Ontario’s ratepayers eat $50 million extra costs for Victoria Day Weekend

As the expression goes; “the hits just keep on coming” and the three days of the Victoria Day weekend did that!  Ratepayers, as is typical in the spring, don’t consume as many kilowatt hours (kWh) daily as they do in the cold winter months or the hot summer days so they just got hit big-time!  The past weekend demonstrated the foregoing in spades, no doubt partially due to the Covid-19 pandemic, but mainly due to renewable energy generation and its required back-up support.

Gathering the information disclosing the $50 million cost for the three days was made easy as my friend Scott Luft sent me an easy to read chart disclosing: generation by source, the estimated cost of the generation and generation steamed-off, spilled or curtailed.  The chart also had the HOEP (Hourly Ontario Energy Price) or “market price” at the time of delivery and total exports over the three days.  Scott also estimated and included DX (distributor connected) generation (mainly solar and wind) and he is always very close to the actual generation delivered when that data is finally available.

It turns out total generation from all sources was 884,000 MWh (estimated) net of the 266,210 MWh (24.4% of grid accepted generation) exported. What that reflects is; average daily consumption was 294,668 MWh or about 10% below prior years.  The 1,090,210 MWh (884,000 MWh + 266,210 MWh) generated and delivered to the TX (transmission connected) and DX grids cost $126,773,990. or $147/MWh including costs of the exports we gave away for a negative value of -$11/MWh.

It is worth pointing out, the HOEP value for the 1,090,210 MWh accepted over those three days was $1,271,203 meaning market value was $1.16/MWh* compared to $147/MWh it cost ratepayers.

That should give those who manage our electricity system and our politicians something to ponder as it suggests the mess our electricity system is in.

The $147/MWh cost of generation over the three days means the total loss for the 266,210 MWh exported was $42,061,180 of the $127 million total cost!  Without the supply of surplus power and the cost to pay our neighbours to take them, our per MWh cost would have been $96/MWh (9.6 cents/kWh).  That would be less than the 10.1 cents/kWh we are charged for off-peak consumption.

So, the above raises the question why did we need to export 24.4% of accepted generation. Well, a small portion of it was due to a decrease in consumption (the pandemic perhaps) but the principal reason is we are obliged to accept wind and solar generation and pay for its curtailment.  At the same time, we also pay for steamed-off nuclear and spilled hydro caused by excess wind and solar generation.

The data from Scott disclosed the 884,000 MWh consumed by Ontarians over the three days could have been easily supplied by nuclear (688,535 MWh) and hydro (267,057 MWh) still leaving almost 72,000 MWh available to export.  On top of that over the three days we also paid for steamed-off nuclear (3,473 MWh) and spilled hydro (96,078 MWh).  While those two wastes also cost us money it wasn’t as much as the 59,119 MWh of curtailed wind whose cost was north of $7 million.

It’s past the time the ruling Premier Ford led government did something to stop the bleeding.  Either cancel the industrial wind and solar contracts or tax them for delivering power to the grid when it’s not needed which is the bulk of the time.

Ontario’s ratepayers are fed up with the burden placed on them by the Green Energy Act!

*The average household in Ontario consumes 9 MWh annually so if we could have purchased those 9 MWh last weekend it would have cost $10.44 for our annual electricity consumption.

Author: parkergallantenergyperspectivesblog

Retired international banker.

4 thoughts on “Ontario’s ratepayers eat $50 million extra costs for Victoria Day Weekend”

  1. Hello Parker
    Cancel the wind and solar components outright. Let the lawyers tie up litigation for years. It’s got to be cheaper than what we’re paying now.
    Myron Humeniuk


  2. How can anyone possibly justify wasteful spending like this when Ontario is in this financial mess due to the broad based lockdown?


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