Where did our $50 billion go? Or, how Ontario citizens lost $18 mil in just 2 days

Premier Wynne making her announcement: no accounting for costs [Photo: PostMedia]
Almost a week after Premier Wynne announced her plan to reduce our electricity bills by 25%, the wind was blowing!  On March 8, six days after the cost shifting  announcement (from ratepayer to taxpayer), potential power generation from wind was forecast by IESO to produce at levels of 80/95% of their capacity, for many hours of the day.  IESO was concerned about grid stability and as a consequence, curtailed much of the forecasted generation.

When the Premier made her announcement about reducing hydro bills, she also claimed “Decades of under-investment in the electricity system by governments of all stripes resulted in the need to invest more than $50 billion in generation, transmission and distribution assets to ensure the system is clean and reliable.”

It is worth noting that much of that $50 billion was spent acquiring wind and solar generation and its associated spending on transmission, plus gas plants (to back them up because the power is intermittent), and distribution assets to hook them into the grid or embed them with the local distribution companies. It would have been informative if Premier Wynne had had Energy Minister Glen Thibeault provide an accounting of exactly what the $50 billion was spent on.

As it turned out the amount of curtailed wind generated on March 8 was 37,044 megawatt hours (MWh) was just short of the record of 38,018 MWh set almost a year ago on March 16, 2016 (estimated by my friend Scott Luft).  The curtailed wind on March 8, 2017 cost Ontario’s ratepayers $120/MWh or $4,445,280.

The cost on March 16, 2016 was $4,562,160.

What does it mean? Curtailing or restricting power output but paying for it anyway means a portion of the $50 billion spent was simply wasted money. It went to the corporate power developers that rushed to sign those above-market contracts for renewable power.

The other interesting aspect of the surplus power generation on March 16, 2016 and March 8, 2017 is revealed in IESO’s Daily Market Summaries: the hourly Ontario energy price (HOEP)  March 16, 2016 was negative at -$1.25/MWh and on March 8th, 2017 was also negative at -.49 cents/MWh. This meant ratepayers paid for surplus exports sold to our neighbours in New York and Michigan, etc. Net exports (exports minus imports) on March 16, 2016 were 52,368 MWh, and on March 8, 2017 were 37,944 MWh. Total costs of their generation (HOEP + GA) fell to Ontario’s ratepayers along with the cost of any spilled hydro, steamed off nuclear and idling gas plants.

Millions here, millions there = a whole lot of wasted money

So, bear with me here, if we price the cost of the net exports at $110/MWh for those two days, ratepayer costs were approximately $9.8 million with $5.7 million for March 16, 2016 net exports and $4.1 million for March 8, 2017 net exports, not including the $84,000 we paid our neighbours to take our power.

How much did it cost you? Two days out of 729 (2016 was a leap year) cost Ontario ratepayers about $18.1 million for power not delivered (curtailed wind) or needed (net exports).

I hope this helps Minister Thibeault in his calculations for a long overdue accounting to Ontario citizens as to where the other $49.982 billion went.


Author: parkergallantenergyperspectivesblog

Retired international banker.

15 thoughts on “Where did our $50 billion go? Or, how Ontario citizens lost $18 mil in just 2 days”

    1. I thought we didn’t have enough hydro but it seems we do and with this, we have to pay the States money to take our excess hydro.Does anybody but me sees there is something wrong here with this situation and they want us to sell our Hydro out from under us through private investors


  1. Keep in mind that whenever the curtailment happens for people who are experiencing harm because they were/are being forced to live near these turbines, against their will and without having given consent to this incursion on their homes, these periods of curtailment are an enormous relief. They feel they have the safety, security and pleasure of their homes back again.
    Parker, thank you for this information.
    Is this why intelligent investors are now referring to industrial scale wind investments as ‘stranded assets’ and ‘stranded debt’?

    Liked by 1 person

  2. You have some great math; can you please educate us all with an actual comparison so we can compare apples to apples? Show us the cost of electricity from a wind turbine to a hydro dam to a solar panel to a gas plant and a nuclear plant. Include cost of engineering and project development and equipment costs with your cost per kWh. I’ve never seen any politician or media or blogger do that, it’s almost as if they all think the equipment itself is free lol!!! If u need help let me know. It’s fine if you are opposed to wind but it would be better to compare against the other options. For gas u can use the $1.2 million per installed MW capacity. For solar it would help to have numbers for FIT 1 and for FIT 4 so readers can understand the reasons for the relevant FIT rates.


    1. Robert, I wish it was that easy. There are numerous solar panel manufacturers, blade types, industrial wind turbine manufacturers, gas plant types (simple cycle & combined cycle are two), off-shore wind, on-shore wind, nacelle heights, etc. all of which have different costs and capabilities of generating electricity. Solar depends on sunshine (better south of the 40th parrallel) which is not so good in Vancouver, Seattle, etc. so there is no easy comparison. Wind generation depends on wind which is non-existent in Ontario on hot summer days. Did you know NextEra who own Florida Light and Power have no wind turbines operating in Florida but have lots in Ontario spinning away (maybe our generaous contracts had something to do with their interest). The US EIA compare Levelized Cost and Levelized Avoided Cost of New Generation Resources here: https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf but it only tells you the capital costs per kWh or MWh. If there is little wind blowing or the sun isn’t shining they won’t produce power, cheap or expensive. Just as you need water flow and drop for hydro and some flows are better than others the same thing applies for other “nature dependent” generation. Gas, nuclear, diesel, coal generation are dependent on the longevity of the equipment and of course the cost of the fuel input (which can fluctuate wildly) but gas, diesel and coal can generate emissions so perhaps the price of emissions should be included! The obvious thing that is emerging around the world is that wind and solar need back-up (as much as 90%) and for that reason are cost prohibitive and why many jurisdictions are backing away from them. Hope this provides some food for thought!


    2. Robert, a cost by cost comparison rather misses the point if the system you’re talking about a) is weather dependent and thus unreliable, b) is produced out of sync with demand, c) is supply-availability driven rather than demand-driven and d) needs an entirely compensatory fuel system to be constantly available to back it up.
      The reality is that we are not talking wind vs alternatives (either/or) but wind-gas systems (both/and).
      So if you have to build a gas system to compensate for the vagaries of wind (and solar), it seems superfluous to build a renewable system that is either curtailed or dumped on the market at a loss (from our pocketbooks).
      For further review please read Tom Adams commentary on this at:


  3. Maybe we need Trump to negotiate our power contracts instead of an inept bunch of liberal political fools. Lock them all up


  4. Sure, there are costs associated with the production of hydro…..however that’s not the problem. It’s contractors using substandard parts used in the construction of nuclear generating plants. As a private corporation those are some of the hard costs associated with production of energy. However as a publicly owned utility these costs are accounted for in the hundreds of millions of dollars paid into the utility monthly. Most people tend to forget that Niagara falls has been in operation form almost a century and a half……. amassing huge profits. We have veared away from one time hard costs to recurring costs, wind and solar that have relatively short life expectations. If places like Niagara Falls is paid for by now than who and where did all the money go.


  5. from OntGov Backgrounder … “In the early years, a portion of the costs covered by the GA would be refinanced to reduce pressure on today’s electricity ratepayers. In later years, the cost of refinancing would be recovered from ratepayers. Under current forecasts, the immediate reduction in the GA would be about $2.5 billion per year on average over the first 10 years, with annual interest costs not exceeding $1.4 billion.”https://news.ontario.ca/…/refinancing-the-global…


  6. Debt retirement charge was never retired….. it was just put over onto the backs of businesses and agricultural…. cause that’s FAIR ….. some folks think the debt retirement charge is gone because on your Hydro one bill there is a line that claims you SAVED x $$$ on the debt retirement charge…. again the fraudsters at Hydro One do not physically take the amount off you bill….. similar to the latest hydro one fraud of the rural remote rebate program…. they claim you save $60.50 in delivery….. event tho $60.50 – $50.00 is $10.50 credit the bill still shows the customer paying $50.00 for delivery…. must be Ole Katty Wynnde liberal magic math hard at work folks….


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