October, another month with climbing electricity costs

IESO just released their October 2019 Monthly Market Report and it contained more bad news for taxpayers and ratepayers in the province.  The all-in cost to Class B ratepayers, without inclusion of delivery and regulatory charges, produced a “weighted average” cost of $144.05/MWh or 14.41 cents/kWh for the “Electricity” line on your bill. The HOEP was $7.25MWh and the GA $136.80/MWh.

Consumption by Ontario ratepayers dropped by 366 GWh (gigawatt hours) or 3.2% compared to October 2018 but the cost per kWh jumped 1.03 cents/kWh (up 4.7%). Net Exports, compared to October 2018 were almost flat and totaled 1,405 GWh versus 1,381 GWh!  Our net exports in 2019 however cost us quite a bit more as the HOEP price was 7.25/MWh versus $13.84/MWh in 2018 and the cost to Ontario Class B ratepayers, reflected in the GA, came in at $136.80/MWh in 2019 versus $120.59/MWh in 2018.  The differences added about $26 million to the monthly costs raising our losses on net exports to $192.3 million in October 2019 versus $$166.5 million a year ago.

As if the foregoing wasn’t enough, wind generation, from both TX (transmission connected) and DX (distributor connected) sources and its curtailment for the month totaled 1,457 GWh as reported by my friend Scott Luft.  That means it was slightly more than our net exports.  At a price of $135/MWh for accepted generation and $120/MWh for curtailed generation the bill to ratepayers was $189.6 million and the dollar amount is very close to what we lost on our exports.  Ontario’s ratepayers were forced to accept those costs which for October generated an average of $192/MWh or 19.2 cents kWh. If one were to include costs for spilled hydro, steamed off nuclear along with gas plant backup, industrial wind generation costs would be even higher.

Now what was somewhat surprising for the month was not so much, the amount of the total GA of $1,209.6 million (it appears to be the 3rd highest since the GA was created) but the amount moved to the Variance Account (Ontario Fair Hydro Plan).  The amount moved to the Variance Account was only $159.1 and the lowest so far in 2019.  In September the GA was $1,082.9 million but IESO moved $493.2 million to the Variance Account.

There appears to be something amiss in the data used by IESO when executing the transfer to the Variance Account and it would be useful if they disclosed exactly where and how they messed up.

Transparency is something Ontario ratepayers and taxpayers should expect!

Author: parkergallantenergyperspectivesblog

Retired international banker.

2 thoughts on “October, another month with climbing electricity costs”

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