The difference between Ontario’s previous Energy Minister, Bob Chiarelli and his replacement, Glenn Thibeault is now out in the open.
For those of you who may not remember how Bob Chiarelli responded to the Auditor General’s announcement about the cost of the Oakville gas plant scandal this excerpt from an article in the Toronto Sun of December 5, 2013 will refresh your memory: “The cancellation of a signed contract to build a gas plant in Oakville will cost hydro customers up to $2 a year, the Ontario Power Authority (OPA) says. ‘It’s less than a cup of Tim Hortons coffee,’ Energy Minister Bob Chiarelli said Thursday.”
Fast forward to October 21, 2016 and the press conference announcement from Premier Wynne about a deal to annually import 2 terawatts (TWh) of electricity from Quebec. Bob Chiarelli’s replacement Glenn Thibeault suddenly had to field questions about how this announcement will benefit Ontario ratepayers. In an interview on CFRA 580 with Kristy Cameron he was pressed to answer what it will do to reduce ratepayers’ bills. The Minister’s response was ponderously slow. He eventually said the result would be a savings of “somewhere about ten cents.” Cameron pressed him further and he finally confessed it was “ten cents overall”. Not monthly, not annually — just “overall”!
Despite the hoopla from Wynne’s announcement it appears the Ontario/Quebec agreement to import 2 TWh of electricity annually is simply an attempt to mask the mess the governing party has created.
The agreement may in fact raise the cost of electricity. The premier claims hydro imports from Quebec will replace gas-generated power which currently costs ratepayers substantially as we pay those generators $10-15,000 per MW per month to idle. When they are called on to produce power the cost is basically for fuel and that cost is approximately 2.5 cents/kWh. So, if we are paying Quebec the rumoured 6 cents a kWh ($60 million per TWh), those 2 TWh will result in Ontario ratepayers picking up a cost of about $70 million or $15 per electricity ratepayer annually.
That will quickly erase the “10 cents overall” benefit claimed by Energy Minister Thibeault. Too bad he didn’t come clean like his predecessor and simply say it will raise the price of electricity, and by how much, even if it was an (inaccurate) folksy analogy.
Not to be forgotten in the gas plant scandal is the fact that both the Mississauga (now Sarnia) and the Oakville (now Napanee) plants are scheduled to come on-stream over the next year, meaning we will have another 1,200 MW of gas generation idling. The annual cost to idle will be about $180 million.
We should brace ourselves. With the gas plants and the five wind power contracts announced earlier this year, there will be plenty more increases to Ontario’s electricity bills.