Consuming less drives up costs for Class B ratepayers

The IESO (Independent Electricity System Operator) released their September 2019 Monthly Market Report last week.  Ontario’s total consumption was 10.319 TWh (terawatt hours).  Looking back as far as September 2010 for comparison (the year following enactment of the GEA) Ontario consumption in September 2019 was lower than every year since then.  Consumption by Class B ratepayers this past September was down 8.7% (690.000 MWh-750,000 average households’ annual consumption) from September 2018. Class A ratepayers also consumed less (102,000 MWh or 3%) compared to September 2019.

Consuming less means lower costs, right?

The foregoing question/assertion certainly applies to pretty well everything we consume, if the price remains stable.

Due to the perplexity of how the electricity system functions in Ontario consuming less has a limited ability to reduce our costs.  Each and every generation source is basically treated differently in respect to their rank; on access to the grid, pricing (guaranteed or set by the OEB), length of contract term(s), and their perceived effect on global warming!  Both solar and wind generation, as examples of the latter, are granted “first to the grid” rights meaning they rank higher than nuclear plants and hydro generation units.  Additionally, original contract(s) offered prices in 2010 guaranteed for 20 years with large solar at 63.5 cents/kWh and wind at 13.5 cents/kWh along with a 20% guaranteed escalation clause related to increases in the cost of living (CoL).  At the same time IESO must contend with a trading market referenced as HOEP (Hourly Ontario Energy Price). IESO buys or sells generation based on shortages or surpluses to our grid connected markets such as New York, Michigan, etc.   What the HOEP values generation at and what we pay for it via those contracts evolved into what is known as the GA (Global Adjustment Mechanism) ie; contract value minus HOEP = GA.  Contracting for unreliable intermittent generation like wind and solar has made Ontario a supplier of cheap power for Michigan, NY, Quebec and other connected markets as the GA is not a part of the HOEP sale price.

As noted, Class B ratepayers consumed 8.7% less power in September 2019 versus 2018 and IESO reports our all-in cost (GA+HOEP) was $136.97/MWh versus $115.78 in 2018 for a jump of $21.19/MWh or 18.4%!  In the case of Class A ratepayers, because the HOEP fell from $29.94 in 2018 to $14.34 in 2019 they saw a reduction in their cost per MWh falling 7.7% from $77.70/MWh in 2018 to $71.73 in 2019.  The methodology of Class A pricing results in Class B ratepayers paying more of the GA when the HOEP is lower.

The next question one should ask is why is the HOEP lower if we consume less?

That question is related to facts such as, wind and solar generation get “first to the grid” rights.  As noted, September was a low consumption month as are most spring and fall months but that is when wind (in particular) generates the bulk of its power and is surplus to our needs.  The result is IESO is obliged to accept it and sell via the HOEP market or curtail it, which we also pay for.  IESO will also steam off nuclear or spill hydro both of which we also pay for.  When they are selling off the surplus our neighbours may not need the power but if it is really cheap, they will snap it up.  In September, as an example TX (transmission connected) and DX (distribution connected) wind combined was (according to my friend Scott Luft) 948,951 MWh including 141,485 MWh of curtailed wind.  Together the costs of unneeded generation was $126 million. The accepted wind generation was HOEP valued at less than $7.4 million adding $118.6 million to the GA pool. As it turned out accepted wind represented 75.7% of our net exports of 1,067,040 MWh and 50.9% of our total exports of 1,586,880 MWh in September. We clearly didn’t need wind generation in September nor since we started handing out those contracts!

To make the foregoing much clearer a read of Scott Luft’s recent post provides an excellent review of how much wind (accepted and curtailed) he calculated, was not exported.  It is truly shocking to see it is less than 10% in each year going back to 2006. Using September’s costs as the base to calculate how much it has affected ratepayers and taxpayers in Ontario for its output (over 37 TWh) since 2006 is a simple task.

Shockingly it represents a pocketbook cost of over $5.5 billion.

The electricity sector has taken $5.5 billion from the pockets of Ontario’s ratepayers/taxpayers just for wind related contracts.  The $5.5 billion could have actually been used to provide things like; better health care, tax reduction, infrastructure investments, electricity price reduction or flattening which would have attracted investments and created jobs.  Instead, we allowed our provincial government to hand out lucrative contracts to foreign wind and solar developers.  Many of those who rushed here to obtain those contracts have taken our money and sold their projects to our government pension funds and left Ontario for “greener” fields!

What the above shows is the Green Energy and Green Economy Act was a disaster for Ontario and will continue to negatively affect us until the contracts expire or our current government acts to cancel or amend them!

Gerald Butts might not be happy

Ontario Power Generation is making some moves that may make Gerald Butts both happy and unhappy

[Photo: Delsan AIM Environmental Services]
Former McGuinty major domo and Trudeau chief of staff Gerald Butts posted a Tweet about the demolition of the Ontario Power Generation (OPG) Nanticoke coal power plant with this somewhat off the wall claim.

Gerald Butts @gmbutts Aug 23  When Dalton McGuinty was elected in 2003, everyone (including OPG) told him this couldn’t be done. Then he and @DwightDuncan did it. This is what progress on #climatechange looks like. The end of 7550MW of coal in Ontario.”

He was inspired apparently by David Hains of the Globe and Mail who Tweeted about the demolition that “This is quite something not just for the spectacular visuals, but also how it closes the book on what was once the largest coal plant in North America, and the largest single source of greenhouse gases.”

So, here are some facts, to put Nanticoke into perspective with renewables.

Nanticoke versus solar

The 4,000 MW Nanticoke coal plant was able to produce 21 million MWh annually,* had 600 employees and has now been replaced by a 44 MW solar array that might produce 58,000 MWh** annually. This would make Gerald Butts happy!

Nanticoke could have produced 364 times more power than the 44 MW of solar panels! The 44 MW of solar panels sit on 260 acres and produce power when the sun shines, whereas the Nanticoke coal plant could produce power when needed. If OPG’s objective was to replace the 4,000 MW with solar (generating at an average of 15 per cent of capacity) they would require 364 times more solar panels and almost 96,000 acres*** of land! (One wonders if OPG had made that move how many employees would be required to sweep the snow off the panels come a blustery winter?)

Replacing Nanticoke’s potential generation with solar panels would have cost about $9.4 billion**** annually versus approximately $630 million at a cost of 3 cents/kwh.

Nanticoke vs. wind power   

Another OPG announcement in late May indicated they would abandon their one  industrial wind turbine (IWT)  and dismantle it.  The press release suggested: “At full power, it could produce enough energy to power about 330 homes.” What that implies is, the 1.8 MW turbine (located on the Pickering Nuclear plant site) operated at about 19% of its capacity to produce intermittent power for those homes. Had OPG opted to replace the Nanticoke coal plant with IWT generation operating at 30% of capacity they would have required 8,000 MW. As a matter of interest CanWEA reported 5,076 MW in operation in Ontario at the end of 2018. Those 8,000 MW of IWT may have supplied the 21 million MWh the Nanticoke plant was capable of generating but, only 35 per cent of the time when Ontario demand required it! The land needed for the 8,000 MW would be about 6,000 acres or twenty-three times the land Nanticoke used.

The annual cost of replacing Nanticoke’s generation with IWT would be north of $2.8 billion***** versus $630 million.

OPG back into fossil fuels

A very recent OPG announcement will surely make Gerald Butts very unhappy! An OPG subsidiary reached agreement with affiliates of TC Energy to acquire natural gas assets at a cost of $2.87 billion.  They are acquiring full ownership of the Napanee plant (900 MW) involved in the McGuinty/Liberal gas plant scandal, Halton Hills (683 MW) and the 50% (275 MW) of Portlands they don’t own.  In total, the 1,858 MW they are acquiring will cost $1.54 million/MW which appears on the high side; however, one would assume OPG would also retain the contracts.

In the case of the Napanee plant they will receive $15K per turbine per month for simply idling, meaning annual revenue should be $162 million.  It one assumes the remaining 958 MW will be paid at a lesser rate of say, $12K per turbine per month, that would add another $138 million annually.  In simple terms OPG should recover their full costs in just under 10 years!  What that hopefully means is the effect of the acquisition should be negligible in respect to ratepayers; however, it appears the Napanee plant has not been commissioned.  Ratepayers should hope the OPG agreement to purchase requires commissioning!


So, in summary, OPG is getting back into the fossil fuel business instead of adding renewable energy in the form of either solar panels or wind turbines. We ratepayers/taxpayers should remember the reason we needed the gas plants in the first place was to back up the intermittent and unreliable wind and solar plants that collectively represent about 7,500 MW of sporadic capacity and were instrumental in driving up electricity costs by a factor in excess of three times inflation rates.


*Enough to supply 2.5 million average Ontario households.

**Enough to supply 6,400 average households.

***That is almost equal to the area the City of London, Ontario currently occupies.

****At the current average cost of solar generation estimated as $$440 per MWh not including back-up

*****Estimated at a cost of $135 per MWh but without back-up.

Rising costs of electricity generation not stopping in Ontario

Ontario’s six-month electricity summary shows that the new government’s promise of cutting costs is going to be tough to achieve. Is it impossible?

IESO finally released their June “Monthly Summary Report” allowing one to determine if Ontario ratepayers consumed more or less electricity in the first six months of 2019 compared to 2018.  As it turns out, grid-connected (TX) consumption was down by 270,000 megawatt hours (MWh), dropping from 66,847 GWh (gigawatt hours) to 66,577 GWh.

Ontario’s gross exports also dropped nominally from 9,791 GWh to 9,718 GWh, but the cost to Ontario ratepayers (due to a higher GA [global adjustment])* in 2019 is approximately $1 billion, and in 2018 up to the end of June, the cost was less at approximately $920 million. The combined average as at June 30th of the HOEP and the GA jumped by $7.14 per MWh for Class B ratepayers from 2018, meaning it added about $346 million in additional costs in the six months.  While most of those increased costs won’t suddenly show up in November when rates are reset by the OEB, it will accumulate in the “Global Adjustment Modifier”** and will hit ratepayers and taxpayers in the future.

Hydro One’s six-month results:                                                                            Comparing the consumption drop IESO reported to Hydro One’s six-month report is interesting: they noted “Electricity distributed to Hydro One customers” actually increased by 294 GWh from 13,517 GWh to 13,811 GWh or 2.2%.  Revenue (net of purchased power) from Hydro One’s local distribution customers however was up by $134 million*** or an impressive 17.7% mainly due to rate increases granted by the OEB.  Transmission revenue was down $49 million (5.8%) as Hydro One stated: “due to cooler weather in the 2nd Quarter” and “lower peak demand”. Despite the overall $85 million revenue jump, Hydro One’s net income was down $96 million as they took the hit for the aborted Avista acquisition along with increases in financing charges and higher OMA costs.

The net income drop meant Hydro One paid out 84.2% ($282 million) of their net income via dividends to shareholders. This was in excess of their targeted payout rate of 70% – 80%. Ratepayers should hope the OEB takes this into account during present and future rate application reviews as, to the best of my knowledge, municipally owned LDC (local distribution companies) payout ratios are in the 50%-60% range! Toronto Hydro, as one example earned $167.3 million in 2018 and paid out $93.9 million in dividends to the City of Toronto for a 56.1% dividend rate. Retaining equity helps keep rates down!

OPG’s six-month results:

Ontario Power Generation just released their financial results for the first six months of 2019 and it looks like they are back in business, generating more electricity and big profits.  For the first six months of the current year they generated 39.3 TWh versus 36 TWh in 2018 increasing their percentage of TX generation consumed by Ontario ratepayers from 53.9% to 59%.  As well, “Income before interest and income taxes” for the “Electricity generating business segments” was up by 44.4%  to $715 million from $496 million.  While some of the increase was due to increased generation, most of it was due to the fact that the OEB granted substantial increases for both nuclear (increased to 8.1 cents/kWh from 7.5 cents/kWh [+8%]) and hydro (increased to 4.5 cents/kWh from 4.2 cents/kWh [+7.1%]) having sat on the rate application approvals**** for a considerable time.  Additionally, OPG were paid for 2.2 TWh of spilled hydro in 2019 versus 2 TWh in 2018 adding $15 million to revenue; however, the real shocker in the reported results was the fact they show OMA costs dropped $35 million.

Industrial wind turbines six-month results:   Thanks to Scott Luft’s data, wind power’s contribution (if one can call it that) for the six months for 2019 was up all-in (TX and DX [distribution connected] plus curtailed) slightly to 7.3 TWh versus 6.9 TWh in 2018. The overall cost however, was higher jumping from approximately $955 million to $1.079 billion.  Coincidently, the 7.3 TWh of 2019 is 83% of gross exports versus 80.9% of 2018’s gross exports.  That simply demonstrates the fact that wind turbines do nothing more than add to the costs of generating electricity in Ontario.  We could have easily done without their generation and their added costs!  Many people who have experienced health problems caused by the audible and inaudible noises produced by the turbines would also welcome their demise.

Conclusion:                                                                                                                                     One can determine from all this that the rising cost of electricity generation in Ontario has not slowed or stopped despite the change of government just over one year ago.

The damage caused through implementation of the Green Energy and Green Economy Act in 2009 continues and it is difficult to see how the current government will reverse the harm the GEA caused.


*The GA pot only affects Ontario ratepayers as the market price (HOEP) is the price surplus electricity is sold at in the export market.                                                                                                                                                **The Ontario Minister of Energy announced future rate increases would be held to the rate of inflation.                                                                                                                                             ***In the 6-month comparison Hydro One’s average “Delivery” charge increased from 5.59 cents/kWh to 6.44 cents/kWh or 15.3% for their 1.3 million customers.                                                                                                                                        ****This was noted by the Energy Minister when passing the “Fixing the Hydro Mess Act”.

Ontario electricity records smashed in June

And no, that didn’t make your life better

The month of June came and went and while several records were set, the media paid no attention.

Let’s start with why it took IESO until early August to release their Monthly Market Summary for June with the rest to follow!

IESO reporting: The IESO webpage where one accesses the daily and monthly summaries states the following: “The monthly report follows the Settlement Calendar for the release of Preliminary statements, generally in the middle of the following month.” While this may not be a record for late reporting it certainly doesn’t live up to their claim. They might want to edit that statement.

Ontario ratepayers’ consumption: The IESO Monthly Market Summary disclosed Ontario’s consumption was less than 10.6 TWh (terawatt hours) and, looking back over the past ten years (since passage of the GEA) June 2019’s TX (transmission-connected), consumption was the lowest. Possibly a record low.

 Curtailed wind: While the amount of curtailed wind (paid for but not generated) wasn’t the highest ever, the percentage of curtailed wind was a new record according to my friend Scott Luft who does an excellent job every month at estimating it, and provides data well before it is made available by IESO.  In June, Scott estimated 390,567 MWh of DX connected wind was curtailed versus 381,946 MWh grid-accepted. The curtailed wind represented 50.6% of what they could have generated and cost ratepayers $46.868 million via the Global Adjustment (GA) pot.

Grid-accepted wind power’s value: Scott also keeps track of the HOEP rate when wind is added to the grid and for June, he noted the HOEP valued wind at 0.17 cents/MWh.  We ratepayers pay wind generation companies an average of $135.00/MWH while the electricity trading market, i.e., HOEP valued their generation for pennies.  This is a record since Scott commenced tracking IESO data. Grid-accepted wind was HOEP valued at $65,000.

Global Adjustment sets a record: On Page 22 of IESO’s Monthly Market Summary they provide the Arithmetic and Weighted Average of both the GA and the HOEP and as it turned out, the GA hit a new record high for both at $140.96/MWh and $142.11MWh respectively.  This record high GA signals a high transfer to the Fair Hydro Plan (FHP) instituted by the Wynne government to reduce residential ratepayer’s electricity bills.

Monthly transfer to the FHP sets a record: The FHP transfer is referred to as the “GA Modifier” and it set a record for June coming in at $329.8 million, or 32.3% of the June GA cost ($1,018.2 million) for Class B ratepayers. Both the amount of the transfer and the percentage established new records.

HOEP sets a new record low: IESO’s “Monthly Market Summary” page 22 also contains the monthly Arithmetic and Weighted Average of the month’s HOEP value and they were respectively $3.68/MWh and $4.83/MWh and both were new lows.

Contribution by ratepayers to net exports sets a record:  As sales of surplus electricity to our neighbours doesn’t include the GA costs our net exports (surplus grid generation) for the month were adversely affected by the low HOEP.  Net exports for the month were 1.7 TWh (enough to power 2.2 million average residential households for the month) and generated approximately $8.2 million at $4.83/MWh but cost ratepayers about $241.6 million at $137.28/MWh meaning the loss for the month of $233.4 million was added to the GA pot.

Conclusion                                                                                                                                      What all this demonstrates is that there is something severely wrong with our electricity system in Ontario.

While wind and solar clearly played a significant role in driving up our electricity costs as it turns out, for June, a large portion of the record costs came about as OEB approved rate riders for OPG. Some of those are related to OPG’s nuclear refurbishment whereas other increases are due to OPG rate applications that were before the OEB for several years.  The latter are related to variance accounts including pension and other post-employment benefits in the hundreds of millions of dollars.  The OEB said no to the original applications but legal action by OPG took the issue all the way to the Supreme Court of Canada and the OEB lost!  As a result, those rate applications were allowed and their effect is to add hundreds of millions annually to OPG’s revenue base at a cost to ratepayers.  Scott Luft lays out the impacts of the foregoing in a recent posting on his site.

The revenue spurt OPG is now experiencing may well be the reason they suddenly announced the planned acquisition of 1,808 MW of gas plants from TransCanada and its affiliates for $2.87 billion. OPG suggested it was to replace the Pickering Nuclear generation capacity that will be winding down over the next several years, but it adds nothing to the province’s electricity capacity.

Ratepayers and taxpayers will continue to pay the price for political directions/interference and their exercise of control over the electricity sector.

The Green Energy Act passed by the McGuinty government is simply one example. It remains to be seen if the current government can untangle the mess.



Wind power and reliability: 180 degrees apart

An article posted on my blog on February 17, 2019 was related to IESO’s release of grid-connected (TX) 2018 Electricity Data. It disclosed the cost of electricity for the average Class B ratepayer had fallen ever so slightly from 2017, reducing costs by about $5 annually.  The savings on the electricity portion of the average bill may have been eaten up by additional delivery and/or regulatory charges, so was probably not even noticed by most ratepayers.

As I noted then, what caused rates to drop was that we consumed more in 2018 than 2019, resulting in less wasted generation. In 2018, Ontario’s total demand was 137.4 TWh (terawatt hours) — up from 2017 when we consumed 130.3 TWh, for an increase of 7.1 TWh or 5.4%.  Nuclear and hydroelectric generation in 2018 generated 92.5% of total Ontario demand, not including spilled hydro or steamed-off nuclear which is paid for via the GA (Global Adjustment).

As an example of less wasted generation, OPG reported in 2018 that due to SBG (surplus baseload generation) they spilled 3.5 TWh, whereas in 2017 they spilled 5.9 TWh. That was 2.4 TWh less wasted hydroelectric generation we didn’t have to pay for!

Since IESO’s release of the grid-connected data, we are now able to see exactly where all Ontario generation came from, including both grid (TX) and distribution-connected (DX) due to the recent release of the OEB report “Ontario’s System-Wide Electricity Supply Mix: 2018 Data”. The OEB report indicates total Ontario generation of 154.4 TWh in 2018 up from 2017 when it was 150.75 TWh.

About the same time as the OEB released their report, the Ontario Energy Report was also released and it includes both TX and DX generation in detail. It also includes specific information on our exports and imports of electricity plus individual capacities of our generation sources.

Looking at some of the specifics causing our electricity rates to soar since the advent of the Green Energy Act (GEA) in 2009, it is relatively easy to see the principal causes. Wind and solar generation’s inability to deliver power when needed, despite its “baseload” designation, has factored in rising costs in two ways. The first is its detrimental effect on the HOEP and the second is its preponderance to create surplus generation that must be exported, curtailed, spilled or steamed off.

The HOEP in 2017 was the lowest ever, averaging 1.58 cents/kWh increasing to 2.43 cents/kWh in 2018. That means our exports of 18.591 TWh in 2018 generated revenue of approximately $451.8 million ($24.3 million per TWh) but cost ratepayers around $2.138 billion.

That means we lost almost $1.7 billion. The bulk of our exports (15.531 TWh) were sold to New York and Michigan so $1.4 billion of the $1.7 billion in ratepayer costs went to provide cheap power to those two US States.

The further driver to increased costs can be blamed on what we pay wind** and solar generators. For wind it averages $135/MWh and for solar $445/MWh. In 2018 TX plus DX wind generation was 12.3 TWh and curtailed wind was 1.9 TWh for which we pay $120/MWh. Total wind generation costs in 2018 therefore were about $1.888 billion. Solar generation in 2018 from DX and TX connected plants was 3.5 TWh and cost $1.55 billion bringing costs for the two intermittent sources of “baseload” generation to $3.438 billion or about 22 cents/kWh.

The combined cost of losses on exports plus the costs of wind and solar was $5.1 billion.   Is it any wonder our rates are so high?

Perhaps the time has come for all energy ministries to recognize wind and solar are not “baseload” power as defined due to their intermittent and unreliable nature.

Wind and solar power’s designation should logically be changed from “baseload” power to “abstract” or “symbolic” power! That change would better reflect their ability to deliver power when needed.



*Includes both the GA and the HOEP (hourly Ontario energy price).

**IESO suggests we can only count on wind to produce at a level of 13.6% of its capacity.  For solar it’s at about the same level suggesting solar is (in IESO’s view) actually more dependable!

Wind power: not in evidence on Ontario’s hot summer days

Looking for wind power for fans and A/C? Don’t bother

While the wind power lobby claims it could supply as much as one-third of our power, the hot summer days tell a different story — wind is pretty much nowhere to be found

A post on the wind power lobbyist the Canadian Wind Energy Association/  CanWEA’s website about seven months ago (December 6, 2018) stated:  “The Pan Canadian Wind Integration Study* – the largest of its kind ever done in Canada – concluded that this country’s energy grid can be both highly reliable and one-third wind powered.”

Based on the hot days of July 2, 3, and 4 we have just experienced here in Ontario, the “one-third” of wind generation required would have been 482,430 MWh meaning wind capacity would have to be quite a bit larger than the 4,486 MW* currently grid-connected.

On top of that, the wind turbines would have to operate well in excess of the level they operated at during those three days.

Over the three days, total electricity demand was high-averaging just under 483,000 MWh per day. While nuclear, hydro and gas provided almost all of the power (1.448 TWh) needed the 4,486 MW of grid-connected wind generating capacity contributed 12,056 MWh in total over those three days.

That output represented a meagre 0.83% of total demand.

What that suggests is this: operating at that level would require in excess of 86,000 MW of wind capacity (2.3 times Ontario’s existing total grid connected capacity) to simply meet the “one-third” claim.

It would be a big stretch to ever see them contribute the self-proclaimed “one-third” of power the wind power lobby claims.

Hot muggy summer days and very cold winter days when electricity demand is at its highest is generally when industrial wind turbines take the day off!

One-third wind powered would be the antitheses of a “highly reliable” grid.


*Partially funded by taxpayer dollars

**4,486 MW of capacity operating at 100% would produce approximately 323,000 MWh over three days


Ontario Power Generation: where more means less

Back in late 2013, I noted that Ontario Power Generation or OPG had become the whipping boy for the Ministry of Energy. Now, it’s almost six years later, and not much has changed.  Just before my article appeared on Energy Probe, OPG had applied for a change to their “unregulated hydro”. They wanted it changed to “regulated hydro” which they got approved.  What that meant was they no longer would be dependent on receiving just the HOEP (Hourly Ontario Energy Price) market price for unregulated hydro.  The HOEP by then, had fallen due to the Liberal Government’s creation of the GEA (Green Energy Act) and the climb of the Global Adjustment which fell outside of the HOEP market price.

OPG recently released their 1st Quarter 2019 results. Both revenue and generation were up, marginally, by $19 million (1.3%) and .3 TWh (1.6%) respectively.  Nuclear generation was down, but regulated hydro was up with the latter increasing from 7.7 TWh to 8.2 TWh.

Those 8.2 TWh were produced by OPG’s 7475 MW of hydroelectric capacity in service. If one looks back to their 2008 1st Quarter* it indicated OPG had 3,332 MW of regulated hydro and 3,640 MW of unregulated hydro. In 2008 they generated 9.1 TWh; that means the 6,972 MW in service operated at 59.9% of their capacity and in the 2019 comparable quarter they operated at only 50% of their capacity.

In 2008 there was no spilling of hydro reported, but in 2019 they reportedly spilled 0.3 TWh. Producing less hydroelectric generation with a higher capacity seems strange. OPG spent $2.6 billion increasing capacity on the Mattagami River system and another $1.5 billion to increase generation capacity via “Big Becky” on the Niagara River system.  So, an additional 500 plus MW of clean hydroelectric capacity costing $4.1 billion was added but resulted in less generation (0.9 TWh less) than 2008.


The higher generation of hydroelectric power in 2008 had nothing to do with water levels as peak levels that year reached 75.3 metres versus 75.9 metres in 2019. In other words, there was no shortage of “fuel” for OPG’s hydroelectric plants in either 2008 or 2019.

What really happened was back in late 2008 former Premier McGuinty bragging about how the Melancthon EcoPower Centre (199.5 MW of wind capacity) had vaulted Ontario up to the point where it had 617.5 MW of wind capacity in operation. The following year Energy Minister George Smitherman rammed through the GEA (Green Energy and Green Economy Act) which led to the 2010 Long Term Energy Plan (LTEP), released by then Energy Minister, Brad Duguid. The LTEP sought 10,500 MW of renewable energy (7,500 MW of wind plus 2,500 MW of solar and the balance in biomass). The LTEP promised utopia with the creation of 50,000 permanent jobs. Duguid also promised us electricity rates would increase by 3.5% per annum and to help defray that increase they gave residential ratepayers a 10% reduction referenced as the OCEB (Ontario Clean Energy Benefit) which has since ended and was sort of replaced with the Fair Hydro Plan. We now know how those plans and events turned out!

As an example if one looks at the May “off-peak”** rate in 2008 and compare it to 2019 you would note it jumped from 2.7 cents/kWh to 6.5 cents/kWh which is a 140.7% increase and almost five times what Duguid told us rates would increase.

The advent of wind and solar contracts granted “first to the grid” rights at astronomical prices drove up the costs of electricity and their intermittent and unreliable nature required excess generation (generally gas plants) to sit at the ready for when the wind wasn’t blowing or the sun wasn’t shining. Those changes drove up the costs of electricity and coupled with the requirement to grant those “first to the grid” rights to wind generation meant hydro was, and still is, treated as “less qualified” renewable energy.

Ontario could have considerably more clean hydroelectric generation if we were devoid of expensive, above market wind and solar contracts! Instead, because of the lack of a cost benefit analysis by the previous government, Ontario’s ratepayers are stuck with expensive electricity until those contracts expire. At the same time, the taxpayer owned entity OPG suffers from revenue shortfalls for the $4.1 billion it spent to increase their hydro capacity, yet we ratepayers must still pick up the costs of that spending without any of the benefits.

The time has come to let OPG use their full hydroelectric capacity!



*The year before the GEA was passed and the recession occurred.

**Off-peak averages approximately 66% of most residential bills.