If I were Ontario’s new Minister of Energy …

 

One initiative: look at why an expensive expansion to hydro isn’t being used

On June 8, after the Ontario election, Ontario’s new premier – whoever that is – will be thinking of selecting a new Minister of Energy. With the challenges in that portfolio, the immediate question for anyone considering accepting the job would be, how can one fix the electricity side of the portfolio after the damage done over the previous 15 years by my predecessors?

Here are a few “fixes” I would take that to try to undo some of the bad decisions of the past, if I were the new energy minister.

Green Energy Act

Immediately start work on cancelling the Green Energy Act

Conservation

Knowing Ontario has a large surplus of generation we export for 10/15 per cent of its cost I would immediately cancel planned conservation spending. This would save ratepayers over $433 million annually.

Wind and solar contracts

I would immediately cancel any contracts that are outstanding, but haven’t been started and may be in the process of a challenge via either the Environmental Review Tribunal) or in the courts.                                 This would save ratepayers an estimated $200 million annually.

Wind turbine noise and environmental non-compliance

Work with the (new) MOECC Minister to insure they effect compliance by industrial wind developers both for exceeding noise level standards and operations during bird and bat migration periods. Failure to comply would elicit large fines. This would save ratepayers an estimated $200/400 million annually.

Change the “baseload” designation of generation for wind and solar developments

Both wind and solar generation is unreliable and intermittent, dependent on weather, and as such should not be granted “first to the grid rights”. They are backed up by gas or hydro generation with both paid for either spilling water or idling when the wind blows or the sun shines.

The cost is phenomenal.

As an example, wind turbines annually generate at approximately 30 per cent of rated capacity but 65 per cent of the time power generation comes at the wrong time of day and not needed.                                                                 The estimated annual ratepayer savings if wind generation was replaced by hydro would be $400 million and if replaced by gas, in excess of $600 million.

Charge a fee (tax) for out of phase/need generation for wind and solar

Should the foregoing “baseload” re-designation be impossible based on legal issues I would direct the IESO to institute a fee that would apply to wind and solar generation delivered during mid-peak and off-peak times. A higher fee would also apply when wind is curtailed and would suggest a fee of $10/per MWh delivered during off-peak and mid-peak hours and a $20/per MWh for curtailed generation.  The estimated annual revenue generated would be a minimum of $150 million

Increase LEAP contributions from LDCs to 1 per cent of distribution revenues

The OEB would be instructed to institute an increase in the LDC (local distribution companies) LEAP (low-income assistance program) from .12 per cent to 1 per cent and reduce the allowed ROI (return on investment) by the difference.  This would deliver an estimated $60/80 million annually reducing the revenue requirement for the OESP (Ontario electricity support program) currently funded by taxpayers.

Close unused OPG generation plants

OPG currently has two power plants that are only very, very, occasionally called on to generate electricity yet ratepayers pick up the costs for OMA (operations, maintenance and administration). One of these is the Thunder Bay, the former coal plant converted to high-end biomass with a capacity of 165 MW. It would produce power at a reported cost of $1.50/kWh (Auditor General’s report). The other unused plant is the Lennox oil/gas plant in Napanee/Bath with a capacity of 2,200 MW that is never used. The estimated annual savings from the closing of these two plants would be in the $200 million range.

Rejig time-of-use (TOU) pricing to allow opt-in or opt-out

TOU pricing is focused on flattening demand by reducing usage during “peak hours” without any consideration of households or businesses. Allow households and small businesses a choice to either agree to TOU pricing or the average price (currently 8.21 cents/kWh after the 17% Fair Hydro Act reduction) over a week.  This would benefit households with shift workers, seniors, people with disabilities utilizing equipment drawing power and small businesses and would likely increase demand and reduce surplus exports thereby reducing our costs associated with those exports.  The estimated annual savings could easily be in the range of $200/400 million annually.

Other initiatives

Niagara water rights

I would conduct an investigation into why our Niagara Beck plants have not increased generation since the $1.5 billion spent on “Big Becky” (150 MW capacity) which was touted to produce enough additional power to provide electricity to 160,000 homes or over 1.4 million MWh. Are we constrained by water rights with the U.S., or is it a lack of transmission capabilities to get the power to where demand resides?

MPAC’s wind turbine assessments

One of the previous Minister’s of Finance instructed MPAC (Municipal Property Assessment Corp,) to assess industrial wind turbines (IWT) at a maximum of $40,000 per MW of capacity despite their value of $1.5/2 million each.   I would request whomever is appointed by the new Premier to the Finance Ministry portfolio to recall those instructions and allow MPAC to reassess IWT at their current values over the terms of their contracts.  This would immediately benefit municipalities (via higher realty taxes) that originally had no ability to accept or reject IWT.

Do a quick addition of the numbers and you will see the benefit to the ratepayers of the province would amount to in excess of $2 billion dollars.

Coincidentally, that is approximately even more than the previous government provided via the Fair Hydro Act. Perhaps we didn’t need to push those costs off to the future for our children and grandchildren to pay!

Now that I have formulated a plan to reduce electricity costs by over $2 billion per annum I can relax, confident that I could indeed handle the portfolio handed to me by the new Premier of the province.

Parker Gallant

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15 thoughts on “If I were Ontario’s new Minister of Energy …”

  1. I would certainly vote for you. Any thoughts of running for the leadership of the PC party? I expect the position to be vacant shortly after June 7th.

    Liked by 1 person

  2. You would get our votes. Ruby and Joe Mekker, 14117 Con 1 – 2, Finch, ON K0C 1K0 613 448-2628

    On Wed, May 30, 2018 at 7:37 AM, Parker Gallant Energy Perspectives wrote:

    > parkergallantenergyperspectivesblog posted: ” On June 8, after the > Ontario election, Ontario’s new premier – whoever that is – will be > thinking of selecting a new Minister of Energy. With the challenges in that > portfolio, the immediate question for anyone considering accepting the job > woul” >

    Liked by 1 person

  3. I’ve been hoping that you would be one of the experts hired to manage the energy portfolio for Ontario, Parker. We need highly competent people to fix this mess.
    You realize that both affordable and safe energy is the highest imperative for a successful province.

    Your statement:
    “Wind turbine noise and environmental non-compliance
    Work with the (new) MOECC Minister to insure they effect compliance by industrial wind developers both for exceeding noise level standards and operations during bird and bat migration periods. Failure to comply would elicit large fines. This would save ratepayers an estimated $200/400 million annually.”

    -doesn’t go far enough for people whose homes have been surrounded by clusters of turbines and/or infrastructure such as substations. Turbines need to be turned off until the MOECC and MOH can prove beyond the shadow of doubt, that low frequency noise modulations and infrasound radiation are not harming nearby residents.

    Forced relocation is unacceptable. This government has betrayed the public trust.

    Carmen Krogh’s most recent study of people who have been forced to leave their homes in order to seek protection from turbines is about to be published. Professor Richard Mann’s ongoing work at the University of Waterloo, with reproduced infrasound radiation from a wind turbine, are issues that a new government will be facing immediately. Will ethics approval be granted to anyone to test human beings in his sound chamber?
    This reality is not going to disappear. Rightfully, costly legal action to address the injustices of non consenting residents being harmed by audible and inaudible noise will only increase if wind companies and the government are not forced to prove that these turbines are safe. Currently residents are being forced to prove they’re being harmed.
    This is about Ontario’s government becoming ethically rooted in sound energy policies.
    Betraying the public trust, especially for rural residents who have been forced to endure the disruption caused by industrial scale wind turbines too close to or in some cases surrounding their homes and neighbourhoods must end, if Ontario is going to recover from this nightmare.

    Liked by 1 person

      1. Here’s a statement from a U.S. Physician about the harm from wind turbine infrasound.
        “There is no question there are negative effects,” said Jay Tibbetts, a physician and member of the Brown County Board of Health. “Even if you don’t perceive any symptoms, it doesn’t mean you’re not affected. There are subtle changes that can take place in your body.”

        Liked by 1 person

  4. Lets take a closer look at your plan:

    Conservation. Save $443 million in conservation spending, but customers pay $1 billion more for electricity they would otherwise have saved. Sounds like a plan.

    Abrogate wind and solar contracts. You must like lawyers, to propose giving them twenty years of lucrative work, suing the government successfully for breach of contract. Thus, we could save $200 million but spend almost that much in legal fees and judgments, without even getting the power. Even as a lawyer, I’m not sure I like that much. Weren’t you critical of the $1 billion waste on the gas plants. How is this different? Oh yeah. It’s a lot more money.

    Wind compliance. I can’t complain about require wind generators to comply with the law. I would be interested in seeing how you calculate that saves us $200/400 million.

    Baseload designation. OK, let’s recast wind and solar as no longer baseload. Nuclear as well, of course. Renewables you can’t turn on. Nuclear you can’t turn off. Almost all of our surplus baseload generation arises because we can’t turn nuclear off at night when we don’t need it. Any by the way, where is this extra hydroelectric you’re talking about. Do you know of some dams I don’t know about? Or maybe we should build some?

    A fee for generation that’s not needed. Good idea. The biggest payers, of course, would be OPG and Bruce Power, for their nuclear.

    LEAP/ROE. You won’t get an argument from me there. ROE is too high, and if reducing it allows us more money to help those in energy poverty, that’s a good thing.

    Close OPG plants. This is another one where I don’t see where you get your savings calculation. As well, on Thunder Bay I would be interested in knowing your plan to deal with the local economic impacts of suddenly not needing all of that locally-produced biomass.

    TOU Opt-in. This is a real head-scratcher. The point of TOU rates is to reduce the need for peak generation by make peak power more expensive than off-peak power. If you allow those who would otherwise shift their load to leave it at peak, you need more expensive peak generation. The cost of this could easily be more than a billion dollars a year.

    Niagara Water Rights. The problem with Niagara generation is neither water rights nor transmission constraints. You can divert more of the water that would otherwise go over the falls, but that is at the expense of the tourism industry in Niagara Falls. The current usage is designed to strike a balance between tourism and electricity. Perhaps you don’t care for Niagara tourism?

    Windpower MPAC Assessments. Another lawsuit in waiting.

    I’m not sure I see where your plan helps anyone. Maybe I missed something.

    Liked by 1 person

    1. OK Jay let’s look at what you took from my writing!

      “Conservation. Save $443 million in conservation spending, but customers pay $1 billion more for electricity they would otherwise have saved. Sounds like a plan.”

      In 2004 IESO reported we consumed 153.4 TWh whereas in 2017 they say we consumed 132.1 a reduction of 21.3 TWh or more than twice as much as wind and solar generated in 2017. The reduction occurred despite our population increasing from 12.4 million in 2004 to 14.5 million in 2017. On a per capita basis that represents a 25.5% decline. Not getting your math on the “$1 billion more” they would otherwise save by spending $443 million annually.

      “Abrogate wind and solar contracts. You must like lawyers, to propose giving them twenty years of lucrative work, suing the government successfully for breach of contract. Thus, we could save $200 million but spend almost that much in legal fees and judgments, without even getting the power. Even as a lawyer, I’m not sure I like that much. Weren’t you critical of the $1 billion waste on the gas plants. How is this different? Oh yeah. It’s a lot more money.”

      What I suggest is cancel the contracts that haven’t broken ground which are approximately 500 MW which at 30% would generate about 1.3 TWh for which we would be paying approximate $170 million not including curtailed wind or transmission costs to hook them up. That makes up the $200 milliion.

      “Wind compliance. I can’t complain about require wind generators to comply with the law. I would be interested in seeing how you calculate that saves us $200/400 million.”

      The MOECC has received thousands of nose complaints (audible and inaudible) and has reacted/investigated only about 1% of them. On the inaudible (infrasound) issue they don’t have the equipment to measure them but it is those that cause the health problems. Similar to seasickness about 15% of the population is affected but the ministry is unable to determine or measure those infrasound levels. The ministry also doesn’t impose restriction on industrial wind developments during migratory season so kill rates on birds and bats go unreported and unpenalized. As an example, when kill rates were recorded (and publicized) for Wolfe Island a few years ago they had the 2nd highest kill rate of any wind development in Canada or the US. My estimate comes from combining the two issues and suggesting that they would represent 20% of annual generation of IWT or about 2 TWh.

      “Baseload designation. OK, let’s recast wind and solar as no longer baseload. Nuclear as well, of course. Renewables you can’t turn on. Nuclear you can’t turn off. Almost all of our surplus baseload generation arises because we can’t turn nuclear off at night when we don’t need it. Any by the way, where is this extra hydroelectric you’re talking about. Do you know of some dams I don’t know about? Or maybe we should build some?”

      Maybe you can’t turn off nuclear but Bruce has two units where they bypass generation (often because wind generation suddenly increases) and I suspect the refurbished Darlington units will have the same capability so that makes your argument wimpy. We do obviously need baseload with a minimum load that usually is about 13,000 MW and nuclear was always meant to be designated as such along with some hydro. On the latter, ratepayers picked up the cost of Big Becky ($1.5 billion) and Mattagami ($2.6 billion). That $4.1 billion expenditure doesn’t show up on IESO’s reports in a positive light. In 2004 hydro produced 37.6 TWh and in 2017 after the big spend, hydro produced 37.7 TWh and OPG alone spilled 6 TWh or enough to power over 650,000 average households for a year. That 6 TWh was 50% of what wind and solar generated in 2017.

      “A fee for generation that’s not needed. Good idea. The biggest payers, of course, would be OPG and Bruce Power, for their nuclear.”

      OPG and Bruce wouldn’t produce unneeded power if we had no wind or solar.

      “LEAP/ROE. You won’t get an argument from me there. ROE is too high, and if reducing it allows us more money to help those in energy poverty, that’s a good thing.”

      Wow, one out of eleven!

      “Close OPG plants. This is another one where I don’t see where you get your savings calculation. As well, on Thunder Bay I would be interested in knowing your plan to deal with the local economic impacts of suddenly not needing all of that locally-produced biomass.”

      The monthly cost to maintain Lennox is $7/8 million per month or about $100 million annually and I suspect Thunder Bay is slightly less but those woodchips they use are imported (not produced locally) and very high end. (The AG’s report said power produced at TB would cost $1.50/kWh). I recall reading staffing levels at TB was 55 people so I would estimate their annual OMA costs would be in the same general range as Lennox.

      “TOU Opt-in. This is a real head-scratcher. The point of TOU rates is to reduce the need for peak generation by make peak power more expensive than off-peak power. If you allow those who would otherwise shift their load to leave it at peak, you need more expensive peak generation. The cost of this could easily be more than a billion dollars a year.”

      I suspect you realize that many employed people are shift workers and home during the day and many seniors living on fixed incomes are also home during peak hours and some even need medical equipment using electricity for ailments during those hours. Allowing them to opt in for the average of TOU rates would not suddenly drive up demand by much and with the surplus we have it could be easily supplied by hydro and perhaps reduce the exports we sell for considerably less than there cost. It could turn out to be a benefit to the overall costs of the system.

      “Niagara Water Rights. The problem with Niagara generation is neither water rights nor transmission constraints. You can divert more of the water that would otherwise go over the falls, but that is at the expense of the tourism industry in Niagara Falls. The current usage is designed to strike a balance between tourism and electricity. Perhaps you don’t care for Niagara tourism?”

      We are not utilizing our water rights. It has nothing to do with the lack of water for tourism. We receive a fee from NY for their utilization of our water for electricity generation. I would also suggest the grid that could transmit that power to the GTA is also constricted due to the high amount of industrial wind development along its route which means the grid must be available for when the wind suddenly starts to blow.

      “Windpower MPAC Assessments. Another lawsuit in waiting.

      Not sure why you suggest that as it was Dwight Duncan, when Minister of Finance who instructed MPAC. I somehow doubt it is part of the 20-year contracts the OPA signed.

      “I’m not sure I see where your plan helps anyone. Maybe I missed something.”

      Jay I hope my responses have clarified things for you.

      Liked by 1 person

  5. Comment from: Ruby
    “Hi Parker,
    I would seriously like the MOECC to look into the cause of Lake K2 and its long term affects on the aquifer. Water is an essential for life. Also look into the contaminated wells. Both of these have no financial return but more importantly they impact on life.
    I would also like to see the government pass legislation that would ensure no government could ever again pass a bill like the Green Energy Act which took so many rights away from the people and gave them to multi national corporations.|

    Liked by 1 person

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