The Canadian Version of “Dumb & Dumber”

Having just read the press release from the Canada Infrastructure Bank (CIB) on how they are partnering up with ITC Investment Holdings Inc., and using $655 million of our tax dollars to build a 117 kilometre underwater transmission line connecting Ontario with the PJM Interconnection, the 1994 movie, “Dumb & Dumber” immediately came to mind.

ITC is a Michigan based company (subsidiary of Fortis Inc.) and they will own 60% of the project with the balance owned by the CIB.  As a bit of an oxy-moron Michigan Governor, Gretchen Whitmer, is planning to shut down the Line 5 pipeline which supplies oil to Ontario refineries (includes aircraft fuel, etc.), chemical plants etc. in Sarnia, and where propane is produced and supplies Ontario and Quebec farms and households. Line 5 also supplies refineries in the US and homes and farms in Michigan with propane.  Interestingly enough, Line 5’s entry into Michigan is also underwater and is the reason Gov. Witmer wants it closed. What this implies is if Whitmer is successful, it will cause job losses in Ontario while our tax dollars will create jobs in Michigan.  That suggests those in Canada making the decision on this project are “dumb”!

The time estimate to complete the Lake Erie underwater PJM connection is 4 years which would mean it should be operative in 2025,  That year happens to be the same year the Pickering nuclear plants will be taken out of service. Those plants currently provide 2,500 MW of capacity and generally run at their maximum so closure will remove 2,500 MWh (megawatt hours) of supply to Ontario’s ratepayers almost every hour of the day.  Additionally, Ontario’s grid operator, IESO, forecasts the closure will create a supply deficit in the summer months when Ontario demand peaks. One wonders if IESO were consulted or involved in the discussions leading to the CIB jumping on board and if not then it adds “dumber” to the announcement.

The “Endorsements” contained in the CIB press release serve to make the reflections of those quoted look “dumb and dumber”.  Here are a couple of their quotes with some observations! 

First, we will start with Ehren Cory, CEO, Canada Infrastructure Bank who stated: “This project will allow Ontario to export its clean, non-emitting power to one of the largest power markets in the world and, as a result, benefit Canadians economically while also significantly contributing to greenhouse gas emissions reductions in the PJM market. The project allows Ontario to better manage peak capacity and meet future reliability needs in a more sustainable way. This is a true win-win for both Canada and the U.S., both economically and environmentally.”

Had Mr. Cory actually done some research with IESO he may have learned Ontario will be facing a shortfall from the time Pickering Nuclear is closed in 2025 until new reliable power is added, meaning Ontario will not have any of “its clean, non-emitting power” available to export.  How then could it contribute to any “greenhouse gas emissions reductions”? Dumb?

Second, here is what Greg Rickford, Minister of Energy, Northern Development and Mines, Minister of Indigenous Affairs had to say: The Lake Erie Connector demonstrates the advantages of public-private partnerships to develop critical infrastructure that delivers greater value to Ontarians. Connecting Ontario’s electricity grid to the PJM electricity market will bring significant, tangible benefits to our province. This new connection will create high-quality jobs, improve system flexibility, and allow Ontario to export more excess electricity to promote cost-savings for Ontario’s electricity consumers.”

Three years into the portfolio and from the basis of his comments he has still more to learn! Similar to Mr. Cory above it appears Minister Rickford also didn’t speak with anyone at IESO as he suggests the $655 million in Federal tax dollars used to build the Lake Erie underwater transmission line will “allow Ontario to export more excess electricity to promote cost-savings for Ontario’s electricity consumers “.  Had he spoken to IESO they would have perhaps explained we will be potentially facing an energy shortage once the Pickering Nuclear plants are closed. What that infers is we will not have “more excess electricity” to export! Dumb?

Third, this is what Catherine McKenna, Minister of Infrastructure and Communities apparently said: With the US pledging to achieve a carbon-free electrical grid by 2035, Canada has an opportunity to export clean power, helping to reduce emissions, maximizing clean power use and making electricity more affordable for Canadians. The Lake Erie Connector is a perfect example of that. The Canada Infrastructure Bank’s investment will give Ontario direct access to North America’s largest electricity market – 13 states and D.C. This is part of our infrastructure plan to create jobs across the country, tackle climate change, and increase Canada’s competitiveness in the clean economy.”

As one will note Minister McKenna, also famous for attending an illegal cock fight and eating dog pretty well maximizes the fallacies of the prior two quotes illustrated above and expands on them.  Once again, a call to IESO or perhaps a chat with Minister Rickford should have disclosed in 2025 when this project may be complete it would have spelled the end of “an opportunity to export clean power, helping to reduce emissions, maximizing clean power use and making electricity more affordable for Canadians.“  It will do none of those things!  If this is part of their “infrastructure plan to create jobs across the country, tackle climate change, and increase Canada’s competitiveness in the clean economy“ we are in big trouble!

Throwing our tax dollars at a plan that cannot be justified in any way is a total disservice to all Canadians or to summarize, this is both “dumb and dumber” than perhaps anything we have seen before aimed at wasting our taxes.

To paraphrase Mr. Corey; this a true economic loss for Canada and our taxpayers.

Author: parkergallantenergyperspectivesblog

Retired international banker.

11 thoughts on “The Canadian Version of “Dumb & Dumber””

  1. Pickering is actually ~3,100MW (6 units), so it is worse than that. Today, one unit at Pickering was producing double the power of Ontario’s entire 5,000MW wind fleet. The summer is when it is least windy and when Pickering’s output is most valuable. You are quite right, we’ll be exporting nothing but shoulder season wind at a loss while wallowing in gas in the summer months trying to make up for the loss of Pickering, the 4 B units never having received their mid-life refurbishment, which would allow them to operate through to the 2060’s like Bruce.

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    1. G8 has been down for a while so why I put it at 2,500 MW. This is from IESO’s Planning outlook: “Pickering Nuclear Generating Station (NGS) is expected to retire
      in the mid-2020s, reducing Ontario’s installed nuclear capacity by 3.1 GW. With the two Pickering A units scheduled to go out of service at the end of 2022, and the remaining four units at Pickering B following in 2024, the Pickering NGS retirement is a major contributor to upcoming resource needs. If approved, a proposal by Ontario Power Generation would see Pickering NGS units continuing

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      1. Ahhh, OK. I expect 8 will be back before summer. Unit 5 recently hit 560MW for a bit, they’ve been playing around with run-ups of both it and 7, both of which punch well above their registered weight class when allowed to. I would fully expect official uprates like at Bruce if the B units were refurbished. And yes, the IESO announcement mirrors my take, which is OPG planning on meeting that 3,100MW deficit with all the gas capacity they just bought. As you note, that doesn’t leave clean energy to export.

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  2. Why would the Canadian Infrastructure Bank’s loans be needed to fund an underwater transmission line at all? If this were entirely a private sector investment operating under free market conditions, I would have thought it would be able to obtain commercial financing and not need taxpayers’s assistance. Electricity transmission lines within Ontario are of course built by government owned, operated, controlled and regulated utilities and they are subject to rate regulation that largely removes them from most financial risks and assures them of a guaranteed rate of return. I am not sure why this type of project, if it were needed for Ontario, would not have proceeded on the same basis. Perhaps someone could enlighten me.

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  3. The Lake Erie Connector has been an idea bouncing around for more than 20 years. The first CEO of Hydro One after the restructuring of Ontario Hydro, Elinor Clitheroe, pushed the idea.

    Loop flows on the transmission systems around both sides of Lake Erie are very complicated and often problematic for the control areas on both sides. The LEC will be a bi-directional DC connector, making it very controllable and secure for both sides.

    Whether Ontario is in a surplus or deficit supply situation, the LEC can provide value. After Pickering is retired, there will still be a lot of power moving back and forth with our neighbours.

    I don’t like the whole idea of the CIB, but this is the LEC is not the worst thing they could be fussing with. The fact that Jack Gibbons of the Ontario Clean Air Alliance hates it is just gravy.

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    1. The PJM interconnected states generate about 60% of hourly electricity from coal and gas so one would expect what would flow into Ontario would be fossil fuel generated power and if and when Pickering Nuclear is shut down the outflow into the PJM may well be renewable (due to the proliferation of wind and solar on the connected transmission system in the area) while gas plants in Ontario would be humming along to power the GTA. That would make Gibbons and the OCAA upset as they want to close the gas plants.

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  4. Dumbfounded here as well. Ford, Rickford & Co. have advised by word and act that there is no recourse that will lower the COST of electricity in Ontario UNTIL the Liberal FIT contracts start to expire. Seems many of the terms of those contracts are ‘confidential’. Are there renewal options if the turbines are still running? Otherwise the IWFs will begin to expire after 2026, same as PNGS. So, 3,000++MW go offline to be replaced natural gas. 3,000MW Nuclear at 8.9c/kWh replaced by 14.8c Gas. 3,000MW of 12g CO2 Nuclear replaced by 490G CO2 Natural Gas. Ontario grid goes Brown. PJM already Brown, 10x more CO2 than Ontario. electricitymap.org
    How will dirtying the Ontario grid save millions of tonnes of GHGs?
    How will ratepayers ‘save’ $100Million/year?
    We know PJM has only 6% RE. Do we know anything about their costs of generation?
    IESO says ‘no comment’ as they haven’t written a contract. Will we know terms of their contract when issued?

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