Wind on Ontario’s electricity grid is a HUGE WASTE

As IESO recently released their March 2020 Monthly Market Summary it is perhaps time to review the electricity sector’s first quarter of the current year and compare it with the 2019 first quarter to see the effects on it emanating from the early stages of the Covid-19 lock-down!

Ontario Consumption:

Reviewing the two quarters indicates Ontario demand dropped from 36,725 GWh (gigawatt hours) to 35,408 GWh over the comparable three months.  The drop of 1,320 GWh or 3.6% is about what 585,000 average Ontario households would consume in three months and represents around 12% of all households in the province.

Logically a drop in consumption would signal a drop in costs for ratepayers based on the principal of “supply and demand” but the way Ontario contracted for power supply means it doesn’t!  The “must take” contracts awarded for wind and solar signed by the McGuinty/Wynne led Ontario Liberal Governments requires us to either accept it or pay for its curtailment.

What happened with wind generation in 2019 and 2020 is not readily available from IESO (Independent Electricity System Operator) despite their claim of “transparency”!  Thanks to my friend, Scott Luft however, it is; via data he downloads from IESO on a regular basis in respect to TX (transmission connected) industrial wind turbines (IWT) and his accurate estimates of IWT generation connected to the DX (distribution connected) grid of local distribution companies.

Wind Generation’s Value:

Based on Scott’s IWT data, generation accepted to the TX and DX grids in the first three months of 2020 was 4,336 GWh with another 437 GWh curtailed.  For 2019 the accepted IWT generation was 4,449 GWh with 218 GWh curtailed.  Scott also tracks the hourly value of IWT generation when it is delivered to the grid noting the HOEP (Hourly Ontario Energy Price) market price. The latter is consistently under the average monthly HOEP value(s) signaling its bad habit of generating during low demand causing it to be sold for pennies compared to its actual cost.  In 2019 the price was 17% below the average HOEP monthly average and in 2020 the price was 31% lower.  The HOEP in 2019 valued all of wind’s generation over the three months at $102.6 million but in 2020 it was valued at only $49.8 million.

Wind Generation’s Cost:

On the other side of the ledger the total costs of the 2019 IWT generation over the three months hit the ratepayers for at least* $626.9 million versus $637.8 million in 2020 and allowing for the “HOEP” value, net costs were $524.2 million for 2019 and $587.9 in 2020 for an increase of $63.7million (+12.2%).

While wind was generating surplus power, IESO were busy selling it (and other surplus power) at the cheap prices noted above to our neighbours; in New York, Michigan, Quebec etc.  In 2019 we sold 4,784 GWh or 107.5% of grid accepted wind and in 2020 we sold 4,449 GWh or 126.8% of grid accepted wind, clearly demonstrating we didn’t need IWT generation!  At the same time OPG were spilling water (300 GWh in 2019’s 1st Quarter), and IESO were paying idling gas plants and possibly had Bruce Power steam-off nuclear.  All of the foregoing adds to the costs of electricity for Ontario’s ratepayers but IESO don’t disclose that information!

Wind Energy’s Annual Burden:

As one can readily discern, Ontario’s electricity sector has been severely compromised! Based on the foregoing it indicates IWT generation alone, is a burden of over $2 billion annually! Ontario’s ratepayers and taxpayers must endure those costs until the contracts finally expire unless the Ford government enacts legislation to stop the bleeding of ratepayer and taxpayer dollars.

*The bulk of the IWT contracts pay $135/MWh plus up to a 20% Cost of Living allowance meaning they are paid north of that price and additionally should they be forced to curtail their energy they receive $120/MWh.

The OEB and IESO are Coming After us Ratepayers Again

It appears the almost 200 employees at the OEB and the over 700 employees at IESO who collectively must survive on an average annual salary, plus benefits, of only $150K are concerned as the Covid-19 pandemic has affected people in the province.

If for some reason you felt their concerns were related to all the people who have been laid off or will lose their jobs or businesses because of the pandemic you would be sadly mistaken!

The concern, as expressed by the OEB is with OPG and electricity transmitters, ie: Hydro One!  Their recent letter of April 29, 2020 instructs those two parties to:  establish “Deferral Accounts to Record Impacts Arising from the COVID-19 Emergency”.  The letter notes; “electricity and natural gas distributors* may incur incremental costs as a result of the ongoing COVID-19 pandemic.”  As a result, the “OEB ordered the establishment of a deferral account with sub-accounts for electricity and natural gas distributors to use to track any incremental costs and lost revenues related to the COVID-19 pandemic effective March 24, 2020.”

NB: deferral accounts are set up to recoup lost revenue!

The IESO held a webinar April 23, 2020 titled: “An overview of COVID-19 impacts on electricity system operations” to also deal with the issues.

IESO disclosed some interesting pieces of information in their webinar such as:  “IESO and stakeholders have been limiting staff on-site, deferring non-essential work, and focusing on core operations” and “A third control room was built and successfully deployed in 10 days, which can be used to further maintain physical separation of control room operators”.

The latter disclosure is a big wow, as many of us have been after IESO to provide up-to-date disclosure information on issues such as: curtailed wind, spilled hydro, embedded generation etc. etc. for years without success but show them a “pandemic” and they can apparently accomplish a new “control room” in 10 days!  A simple search on the IESO website of “transparency” generates 2,290 hits but for some reason they have difficulty generating the foregoing information for those of us with a curious mind!

IESO’s webinar does provide some interesting information and the following stands out not so much for its truthfulness as much as for what IESO ignores.  First, what they posted: “High surplus baseload generation (SBG) conditions are often observed in the spring when demand is low and there are large amounts of energy from hydroelectric resources caused by higher water levels”.  The foregoing comes as no surprise however, what is surprising is, they make no mention of either wind or solar’s penchant to produce much higher generation during the Spring!  Why focus on what we all know and avoid what we would like to know?

Needless to say, the webinar info discloses (with the exception of residential consumption increasing by 4%) all segments: small commercial, industrial, etc. are showing decreased consumption in the double digit category meaning surplus baseload generation is being exported (at very cheap prices) or (non-disclosed) we are curtailing wind or spilling hydro and it will appear in our future bills and we must pay for it.

Add the above to the OEB and IESO efforts to ensure OPG and Hydro One employees (as well as themselves) can maintain their lifestyles and watch those OEB “deferral accounts” bound upwards.

Ratepayers should prepare themselves for future rate increases to ensure all those overworked and underpaid “public service” employees in the electricity sector receive their entitlements!

*While the word “distributors” is used we are unsure if that applies to all of the almost 70 LDC (local distribution companies) in the province.

Ontario’s Lock-down is Bad News for Small/Medium Sized Businesses

IESO has just released their March Monthly Market Summary and it hammered Ontario’s small and medium sized businesses where 42% (2..4 million) of Ontario’s private sector employees work, according to the CFIB (Canadian Federation of Independent Business).

The lock-down imposed by the Ontario and Federal governments, related to the pandemic, has driven down electricity consumption in the province with March being an early warning to the extended shutdown.  The March 2020 Monthly Market Summary when compared to the March 2019 summary indicates an overall drop in consumption of 5.7% or 669.3 GWh* (gigawatt hours) and 86.6% (580 GWh) of the drop was by Class B ratepayers.

While consumption dropped, Ontario’s net exports increased from 2019 by 664.1 GWh but as we ratepayers know that is not a good thing as those exports are sold at the market price or HOEP which fell 49% from an average of $27.34/MWh in 2019 to $13.93/MWh in 2020.  What that means is even though net exports increased by 80% revenues decreased from $22.7 million to $20.8 million. That implies; because of the way energy costs are allocated in Ontario, generating excess power (principally wind and solar) and selling it to our neighbours is akin to simply giving it away.

Now looking at the cost of consumption in the province and the transfer of support from Class B to Class A ratepayers the results are worse.  In March 2019 Class B ratepayers consumed 8.629 GWh and the GA (Global Adjustment) costs were $692.2 million meaning the average GA per MWh was $80.41/MWh and the HOEP added $27.34 making the overall cost of a MWh/$107.75 (10.7 cents/kWh). In 2020 it grew to a GA of $119.42/MWh and with the HOEP of $13.93/MWh added, it came to $133.35/MWh (13.3 cents/kWh) or an increase of $26.60/MWh.  Class A ratepayers on the other hand had an all-in rate in 2019 of $75.76/MWh and $75.87/MWh in 2020, an increase of only 9 cents/MWh.

Included in the Class B customer base are all residential customers (and farmers) but the Ford Government froze those rates at 10.1 cents/kWh due to the Covid-19 pandemic.  The government did nothing for all of the remaining small and medium sized Class B businesses who are shouldering more than just high electricity rates due to the lock-down.  Their livelihood is at stake!

How can the government expect Class B small and medium sized businesses to continue to support the larger Class A customers via the cost shift and hope they will survive the pandemic?

The time has come for the province to recognize how important to Ontario those businesses and their 2.4 million employees really are! Either they should fix the mess those contracted wind and solar generators have created, amend the methodology of the Global Adjustment, or, offer relief to the rest of the Class B ratepayers.

April looks to be even worse for those businesses so the Government should fix it now!

 

*A GWh is 1,000 MWh and the 669.3 GWh is what 890,000 average Ontario households consume monthly.

Another Day and over $15 million was Tossed Away

Once again Ontario ratepayers and taxpayers were forced to throw $15 million plus into the garbage.

Yesterday, April 21, 2020, our electricity system operator, IESO, managed the grid in a way that treats ratepayers and taxpayers as bottomless pits. The wind was blowing strong throughout the province and if all their generation was accepted into the grid it would have generated more power than hydro did.

IESO accepted 48,100 MWh of wind generation and curtailed 47,200 MWh.  At the same time, they gave away 70,000 MWh to our neighbours! Yes “gave away” is correct as yesterday’s market price or HOEP was -0.05 ($/MWh) according to IESO’s Daily Market Summary.

The 48,100 MWh of wind cost us $6.5 million and curtailed wind another $5.7 million so the total cost of wind generation for the day was $12.2 million or $254/MWh (25.4 cents/kWh) for the grid accepted portion.  Almost all of the 70,000 MWh was given away to New York and Michigan so effectively we are helping them financially cope with the costs of the Covid-19 pandemic by providing them with FREE energy. The 70,000 MWh we gave away was about what 2.8 million average Ontario households (over 50% of all households in the province) would consume in one day.

If we calculate the MWh we gave away in excess of the grid accepted wind (70,000 MWh – 48,100 MWh = 21,900 MWh) at IESO’s first estimate of the Global Adjustment* (GA) of $137.07 we can add another $2.9 million to the monies we were forced to toss away yesterday. That makes the total hit to Ontario’s residential and small and medium sized businesses over $15.2 million above what electricity should have cost us for the day.

If we did this every day of the year the cost to Ontario’s taxpayers and ratepayers would be over $5 billion annually.

Time for Ontario’s current government to put an end to this and pass legislation to stop this craziness!

*April’s GA is likely to be north of $160/MWh according to my friend Scott Luft.

Ratepayers get Dinged Again for Nothing

Ratepayers get Dinged Again for Nothing

If the $43.4 million Ontario ratepayers and taxpayers paid for nothing Easter weekend wasn’t bad enough news, unfortunately, the bad news keeps on coming!

Monday April 13th added another big chunk of money to the coffers of generators (mainly those who own the industrial wind turbines [IWT]).  The wind was blowing when it wasn’t needed but IESO took 58,700 MWh of it, added it to the grid and also paid for another 20,800 MWh of curtailed wind with our dollars.  Together IWT, (grid accepted and curtailed) added $10.5 million to the costs of generating power for the day.

Total “Ontario Demand” was 313,295 MWh but IESO accepted 406,320 MWh (IESO refer to that as “Market Demand”) even though the additional 93,025 MWh wasn’t needed.  IESO sold off the excess generation via the HOEP (hourly Ontario electricity price) market and the maximum price they got for it was 0.00 cents/MWh.

The above easily demonstrates wind generation wasn’t needed. Grid accepted wind represented 62.4% of what was sold for -0.03 cents/MWh according to IESO’s Daily Market Summary, but it cost us $10.5 million.  As if to add to the grief, the additional 36,414 MWh we sold for nothing cost another $5 million, using IESO’s first GA estimate of $137.07/MWh for the month.  It’s also worth mentioning idling gas plants added approximately $3.2 million to the day’s costs to back-up wind and solar generation.

The total dollar amount of $18.7 million for another day of waste added $60/MWh to the costs of Ontario’s Demand of 313,295 MWh pushing costs close to $200/MWh or .20cents/kWh. We also probably got dinged for spilled hydro which would add further costs but IESO don’t disclose that information.

It’s time our current government recognized the catastrophe the McGuinty/Wynne governments created in respect to the electricity sector. I’m confident the ratepayers and taxpayers of Ontario would be delighted if the Ford government used their power to end this insane result of the Ontario Liberal’s Green Energy Act.

Fix it please as we taxpayers and ratepayers are tired of paying for NOTHING!

Easter Weekend and Wind Generators Gorged on Ontario’s Chocolates

Since the McGuinty led, Ontario Liberal government, passed the Green Energy Act in 2009 handing out lucrative above market contracts, Ontario ratepayers have been saddled with increasing costs. Industrial wind generators tend to produce more energy in the middle of the night and during the Spring and Fall when demand is at its lowest levels.  Easter weekend was atypical!

Average demand during a mid-January or mid-July weekend typically has a daily average of just under 400,000 MWh but in the Spring and Fall Ontario’s weekend demand is normally 100,000 MWh less and the past Easter weekend was no exception.  According to IESO’s Daily Market Summaries for April 10th, 11th and 12th the average daily Ontario demand was 293,400 MWh. If one does the math the hourly average demand over the three days was 12,225 MWh, easily supplied by nuclear which averaged over 10,000 MW over the 72 hours and hydro at an average of less than 4,000 MW.  In one hour when wind generation dropped and demand increased hydro ramped up to over 4,800 MW so together nuclear and hydro could have easily supplied all of our needs even when Ontario demand peaked at 14,174 MW.

Unfortunately, those “must take” contracts granted to wind and solar generators meant IESO were obliged to either accept their generation or pay to curtail what they might generate.  Over those three days, lESO accepted approximately 125,000 MWh of wind generation to the grid and curtailed 84,400 MWh.  The cost of the grid accepted and curtailed wind power works out to a cost of $213.44/MWh or about $26.9 million for unneeded power.

Saying the electricity wind generated was unneeded is not a misnomer, as over those three days we exported 250,000 MWh which was double grid accepted wind.  To make the obvious more obvious IESO sold exports at an average price of $2.71/MWh so if we assume all of the wind generated electricity was exported it would have generated $339 thousand while costing $26.9 million.  Even paying the idling costs (about $10K per month per MW) on the 9,500 MW capacity of gas plants (to back up wind and solar generation) only cost us about $9 million for the three days. The other exported power of 125,000 MWh over those three days cost us the GA (Global Adjustment).  Based on IESO’s first estimate for April the forecast of the GA at $137.07/MWh would mean the additional 125,000 MWh exported; cost ratepayers/taxpayers another $17.1 million.  I am confident we were spilling hydro and paying for it too but IESO don’t disclose that information (transparency is frequently not in their vocabulary).

Summing up  

Adding the costs of wind generation of $26.9 million to the costs of the other exported generation of $17.1 million and deducting the revenue from the sale of the exports of  $600K would see Ontario ratepayers/taxpayers paying $43.4 million over the three days for NOTHING!  Something is inherently wrong with the management of our electricity system despite all of those well-paid public servants operating it.  Thank god it was a cloudy weekend or solar costs would have added to the burden.

Spurious Claims 

While researching the above I was made aware of a letter sent to our esteemed (sarcasm intended) Prime Minister signed by over 250 people  principally associated with universities.  The letter was posted on the website of the National Observer and focused on telling the PM to not execute a “bail-out” for the oil and gas sector.  The following paragraph with its obvious connection to what Ontario has experienced as a result of the Provincial Liberals passing the GEA, displays either their inability to see the obvious or, their complete lack of common sense!  To wit:

 “It inot acceptable to give privileged access to big business associations while excluding representatives from trade unions, universities, municipalities, Indigenous communities and non-profit organizations that work on behalf of the public interest.

Public investment in oil and gas at this time is a highly speculative proposition, and particularly unwise given the urgent need for strategic investments in economic recovery.”

Taxpayers annually hand out hundreds of billions to all of those groups they suggest are “excluded” and the money they receive is generated by the private sector including those in the oil and gas businesses and their supply stream.

Had those professors and reputed experts bothered to examine big business associations such as CanWEA or CanSIA to determine how much they extract from Canadian ratepayers/taxpayers in after-tax dollars they might have been shocked. The Easter weekend in Ontario demonstrates what “privileged access” really looks like!

Looking ahead

Perhaps the time has arrived for Premier Ford to use the Province’s declaration of the “State of Emergency” to reduce payments to wind and solar generators as part of the pandemic exercise.  Unlike so many other companies in Ontario the operators of wind and solar generation have not stepped forward to assist in the fight against Covid-19 and the economic cost to the country. They just want our money.

Time to take away wind and solar generators “privileged access”!

Using less drives up Electricity Prices again, signaling the Province should act

The IESO (Independent Electricity System Operator) just released their Monthly Electricity Report for February 2020 and surprise, surprise, costs went up and ratepayers and taxpayers will pay up!

While Ontario consumption was down by 51,938 MWh (what 75,000 average households would consume in one month) in February 2020, we should also note it had 29 days versus 28 days in 2019. That extra day would add approximately another 400,000 MWh of demand meaning daily consumption decreased by about 15,000 MWh.

So, if we consumed less how come the costs of generation went up?  

As Ontarians know the previous McGuinty/Wynne led governments bungled the electricity sector up so badly that it will take years to sort out.  A combination of things made costs of generation increase this February despite reduced consumption.

Let’s start with wind which, according to my friend Scott Luft, generated 1.555 TWh (TX and DX connected) in February 2020 versus 1.379 TWh in 2019. To cap things off we curtailed almost 96,000 MWh in 2020 versus about 52,000 MWh in 2019.  The combined costs in 2019 of wind generated and curtailed, was approximately $192.4 million (13.9 cents/kwh) and in 2020 it was $234.3 million (15.5 cents/kWh) or $41.9 million higher.  As if to make wind’s unneeded production obvious we exported 1.651 TWh in 2020 and 1.478 TWh in 2019.  One will note in both years wind generated less power than electricity exported—ie; it wasn’t needed!  To make the foregoing (surplus generation) sink-in, the exports in 2019 were sold at an average HOEP (market price) of $27.89/MWh (2.8cents/kWh) and in 2020 we sold them at a lower HOEP price of $14.68/MWh (1.5 cents/kWh).  What this means is our net exports* in 2019 generated $3.3 million more in revenue ($19.9 million) than 2020 ($16.6 million) despite having exported 61.4% less.

The results of the above means Class B ratepayers saw an increase in their February costs up from 11.6 cents/kWh to 12.8 cents/kWh (HOEP plus the Global Adjustment) whereas Class A ratepayers (by picking the “high 5” peak hours annually) saw their costs reduced from 8.22 cent/kWh to 7.46 cents/kWh.

What does the future hold?

With March having signaled the start of a shutdown of much of the economy due to the Covid-19 pandemic one should expect consumption will drop further. The drop in consumption in Ontario will also occur in neighbouring states and provinces meaning exports will drop as will the HOEP market price.  The result will be more wind and solar curtailment, more spilled hydro, more steamed-off nuclear at the time of year when our consumption always falls as warmer weather arrives but we have more sunlight and don’t need our air conditioners or furnaces on to the same extent.  All of that foregone generation and reduced exports will drive up the price of the delivered and consumed electricity. The result will bring further substantial costs for the ratepayers and taxpayers of the province.

While I believe we should be thankful Premier Ford on March 24, 2019 announced electricity rates for the ensuing 45 days would be billed at the off-peak rates for residential (annual average consumption of 9,000 kWh) and small business (annual consumption of 150,000 kWh or less) ratepayers, it is not a big deal! The one-time savings per “average” household will amount to about $50.00 and possibly $2,000 for the largest “small business”!

The question becomes why, under the “State of Emergency” the Ford governement declared, didn’t they act to reduce “first to the grid” rights of wind and solar and stop paying for curtailed power?   At the same time, they should have reduced time-of-use rates more than they did to encourage consumption which may eliminate some of the wasted generation we will undoubtedly experience for the next three months.

The time has come for the contracted suppliers of our electricity generation sector to join the rest of us during this pandemic and if they don’t, the Province should legislate them to show the world: “We are all in this together”!

*Total exports minus imports

OPG’s Record Results for 2019

The Ontario Power Generation (OPG) announced their financial results March 12, 2020 for the year ended December 31, 2019 and the media appears to have been so focused on Covid-19 to even notice.  At first glance the $1,126 million of after-tax income reported appears to be less than 2018’s $1,195 million but the latter includes after-tax income of $205 million associated with the sale of the Lakeview Generating Station and unrelated to earnings from power generation.

Power generation was 77.8 TWh (terawatt hours) in 2019 versus 74 TWh in 2018 and gross revenue climbed by $485 million from $5,537 million to $6,022 million.  Payments, in lieu of taxes, were $190 million versus $141 million in 2019. All-in, the province will be able to include $1,316 million as revenue.  That, as Scott Luft points out, is a long way from covering the $5.5 billion in costs for the “Ontario Electricity Rebate”* (OER) for the upcoming March 31st year-end budget.

Noted in the financial report is the following: “The Enterprise Total Generating Cost (TGC) per megawatt hour (MWh) was $50.82 for 2019, compared to $53.24 for 2018.”  While it appears the claim in this statement is the cost of generating a MWh decreased on a year over year basis, OPG do not define what is included in the “TGC” calculation.  One should suspect a number of substantial costs, paid by ratepayers, are not included in the TGC!

This writer’s preference is to calculate the actual costs per MWh by simply dividing gross revenue by actual generation.  If one does that calculation for 2019 for OPG; the per MWh cost is simply $6,022 million (total revenue) divided by 77.8 TWh (generation reported).  Resulting from this calculation; the cost per MWh for 2019 was $77.40/MWh or 7.74 cents/kWh (kilowatt hour).  Ratepayers in the province would be happy if that was the average of TOU (time-of-use) rates, but ratepayers know, other factors played a role in increasing costs.  Wind and solar generation have driven prices up over the past 10 years by over 100% due to above market, contracted prices and the inability of wind and solar to generate power when it is actually needed causing us to export surplus generation for pennies on the dollar to our neighbours.

Looking back in OPG’s past is interesting.  If one reviews their financial statements for 2009 (the year the GEA was passed) the same calculation as noted above indicates a per MWh cost of $60.97 (6.1 cent/kWh). That means we have seen an increase of $16.43 per MWh or 26.9% over the 10 years!   Ontario’s inflation rate over those same 10 years was 17.97% so the cost of OPG’s generation over that time-frame was slightly above Ontario’s inflation rate.

While we can commend OPG for keeping their costs of generation at reasonable levels it is unclear why they suddenly went south of the border to acquire a string of hydro electric generating stations at a cost of C$1.12 billion. The acquisition of Cube Hydro (merged with Eagle Creek Renewable Energy) adds 627 MW of (mainly) hydro electric capacity but does absolutely nothing (on its surface) to benefit Ontario ratepayers.  As a provincial crown corporation their focus should be to ensure the delivery of cheap reliable power to Ontario ratepayers!

We ratepayers will need to keep our eyes fixed on OPG to ensure they don’t loose sight of their mission which is noted on their website as “ Ontario Power Generation’s mission is to provide low-cost power in a safe, clean, reliable and sustainable manner for the benefit of our customers and shareholder.”

*The OER replaced the Wynne led governments “Fair Hydro Plan” subsidizing rates for residential customers.

A new decade starts with climbing electricity prices in Ontario

IESO just released their January 2020 Monthly Market Report and it brought ratepayers and taxpayers more bad news.  Consumption in the first month of 2020 was down by around 599,000 MWh (what 855,000 average Ontario household’s consume monthly) or 4.7% compared to January 2019.

Consuming less however, cost us more, thanks to the way the McGuinty/Wynne led governments ruled the Province granting renewable energy; “must-take”, contracts at high prices!

Costs were up even though wind generation in January 2020 was down from 2019 by about 216,000 MWh (including curtailed).  Unfortunately consuming so much less had a negative effect on market prices as IESO sold off more generation to our neighbours.  Net exports increased from 1,106,328 MWh to 1,605,552 year over year, up 45.1% and the HOEP average price received for those exports for 2020 was only $14.82 MWh versus $27.82 the prior year.  Wind was not needed either year as in 2019 it was 93.7% of Ontario’s gross exports (1,637,496 MWh) and in 2020 it was 68.7% (1,364,869 MWh).

The drop in the market price (HOEP) of $13/MWh was more than offset by the climb in the Global Adjustment (GA) which increased from $80.85/MWh in 2019 to $102.31/MWh in 2020.  The increase in the GA had a much higher negative effect on Class B ratepayers driving up that portion of costs to 10.24 cents/kWh in 2020 versus 8.08 cents/kWh in 2019.  The foregoing represents a 26.7% increase whereas Class A ratepayers were not as affected seeing their share of the GA climb from 5.32 cents/kWh to 5.66 cents/kWh, an increase of 6.4%.

What the foregoing means is the GA portion of electricity costs to Class B ratepayer, year over year, increased $139.7 million to $911.4 million for just the first month of the new decade despite a reduction in consumption of almost 600,000 MWh. Class A ratepayers saw increased costs of $11.9 million to $196.4 million on a consumption increase of only 3,000 MWh.

Let’s try reverse

Maybe the time has come to drop rates for Class B ratepayers so they would consume more and ironically cause the GA rate to decrease and the all-in price to drop!  Failing that, drop the rate for those small and medium sized Class B businesses so they have competitive electricity prices that would allow them to increase their profits, hire additional staff and in the process consume more electricity!

Time to turn the McGuinty/Wynne Ontario axiom “consuming less, costs more” upside down!

PS: Thanks to Scott Luft of Cold Air for his wind data.