 2014 on Page 2.
  2. Rounded to the nearest hundred dollars.
  3. The H.J.Heinz plant was one of the NUGs in Duguid’s directive but they left the province anyway.

 

Parker Gallant will be on leave for the holidays, returning in the New Year.

 

 

Ontario electricity price rise dwarfs oil price fall: 3000% rise in just 1 hour

A crystal ball might be more accurate
A crystal ball might be more accurate

Electricity Prices jump over 3,000 % in one hour

Recent events evolving at the Independent Electricity System Operator (IESO) should make anyone familiar with the Ontario electricity sector and IESO’s forecasting ability very nervous.

December 4, 2014, at hour 18, the HOEP (Hourly Ontario Energy Price) jumped to $986.76 (98.7 cents/kWh), and earlier that week, on December 2nd it jumped to $643.00 (64.3 cents/kWh) at hour 17 (5 PM).   IESO’s forecast for hour 18 on Dec. 4th was that the HOEP would be $65.00 (6.5 cents/kWh)—that forecast was way off.  The latter jump was caused because Hydro-Quebec had a transmission failure and sought to import electricity from Ontario; in that hour we supplied them with 1,242 MW with a value (if we got paid the HOEP market price) of $1.2 million.  Is this neighbours helping neighbours, or simply taking advantage of the circumstances?

But that wasn’t the case with the December 2nd jump: Ontario demand peaks much later in the day as a result of time-of-use (TOU) pricing which drops at 7 PM, but it sure does make one wonder why what is supposed to be an orderly trading market should exhibit such volatility.   Is it related to the intermittent nature of wind and solar, the fickleness of consumers, the 1,600 megawatts of imbedded wind and solar generation, intended or unintended market manipulation, or just bad forecasting?

Until recently, the only major source of energy traded/offered on the HOEP market was “unregulated” hydro produced by Ontario Power Generation, but that disappeared with the change in government regulation 53/05 (Payments under Section 78.1 of the Act).  So, with almost all of Ontario’s generation guaranteed specific pricing under long-term contracts, shouldn’t IESO have the capability to contain volatility in the HOEP?

For another example of market volatility, one can compare the value of electricity on March 1, 2014, 2013, 2012 and 2011.  Total demand including exports in megawatt hours (MWh) respectively was 448,852 MWh, 444,552 MWh, 450,648 MWh and 450,338 MWh.   The difference between the highest March 1st demand and the lowest was 1.2%, but the difference in what the HOEP market valued that production at was 982%.   The HOEP for March 1, 2014 valued that day’s total market demand at an average of $249.00/MWh (24.6 cents/kWh) but valued the somewhat higher total market demand of March 1, 2012 at only $23.00/MWh (2.3 cents/kWh).

Can the ratepayers of Ontario look forward to more of these strange pricing phenomena that appear with greater frequency, or will the Auditor General take a look to determine what is causing the sudden and potentially damaging inability of IESO to forecast demand and stabilize those price blips?  Ontario already has the highest electricity prices in Canada, forecast to head even higher.  In my opinion there is no need to speed up the process though bad forecasting.  The cost of power for just that hour 18 on December 4th, exceeded the average HOEP price for a 24-hour day in 2013, coming in at over $16 million versus an average of slightly over $10 million for a full 24 hours!

Oil prices drop by 40% and every news outlet covers it, but electricity prices in Ontario spike by over 3,000% in just one hour and no one notices.

©Parker Gallant,

December 10, 2014

 

Parker Gallant on Ontario electricity sector: you were warned

Auditor General Lysyk: Ontario ratepayers pay 3 times market price for electricity
Auditor General Lysyk: Ontario ratepayers pay 3 times market price for electricity

Auditor General report confirms: the “guru” was right

The Auditor General of Ontario’s report, released December 9, 2014, confirmed what many of us have been saying for years: the electricity sector in Ontario is a mess and the Liberals created it!  As this writer noted in an article, now four and a half years old, the Ontario Liberals were throwing ratepayer money around hoping some of it would actually create some value.   About that time then Minister of Energy, Brad Duguid, referred to me as a “self-appointed guru” on television program.   Well, sadly, the guru was right…about everything.

Perhaps I should ask for an apology, and here’s why:   I called the mess correctly, from the perspective of both  the energy portfolio to the mess in Infrastructure Ontario!  The latter, according to the AG report, is an $8-billion mess and the former a $50- billion dollar mess, including the $2 billion wasted on those not so smart, “smart meters.”  The following excerpt from the AG’s report verifies what I and several others have been saying:

“The total Global Adjustment charged to ratepay­ers has grown from $654 million in 2006 to $7.7 bil­lion in 2013, as shown in Figure 10. With more new contracted generators, especially of renewable energy, expected to begin producing energy at higher contract prices, the total Global Adjustment is expected to grow further, to $8.5 billion in 2014 and $9.4 billion in 2015. From 2006 to 2015, the 10-year cumulative actual and projected Global Adjustment is about $50 billion—an extra charge to ratepayers over and above the market price of elec­tricity.”

While deficit spending in Ontario was increasing our debt to as much as $325 billion (noted in the AG report) by 2017−18 the ruling Liberal government was also slamming ratepayers with additional billions, perhaps missing the obvious conclusion that ratepayers and taxpayers are one and the same!

The Christmas pudding delivered by the Wynne-led Liberal Government is full of lumps of coal!

©Parker Gallant,

December 9, 2014

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