Back in mid-November 2020 Michigan Governor, Gretchen Whitmer announced her plan to shut down Line 5 by revoking and ending a 1953 easement that allows Enbridge Energy to run a dual pipeline through the Straits of Mackinac. Revoking that easement would mean thousands of job losses in Michigan, Ohio and Ontario and raise the price of gasoline, jet fuel and propane for citizens in those locations and elsewhere. In the case of propane many rural areas in those three locations as well as Quebec are dependent on it as a source of heat during the winter.
The fightback from Ohio, various companies and unions and of course Enbridge has been significant however from the perspective of Canada’s Justin Trudeau’s government it has been “wimpy”! Pushback from Ontario has been what most would perceive as benign! Minister of Energy, Northern Development and Mines, Greg Rickford simply claimed he was “profoundly disappointed”!
What Minister Rickford should have done is to tell Governor Whitmer he would use his responsibility for the Ontario electricity sector to push back and advise Governor Whitmer that he would order IESO to shutdown the intertie line with Michigan. That action would cut them off from receiving our emission free, and very cheap electricity which they enjoy buying at subsidized prices.
Thanks to my friend Scott Luft, one is able to look back to 2008 on his data (extracted from IESO) and see how much cheap surplus power we have exported and what we received in payment for it.
It should first be understood Ontario’s gas plants (and coal plants when they operated) are only called on to generate power when demand cannot be met by our cadre of nuclear, hydro and renewables (wind and solar) so surplus energy is almost always caused because demand is low but the wind is blowing and/or the sun is shining. What that infers is most of Ontario’s exported and surplus power is considered almost emissions free! Alerted to the above; if one reviews Scott Luft’s chart it is easy to calculate information Minister Rickford could use in a chat with Governor Witmer or our Prime Minister.
He would note Ontario exported 186.6 TWh over the ten years from 2011 to 2020 and further examination would allow him to determine Michigan received approximately 50% and New York (approximately 35%). Adding the revenue generated he would note total revenue on those sales was $4.8 billion indicating Ontario sold each kWh for 2.57 cents. Going further he would see during the same timeframe IWT generated 93.7 TWh, solar 25.8 TWh and additionally Ontarian’s were obliged to pay the cost of curtailed wind, spilled hydro and steamed-off nuclear which totaled 49.4 TWh meaning ratepayers picked up the costs. If one adds the three together, they come to 168.9 TWh which is more than we would consume in a year (in 2020 we consumed 132.2 TWh) and is very close to what we exported to our neighbours with Michigan getting about 93 TWh at a cost to them of just under $2.3 billion whereas those same 93 TWh cost Ontarians approximately $15.5 billion.
What the foregoing implies is Ontario ratepayers subsidized our electricity exports to Michigan to the tune of $12.2 billion in contravention of the USMCA Trade Agreement which clearly states:
“To not use export subsidies or World Trade Organization (WTO) special agricultural safeguards for products exported to each other’s market.”
For some reason I suspect the State of Michigan will not raise this issue with the Biden Administration as they are quite happy to take our clean subsidized electricity and avoid having to fire up their numerous coal plants to obtain what amounts to approximately 10% of their annual consumption.
In the event Minister Rickford doesn’t want to shut down the “intertie” lines (recently upgraded) that delivers cheap power to Michigan he should at the very least demand Michigan issue Ontario “carbon credits” that are salable or can be applied to offset other emissions in the province!
Hopefully Minister Rickford will recognize the costs of our electricity exports to Michigan and how they negatively affect Ontario’s ratepayers and taxpayers and will run with the foregoing suggestions to ensure Line 5 is not cancelled by Governor Whitmer!