5 reasons not to believe wind power lobby spin-Part 2

CanWEA points to Denmark as a fine example of “affordable” wind power — great if you think 47 cents a kWh is affordable [Photo Pioneer Institute]
In Part 1 of this series, I dealt with two of the five claims CanWEA makes for industrial-scale wind power development in its October 11, 2018 blog post, “Five reasons why wind energy is Ontario’s best option for new electricity supply”.

Refuting those two claims for omission of facts was relatively easy.

Here are the details on the remaining three.

3. CanWEA claim: “Wind energy will be necessary if Ontario is to keep Ontario’s electricity supply reliable through the next decade.”

CanWEA says the IESO “forecast a need for significant new electricity generation, especially from 2023 onwards, as the Pickering Nuclear station shuts down, other nuclear units are being refurbished, and generation contracts expire.”   Well, that is true as IESO did suggest a shortfall, but here are the facts: the forecast shortfall is 1,400 MW. The OPG Lennox generation station with 2,100 MW has a contract expiring that year. So the question is, will the contract be extended? I was recently taken on a tour of the Lennox facility where I observed they were in the process of refurbishing one of the four 525-MW units which suggests they anticipate a renewal of the contract. With the anticipated renewal the “need for significant new electricity generation” is simply a figment of CanWEA’s imagination.

This claim goes on to suggest: “New wind energy would help keep Ontario’s electricity supply reliable, as well as more affordable.” And, “Other jurisdictions around the world are proving this – for example, Denmark now produces more than 44 per cent of its electricity from wind turbines on an annual basis.” The Denmark example ignores the cost of residential electricity on Danish households which is the highest in Europe. Denmark’s household electricity price is 312.60 Euro/MWh or $471.10 CAD/MWh, based on current exchange rates.

Is CanWEA suggesting is that if Ontario’s ratepayers were paying 47.1 cents/kWh it would be affordable? That seems like a big stretch and would push many more households into energy poverty!

The same applies to the claim of it being “reliable.” As noted in a June 2017 peer-reviewed report by Marc Brouillette, wind generation in Ontario presented itself when needed only 35% of the time. If one considers that wind’s annual generation averages about 30% of capacity, it is therefore “reliable” about 10.5% of the time it’s actually needed. (Note: IESO values wind generation at 12% in their forecasts)

4. This CanWEA claim suggests: “Wind energy provides many services to system operators to keep electricity supply flexible.” Their view of “flexible” fails to align with what the grid operator IESO would consider flexible. As Marc Brouillette’s report noted, “… wind output over any three-day period can vary between almost zero and 90 per cent of capacity.” That variance often requires clean hydro spillage or nuclear steam-off or the export of surplus capacity or full curtailment.

All of those actions cost ratepayers considerable money. Wind is unable to ramp up if demand increases and is the reason Ontario has over 10,000 MW of gas/oil plant capacity, with much of it idling in case the wind stops blowing or clouds prevent solar from generating. CanWEA needs to review the definition of “flexible.”

Another amusing statement under this claim is that: “Wind energy can also provide a suite of electricity grid services, often more nimbly and more cost effectively than conventional sources, helping to ensure reliable and flexible electricity supply. These services include: operating reserve, regulation, reactive support, voltage control, primary frequency response, load following, and inertia and fast frequency response.”   The bulk of those “suite of electricity grid services” are requirements for any generators on the grid. The ones suggesting operating reserve, reactive support, load following and fast frequency support are really referencing the curtailment of wind generation as noted in the preceding paragraph.

5. CanWEA’s final claim is:Wind energy is essential to reducing greenhouse gas emissions” and goes on to suggest: “Ontario has achieved a 90 per cent reduction in electricity sector greenhouse gas emissions over the past 15 years, and wind energy has been an important contributor. Wind turbines do not emit greenhouse gases, just as they do not pollute the air.” If CanWEA bothered to be truthful, the trade association would not claim “wind energy has been an important contributor” in reducing greenhouse gas emissions.   If you review year-end data as supplied by IESO for the year 2004 and compare it to the data for 2018, you are obliged to reach the conclusion that wind generation played absolutely no role in the “90% reduction in the electricity sector greenhouse gas emissions.”

Ontario demand in 2004 was 153.4 TWh (terawatt hours) and in 2018 was 137.4 TWh representing a drop in demand of 16 TWh. Nuclear generation in 2004 was 77 TWh and in 2018 was 90.1 TWh for an increase in generation of 13.1 TWh. The drop in demand of 16 TWh, plus the increased nuclear  generation of 13.1 TWh, equals 29.1 TWh. Those 29.1 TWh easily displaced the 2004 coal generation of 26.8 TWh!

Ontario didn’t need any wind turbines to achieve the 90 per cent reduction in emissions by closing the coal plants, and CanWEA was totally wrong to suggest wind generation played anything more than a very small role.

As the saying goes, “there are always two sides to every story” but if it doesn’t fit the message you wish to convey, you simply ignore the other side! CanWEA has done that consistently while ignoring the negative impacts of industrial wind turbines.

Here are just five:

1.Providing intermittent and unreliable generation,

2. Causing health problems due to audible and inaudible noise emissions,

3. Driving up electricity costs,

4. Killing birds and bats (all essential parts of the eco-system), and

5. Possible link to contamination of water wells.

I could list other negative impacts, but I would first invite CanWEA to attempt to dispel those five.

Needless to say, the anticipated response will be “crickets”!

PARKER GALLANT

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5 reasons you can’t believe the wind power lobby spin

Part 1 of an analysis of the lobbyist’s claims for low power prices and good times ahead

Since the new Government of Ontario announced it would repeal the Green Energy and Green Economy Act (GEA), the wind power trade association and lobbyist CanWEA, together with the Ontario NDP, Ontario Green Party and numerous environmental groups such as Environmental Defence, Greenpeace Canada, etc., have been throwing temper tantrums.

The consistent claim was “it will have a chilling effect on job creation and investors in the clean economy.” CanWEA have been one of the most outspoken complainers issuing several press releases  with spurious claims about wind power.

One blog post, on October 11, 2018, was the most blatant of the propaganda campaign.  It was titled “Five reasons why wind energy is Ontario’s best option for new electricity supply” and, then, in case you missed it, or to support a new PR onslaught in Ontario, it was reposted via their Facebook page March 31, 2019. The post references selected CanWEA and AWEA claims, including some prepared by others but paid for by CanWEA.

Let’s examine their claimed “five reasons” to choose wind power, starting with two

  1. CanWEA claim: “Wind energy is now the lowest-cost new electricity source” and note: “Alberta recently agreed to procure power from four wind generation projects at an average contract price of 3.7 cents per kilowatt hour – a price that is considerably below the cost of power generation in Ontario today.”

CanWEA fails to disclose that for each MWh of power, wind generators are given a REC (renewable energy certificate) which can be sold to anyone required to either reduce their emissions or purchase a carbon credit/REC. Valuations vary with demand but RECs generally have a value of $15/50 MWh or 1.5/5.0 cents/KWh. If the value of that REC was included in the CanWEA claim, they would have to say the “average contract price” was from 5.2 cents/kWh to 8.7 cents/kWh. Wind power generation in Alberta, as in Ontario, gets “first to the grid rights” meaning whatever is produced, no matter the need, must be accepted by the Alberta Electric System Operator/AESO.

If the wind power isn’t needed, AESO disperses other generation, which they presumably pay for, adding electricity generation costs to ratepayer bills. To make that clearer — In Alberta the AESO in a report notes wind generation negatively impacts pricing. A chart of wind’s capacity factor during “AIL (Alberta Internal Load) peak demand” (in the report) in 2017 shows wind reflected at 6% of its capacity!

That is a clear message that wind cannot be counted on to deliver power when needed.

Those same issues/problems are found in Ontario (wind rated at 12% of capacity) and most other regions around the world where industrial wind turbines represent a minor or major part of grid-connected capacity.

2.CanWEA claim: “Wind energy provides significant economic benefits” and states: “Ontario leads Canada in wind energy operations and wind energy supplies almost 8 per cent of the province’s electricity demand.”

One assumes the 8% refers to 2017, as 2018 results for Ontario were unknown at the time of the CanWEA post in October 2018. Total grid-connected generation, including gross exports in 2017, were 151.2 TWh. Wind accepted generation was 9.2 TWh which represents 6.1% of total demand.

If you include the 3.3 TWh of curtailed wind the wind power owners were paid for, the percentage rises to 8.1% .

That makes the delivered price for grid-accepted wind 17.8 cents/kWh.

And, that 17.8 cents/kWh doesn’t include the 6 TWh of spilled hydro or the 1 TWh of steamed-off nuclear, or the costs of idling gas plants (for when the wind doesn’t blow) which would add another $860 million more driving wind costs to ratepayers to over 27 cents/kWh.

CanWEA’s claim includes several other assertions.

Thousands of well paying, much-needed jobs in manufacturing, construction and local services” and provides a link to a report commissioned by CanWEA by Compass Renewable Energy Consulting Inc. In the Compass report, a chart indicates the economic benefits the 5,552 MW of industrial wind turbines in the province will create. Over the years (2006-2030) “Direct and Indirect Full Time Equivalents (FTEs) [of] 64,500”. They define FTEs as: “Full Time Equivalents refers to full time employment for one year. One FTE = 2,080 hours.” If one calculates the annual jobs the forecast of 64,500 FTE over 20 years (normal FIT contract terms) for 5,552 MW of wind power results in an average of 322.5 jobs annually. This is hardly something to be bragging about.

A stable source of income for landowners” which fails to mention the landowner is committed to a “non-disclosure agreement” meaning if adverse effects occur such as health problems experienced by the landowner families or animals, they can say nothing. Also, if the developer has incurred debt to erect the turbines, the lender will frequently register a lien on the property which may affect the ability of the landowner to borrow funds using the property as security. The landowner is also usually committed to extend the terms of the lease via the agreement for further periods of time in the event the developers contract may be extended.

Property tax revenue for municipalities” which is true, but … the revenue is nominal as the wind turbines are subject to industrial rates that have no connection to their capital costs (approximately $1.5 million per megawatt [MW]) whereas all other industry in a municipality, pay taxes on the full value of their invested capital. This means the decree by former Minister of Finance, Dwight Duncan to MPAC to assess IWT at only $40K per MW is still enforced with only minor adjustments.   The “tax revenue” to municipalities is often much less due to the declined values of households affected by the closeness of those turbines. It frequently causes a net tax loss to municipalities.

Funding for community-based initiatives” is something that was forced on wind developers as many communities wanted to fight back, but were thwarted in Ontario by the GEA. They tried using existing by-laws under their control but usually lost. In order for the developers to proceed with limited objection they proffered “community funding”! The funding was normally less than one half a percent (0.5%) of anticipated revenue so many municipalities accepted the tokenism.

New and sustainable revenue for Indigenous partners” which the Ontario Liberal Government built into the FIT program presumably to suggest support for First Nations by offering higher subsidies if some ownership was held by them. This allowed the developers to negotiate use of First Nations land for the erection of those IWT similar to the “Funding for community-based initiatives”.

Last, this assertion.

Ontario’s wind energy industry is at the heart of a growing wind turbine operations and maintenance business for Canada’s 6400+ wind turbines”. This claim came about because CanWEA established an     O & M (operations and maintenance)“ program to bring together stakeholders to address key challenges facing Canadian wind farm operators. Its key areas of focus are determined by program participants, and include benchmarking data, health and safety best practices, improved networking, and information sharing on critical issues like wildlife and the environment.” Why CanWEA brags about normal maintenance issues is beyond the pale, but claiming “improved networking and information sharing” should be read as their ability to lobby hard for the developers in respect to those “critical issues” that actually connect with the public like noise emissions and health problems, and the killing of birds and bats.

PARKER GALLANT

Soon: Part 2 in this series will deal with the remaining three claims made by CanWEA

MP traces Ontario electricity legacy in the House

The MP for Renfrew-Nipissing-Pembroke in Ontario, Cheryl Gallant, made remarks in the House of Commons recently about the role McGuinty government operatives might now play at the federal level. She quotes my recent article on this issue.

People who live in Ontario have seen this all before. Canadians who follow my speeches in the House of Commons will have been warned about disgraced former prime minister top aide Gerry Butts, who was forced to resign over his role in the SNC-Lavalin corruption scandal. As a principal political operative for Dalton McGuinty and whatever backroom dealings he had with McGuinty’s defeated party replacement, by trashing the Ontario economy, disgraced former PMO operative Gerald Butts can share the credit for the Toronto Liberal policy of “heat or eat” among seniors and others on fixed incomes.

… Well-informed observer Parker Gallant said this in the blog “Energy Perspectives”:

For the benefit of those who didn’t follow Ontario politics during the McGuinty/Wynne era, it’s worth pointing out both Gerry Butts and Ben Chin played significant roles in Ontario, especially the ill-fated electricity file.

Butts is credited as the mastermind behind Dalton McGuinty’s election as Ontario’s Premier: Butts was, according to the Toronto Star, “the man they call ‘the brains behind the operation’ and policy architect of the Liberal government since 2003.”

Butts left the McGuinty government in mid-2008, after he and the Ontario Liberal team set the stage for the Green Energy Act, by pushing for renewable wind and solar projects and to close coal plants. Butts went off to lead the WWF (World Wildlife Fund) for four years before joining [the Prime Minister] as his political advisor.

The article continues:

Ben Chin, engaged as a “political advisor” to Dalton McGuinty, was the McGuinty candidate chosen to run against the NDP’s Peter Tabuns in a byelection in 2006. Chin lost, but returned as a “senior advisor” to Premier McGuinty’s office where he again worked with Gerry Butts. Chin left for the private sector and a short while later was hired back as Vice President Communications for the OPA (Ontario Power Authority). The OPA was the creation of Dwight Duncan when he was McGuinty’s Minister of Energy and became the Crown corporation to enact the myriad of things mired in the Green Energy & Green Economy Act (GEA).

Chin later became embroiled in the “gas plant” scandal as the Premier’s principal contact with the negotiating team dealing with TransCanada et al on compensation issues related to the cancellation. Ontario’s ratepayers know how that turned out! While Chin occupied his position with the OPA, [former executive director of the environmental group Energy Probe] Tom Adams and I were investigating the gas plant scandal by reviewing thousands of documents.

Mr. Gallant goes on:

The following reveals some of our findings in an article I wrote about the “smart grid” and a Brad Duguid directive.

Co-incidentally (noted by Tom Adams), the Duguid directive is dated the same day as the e-mail exchange between Alicia Johnston (formerly a senior political staffer for Energy Minister Brad Duguid, later promoted to the Premier’s Office) and Ben Chin (a senior Ontario Power Authority executive).

Read the full record of MP Gallant’s remarks in the House of Commons here.

Wind power lobbyist spins numbers to its advantage

Too bad the facts show that actually, wind power isn’t needed in Ontario

Comber wind project with 72 turbines: add up ALL the costs for the truth

The trade association and lobbyist for the wind power development industry, the Canadian Wind Energy Association (CanWEA), loves to provide its audience with information that only shows them in a good light. Their audience, “environmental” organizations and gullible politicians are easily sold.

Once again CanWEA has put the spin out.

A recent short post is titled “A Canadian Success Story” and it claims “Wind energy met approximately 6 per cent of Canada’s electricity demand in 2017 – and more than that in jurisdictions such as P.E.I. (28 per cent), Nova Scotia (12 per cent), Ontario (8 per cent), Alberta (7 per cent) and New Brunswick (7 per cent).”

It is curious as to why CanWEA would have used 2017 as their “success story” as it was an expensive one for Ontario’s ratepayers. Wind generation, the curtailment of excess generation, the need for backup gas plants, and the inability of wind to deliver actual power when needed, all played a significant role in continuing to drive up costs for Ontario electricity consumers.

Power arriving on the grid when demand was low was a big factor in the creation of the Fair Hydro Plan by the former government. IESO reported grid-connected wind delivered 9.2 TWh (terawatt hours) which was only 6.4% of total grid-connected generation — not the 8% claimed by CanWEA. Another 3.3 TWh of wind generation was curtailed in 2017 which added costs.

The 9.2 TWh delivered to the grid cost ratepayers $1,242 million and the 3.3 TWh curtailed added another $396 million, bringing the total cost of wind generation to Ontario’s ratepayers to $1.638 billion or 17.7 cents/kWh! If spilled hydro of 6 TWh and 1 TWh of steamed-off nuclear caused by wind due to surplus baseload generation (SBG) conditions, their costs of about $330 million bring the total cost of wind generation to $1.968 billion. And that is without gas plant idling costs for when wind is absent.

The total costs for all grid-supplied electricity in 2017 amounted to approximately $16 billion. So, the cost of wind power generation, along with the wasted hydro and nuclear, represented about 12.3% of all costs for 6.4% of their grid-accepted generation. If costs of our exports were included, wind generation effects on our electricity bills would be even higher. In 2017, nuclear and hydro supplied 97.1% of Ontario’s demand; with the spilled (wasted) hydro of 6 TWh and the 1 TWh of steamed-off nuclear, they could have supplied 102%.

In other words, wind wasn’t needed.

Scanning stats for a couple of months in 2018 shows that during the hot and high demand summer months of July and August, wind generation does what it generally does — falls flat. Data supplied by Scott Luft and the IESO monthly summaries shows wind provided only 4% of Ontario’s demand in July and 4.4% in August. In May 2018, a low demand month, grid-connected wind supplied 5.7% of Ontario demand. It could have supplied 9.1%, but almost 40% of what it could have generated was curtailed due to the month’s low demand.

What this all demonstrates, again, is the intermittency and unreliability of power from wind turbines. Wind power forces ratepayers to simply hand out money without any benefit.

Our politicians need to recognize spin when they see it, and understand that wind turbines provide almost no value in reducing emissions, or providing a reliable supply of electrical power.

PARKER GALLANT

 

Ontario’s ECO says It’s the end of the world!

Cooked! says the enviro commissioner in her last, histrionic report

The Environmental Commissioner of Ontario (ECO), Dianne Saxe, released what appears to be her final “independent”* report on March 27, 2019 — it was full of hyperbole!  A CTV article issued after her news conference at Queens Park about the report carried this quote from her:  “If the world can’t hold together on the Paris Agreement we are toasted, roasted and grilled.”

The Saxe quote immediately reminded me of a very humourous Beyond the Fringe video from 1961 titled “The End of the World”. The cast: Peter Cook, Jonathan Miller, Dudley Moore and Alan Bennett are seated, huddled, on the top of a mountain waiting for The End of the World. Needless to say, the “End of the World” didn’t arrive so they agreed to meet “the same time tomorrow” in case it did.

End-of-the-world claims are common these days, it seems: in 2009, Al Gore claimed the Polar Ice Cap would be entirely melted in five to seven years. Turns out to be another wrong prediction, but the humour was missing, much as it is missing from the ECO’s remarks to the media and in her report.

Ms. Saxe’s lead in to the report is titled “FOSSIL FUEL CONSERVATION WOULD FIGHT CLIMATE CHANGE WHILE SAVING ONTARIANS BILLIONS” and the report itself is titled: “A Healthy, Happy, Prosperous Ontario 2019 Energy Conservation Progress Report, Why we need more energy conservation”.

We heard very many similar stories in the past about how Ontarians could “save billions!“

If one looks back to an article from October 29, 2004 Dwight Duncan, then Ontario Minister of Energy, was defending the $2.3 billion cost of smart meter installations. In a media report “Duncan wants the meters installed so residents and businesses can save money by using electricity in off-peak hours. He says Italy saved so much money that consumers there did not have to pay for the meters. But he doesn’t know if Ontario electricity users will be that lucky.”

Needless to say, we weren’t that lucky!

Several years later when George Smitherman held the post of Energy Minister he testified April 9, 2009 before the Standing Committee on General Government in respect to the Green Energy and Green Economy Act. One of his offerings to the Committee was the big promise: “We anticipate about 1% per year of additional rate increase associated with the bill’s implementation over the next 15 years. Our estimate of cost increases is based upon the way that we actually amortize costs in the energy sector. The research contracted by the official opposition does not. Their report apportions capital costs without consideration of the life of the asset, or, put another way, they didn’t amortize those costs. Their report counts the costs for conservation programs without providing any benefit for reduced consumption by the consumer.”

The new ECO report is 268 pages reiterating these same messages we ratepayers and taxpayers have been hearing, over and over again, for the past 15 years. Is Ms. Saxe unaware the Ontario voters reduced legislative seats held by Liberal MPPs to seven and the principal reason behind their fall from grace was the energy/electricity file? In searching the report, the words “electricity conservation” garners 175 hits and the word “electricity” generates 799 findings. The word “renewables” provides 66 hits and the word “billion” is used 53 times.

Ms. Saxe sincerely believes the world will come to an end unless Ontario’s ratepayers and taxpayers freeze in the dark or pay dearly for any energy consumed!

Ontario’s ECO wants Ontario’s ratepayers and taxpayers to reduce their fossil fuel consumption** while China’s power industry has called for hundreds of new coal power plants to be built by 2030. They have asked the government to allow for the development of between 300 and 500 new coal power plants by 2030 in a move that could single-handedly jeopardize global climate change targets.

That puts a damper on what Ontario might hope to achieve to prevent being “toasted, roasted and grilled”. Perhaps if each of the taxpayers of the province were paid the $207,676.40, the “Sunshine List” disclosed Ms. Saxe was paid in 2018 as the ECO, we would be happy to absorb higher prices for electricity or could buy an expensive EV to reduce our fossil fuel consumption. Until that happens, Ms. Saxe should tone down her expectations!

Ms. Saxe should realize if we are freezing in the dark it is difficult to be “happy, healthy and prosperous”!

Until then, let’s meet “same time tomorrow.”

PARKER GALLANT

*The Premier Ford led government has decreed the ECO should in the future report directly to the Auditor General.

**Fossil fuel consumption in Ontario in 2015 was (petroleum products and natural gas) 2,269 pj (petajoule) with a value of $16.8 billion according to the report and Ontario generated GDP (gross domestic product) of $618 billion meaning fossil fuels contributed only 2.7% of our GDP.

Cutting Ontario’s electricity bills: promise made, promise (partly) kept

How the Ford government is cutting electricity costs, and some suggestions on how they might do better

A month or so before the 2018 Ontario election, the Ontario PC Party made a promise to reduce electricity bills for Ontario’s residential ratepayers by 12% or specifically: “Putting $173 back in the taxpayer pocket”.  The amount needed to achieve the $173 per ratepayer would amount to approximately $807 million annually, based on the 4,665,055 residential ratepayers Ontario had at the end of 2017, according to the OEB’s (Ontario Energy Board) “2017 Yearbook of Electricity Distributors”.

PC leader Doug Ford promised if elected, they would give ratepayers the dividends the government receives from the partially privatized Hydro One. For 2018, that would amount to $245 million as 47.4% (the province’s current ownership) of total dividends ($518 million) awarded to common shareholders by Hydro One.  The dividends of $245 million annually would translate to about $53 per residential ratepayer.

On July 13, 2018, the Minister of Energy, Northern Development and Mines announced the cancellation of 758 renewable energy contracts* which he said would save ratepayers $790 million over the life of the contracts. Assuming the bulk of the contracts were for 20-year terms, that would amount to about $40 million annually, costs that would have been borne by all ratepayers, not just “residential” ones.

Over the past several years, residential ratepayers consume about 32% of all grid-delivered electricity, so the savings to that group should be relatively small as 32% of $40 million only translates to annual savings of $13 million (rounded) or less than $3.00 per residential ratepayer. (Bob Chiarelli, when Minister of Energy would have suggested it would amount to “a large Timmies”.)

So, these two actions leave a shortfall of slightly more than $545 million or $117 per residential ratepayer — where will the balance come from?

Will “bold action” pay out the shortfall for ratepayers?

March 21, 2019 arrived and the Ministry of Energy, Northern Development and Mines issued a press release declaring: “Ford Government Taking Bold Action to Fix Hydro Mess.” It was full of promises, but were they enough to deliver the missing $117/per residential ratepayer?

Winding down the Fair Hydro Plan (FHP)

The press release specifically stated the Ministry would “wind down the Fair Hydro Plan” (FHP) and in the process save billions of dollars in borrowing costs.  They would do that by simply moving the borrowing process from the OPG “Trust” directly to the Province.  As noted in the report of the FAO (Financial Accountability Office) of early 2017, borrowing via the “Trust”, would increase interest costs by “about $4 billion in interest expense, because the interest rate on Provincial debt is lower than the interest rate on OPG Trust’s debt.”  The FAO noted the timeline required to both fund and repay the total debt under the FHP was 29 years, so the $4 billion in savings would amount to approximately $138 million annually.  As the FHP was all directed at residential ratepayers, $138 million would reduce future rate increases by $30 per residential ratepayer.

That reduces the missing $117 to $87 per ratepayer.

Reducing Conservation Spending

Another position in the recent press release was related to reducing conservation spending which has added about $450 million annually to ratepayer bills for the past 10 years.  The effect on residential ratepayers will be approximately one-third of that amount.  Those coupons your local distribution company handed out for the purchase of LED bulbs, and the rebates for installing energy efficient furnaces or air conditioners have been cancelled, which will reduce the bill to residential ratepayers by around $150 million annually.  The effect on ratepayers should be a reduction in future rate increases of $32 per residential ratepayer. So that means the $173 reduction is now $55!

Unanswered at this point is where the remaining $85 per residential ratepayer will come from. Perhaps Minister Rickford would like a suggestion or two to find the missing $400 million in annual costs needed to eliminate the missing $55 per residential ratepayer? Here we go.

Quick and easy savings                                                                                                                                                             Wyoming State has implemented a “wind tax” and a suggestion to do likewise in Ontario was put forward by the writer back in March 2018 as just one idea.  If that is seen by the current government as going “against the grain” of a conservative government, I have another suggestion which can be easily found in the regulatory pigeonholes!

Enforce the regulations

Enforcement of regulations dealing with complaints surrounding wind turbines would reduce the generation they provide out of sync with demand or where they are curtailing their generation, but paid for doing so.

Enforcing regulations should be something the government should be onside with!

A recent article noted: “The Ontario government now has records of thousands of complaints dating back to 2006 regarding excessive noise and shadow flicker or strobe effect. The detailed files on these complaints, which contain notes by Provincial Officers with the ministry of the environment, also contain comments on adverse health effects stemming from exposure to the noise emissions.”

Needless to say, those “complaints” have been virtually ignored. If the regulations were enforced wind developers would be told to shut down their turbines thereby saving ratepayers considerable monies and as a wondrous side benefit, would reduce health issues (and costs to the healthcare system) related to the noise and strobe effects.

The Minister of Energy, Northern Development and Mines would quickly find the $260 million missing to help him reach the goal set by Premier Ford to reduce future bills by the $55 per residential ratepayer.

One should hopefully believe (unlike Kathleen Wynne, our previous Premier), Doug Ford was not suggesting the $173 per residential ratepayer he promised will turn out to be a “stretch goal”!

PARKER GALLANT

*One wind power project, the 100-megawatt “Nation Rise” in North Stormont south of Ottawa, escaped the guillotine, despite not being built and in fact, receiving its approval after the election while the defeated Wynne government was in “caretaker mode.” Cancelling this project would save Ontario ratepayers over $400 million for the 20-year contract, less any penalty for cancelling the contract.

Record profits for Ontario Power Generation

(but there’s a catch…)

Ontario Power Generation or OPG reported their results for the year ended December 31, 2018 on March 7, 2019 and for the fourth year in a row profits were up.

Net income after taxes attributable to the “shareholder” set a record* coming in at $1.195 billion versus $860 million in 2017.

Both 2017 and 2018 net income were affected by the sale of OPG’s properties. Their Head Office sale generated a 2017 after-tax gain of $283 million, and the sale of the Lakeview property generated an after-tax gain in 2018 of $205 million.

Putting aside those one-time gains, the increase in net income of $335 million (up 39%) from 2017 to 2018 is attributable to the $379 million in additional revenue generated by OPG’s nuclear fleet and was, co-incidentally, their total revenue gain, raising OPG’s revenue from $5,158 million in 2017 to $5,537 million in 2018. The increase in nuclear generation year-over-year was nominal, rising from 40.7 TWh (terawatt hours) to 40.9 TWh.

While this may be good news for the province, there is a “catch” : this all means ratepayers will eventually have to pay for the bulk of increased revenue when the Fair Hydro Act ends. The revenue gain came about principally because the OEB granted OPG a substantial rate gain on their nuclear generation amounting to approximately one cent per kWh or about $9/MWh.**

Other good news in the financial report was the OMA (operations, maintenance and administration) costs remained relatively flat as did fuel expenses.

Looking back:                                                                                                                                                    As noted above, OPG achieved record profits in 2018, but revenue was still not a record.  If we look back and compare 2018 with their results for 2008, we find that revenue was actually higher, coming in at $6.082 billion or $545 million (9.8%) higher.  In 2008 however net income was affected by a substantial increase in income taxes and by the recession which affected bond and stock markets (down by 35%) and OPG’s income from the $9.2 billion “Nuclear fixed asset removal and nuclear waste management funds”.

The year 2008 is the year prior to introduction of the GEA and the FIT and microFIT programs which drove up the cost of power in the province and affected OPG’s ability to increase its revenue and net income. First-to-the-grid rights granted to FIT and MicroFIT participants (wind and solar) meant OPG suffered the effects of the HOEP (hourly Ontario electricity pricing) in respect to their unregulated hydro.

In subsequent years the HOEP fell, resulting in OPG’s appeal for that capacity (3,631MW) to become regulated. The appeal was granted!

Another aspect affecting hydro generation profitability is fuel costs which were $254 million for the 2008, 36.4 TWh generated and climbed to $334 million for the smaller 29.8 TWh generated (not including the 3.5 TWh spilled) in 2018. OPG were forced to write-off their fossil fuel (coal) plant costs in 2004, but in 2008 they were still contributing to Ontario’s energy needs supplying 23.2 TWh out of a total of 107.8 TWh from OPG’s generating sources.

If one looks at a simple pricing cost per kilowatt hour, in 2008, dividing OPG’s gross revenue of $6.082 billion by the 107.8 TWh generation the per kWh cost for ratepayers was 5.6 cents/kWh. Doing the same simple calculation for 2018 using gross revenue of $5.537 billion for the 74 TWh generated provides a cost of 7.5 cents/kWh for a 1.9 cents/kWh (up 33.9%) increase. Over the ten years, in simple terms, the average annual increase is approximately 3% and above the inflation rate; however, without the GEA and the FIT/microFIT programs, it is likely that OPG’s costs would have been much closer to annual inflation rates.   The foregoing is borne out if one looks at the IESO year-end reports for 2008 when they state the cost per kWh averaged 5.8 cents/kWh compared to 2018 when their year-end report shows a cost of 11.5 cents/kWh.  That translates to a 5.7 cent/kWh increase — a jump of 98.3% over the same 10-year period, or triple OPG’s costs.

In retrospect one wonders if the proponents for renewable energy (industrial wind turbines, solar panels and biomass) such as Gerald Butts, who held sway over George Smitherman (former Ontario Minister of Energy) and former Ontario Premier Dalton McGuinty seriously contemplated the results of their pilgrimage?

Did the damage done to the province benefit or hurt peoplekind?

You be the judge!

PARKER GALLANT

*Page 5: Financial and Operational Highlights

**Page 4: Annual Information Form