Once Again, Ontario Ratepayers and Taxpayers are Being Told to Hand Over More Money

A recent rate application before the OEB (Ontario Energy Board) brought back memories of when Bob Chiarelli was Ontario’s Minister of Energy and when queried about the costs of cancellation of the planned Oakville TransCanada gas plant stated:  “It’s less than a cup of Tim Hortons coffee a year“!

What brought the foregoing to mind was an OEB application from Wataynikaneyap Power LP for transmission rate increases that (it appears) would apply to all of Ontario’s ratepayers not just those 16 First Nations and their 14,000 residents that will eventually be connected to the power grid.

The announcement made in March 2018 with great fanfare by Ontario Premier Kathleen Wynne and Federal Minister of Indigenous Services, Jane Philpott, concerned a $1.6 billion dollar Federal Government grant to build an 1,800-kilometre transmission line(s) to connect those 16 communities. The application submitted to the OEB seeks .20 cents monthly from all Ontario’s residential ratepayers which equates to $2.40 annually so is very close to the cost of an extra-large “timmies”. Over the 40-year estimated life of the transmission lines the total amount paid by all residential households would be approximately $400 million for this application which is a lot of “timmies” coffee. We should suspect the cost will increase as the transmission lines reach further to connect with the 14 other First Nations.  Oh, and an unknown portion of the .20 cents will go to Hydro One. 

The OEB also recently ruled on a significant application from Hydro One related to both their transmission and distribution connected customers. The OEB labeled it as; “the largest and most complicated rate case to come before the OEB.“ The reasoning behind the foregoing comment was because it was “a combined proposed revenue requirement of approximately $20 billion and a proposed investment plan of about $13 billion over the 2023-2027 rate period“ The result of their review and ruling is; all ratepayers will see an increase in rates associated with transmission costs and those who are Hydro One distribution customers will be slapped with an additional rate increase.  

The bill impacts noted by the OEB stated “on the transmission portion of the application, it is estimated that for a typical Hydro One residential customer with a monthly consumption of 750 kWh, the total bill impact averaged over the 2023-2027 period will be an increase of $0.69 per month“. Once again that doesn’t sound like much and will amount to only $8.28 annually but with 4.2 million households it totals around $35 million for the year and over five years becomes $175 million without factoring in the costs to businesses and other large consumers. 

The rate increase for Hydro One’s distribution customers approved was; “ for a typical residential distribution customer of Hydro One with a monthly consumption of 750 kWh, the total bill impact averaged over the 2023-2027 period will be an increase of $2.43 per month or 1.5%.“ For a residential customer consuming 750 kWh monthly the annual cost comes to $29.16 but will be more for businesses, farmers and other larger consumers.  For the approximately 1.4 million Hydro one residential customers alone the costs will be north of $41 million annually and for businesses will be much higher than the $29.16 for the “average” residential customer. 

As is obvious from the OEB announcements electricity rates are going up but, those increases are not because Ontario has added new generation it’s simply to help build new transmission lines to First Nations, upgrade existing ones and their associated infrastructure for the planned “full electrification” of the electricity sector. One should wonder is it meant  to ensure you will be able to charge your EV during our cold winter days.

Hydro One customers may well be forced to reduce their “timmies” intake over the upcoming years!

Why Wind and Solar Owners Love Energy Storage

Yesterday, November 26^th, 2022, demonstrated why Ontario’s numerous contracted wind and solar owners are so excited about the Ontario Minister of Energy’s objective to secure 1,500 MW of storage capacity be it pumped hydro or BESS (battery energy storage systems)!

Both IWT (industrial wind turbines) and solar panels generated lots of unneeded electricity over the day based on IESO daily generation report and it was more than they tell us: the reason why, is there are approximately 600 MW of IWT capacity and 2,200 MW of solar capacity that are DER (distributed energy resources) so those are not reported by IESO as their minimum reported capacity per generation source is 20 MW and DER’s generation is used by local distribution companies to supply power to communities they serve.  They also include other generation sources such as small, hydro, natural gas, and biomass!

The day was atypical of Ontario’s spring and fall demand as reflected by the fact Ontario’s peak demand was a relatively low 16,345 MW and it occurred at Hour 18 (hour ending at 6 PM).  Throughout the day the wind was blowing and resulted in IESO forecasting IWT would generate almost 76,600 MW but they only reported about 70,500 were accepted into the grid suggesting 6,100 MW were curtailed.  The foregoing translates to a cost of $732,000 for curtailed generation and $9,518,000 for the grid accepted generation. This resulted in an average cost per MWh (megawatt hour) of $145.39 for IWT generation.

Over the day the HOEP averaged only $7.84/MWh and for hours 12 to 15 was $0.00/MW.  In those 4 hours we saw our neighbours in Michigan, NY and Quebec receive 7,314 MW at zero cost which is about what 813 average Ontario households would annually consume and what 243,000 households would consume daily. If those MW we gave away were generated by ground mounted solar (contracts pay them $440/MWh) the cost would have been $3.2 million and if IWT generation the cost would be about $987,000!

Now, it is worth reflecting on how IWT and solar owners could further benefit from those low HOEP market prices.

If the BESS or pumped hydro storage units are owned by the same companies who generated that surplus power for which they were paid either $440/MWh or $135/MWh (sold for 0.00/MWh) turned around and simply scooped that power up via a licensed electricity trader and stored them they could simply hold them until the price jumped the next day or two. 

All those “storage owners” would need to do is check the weather forecasts to see if the sun will shine or the wind will be blowing in the next day or two.

As it turns out today (November 27^th, 2022) is a perfect example of how they could increase their revenue at the expense of Ontario’s ratepayers.  Today the wind is not blowing much, and the sun isn’t shining throughout the province. At Hour 7 AM today the HOEP jumped to $69.25/MWh and since then, has averaged $62.25/MWh meaning those 7,314 MWh at zero cost if sold back would have generated $455,297.  The foregoing would simply add to the revenue those solar panels and IWT generated yesterday at the expense of Ontario’s ratepayers.

It should be recognized yesterday could have allowed them to generate a lot more revenue via storage as the example above only reflected the four hours of $0.00/MWh whereas the overall average for the full 24 hours was a paltry $7.84/MWh or 0.078 cents/kWh.

It seems obvious the IWT and solar generators recognize the unique ability to reach even deeper into Ontario ratepayers’ pockets but what is not obvious is if our Minister of Energy, Todd Smith and the IESO will prevent them from doing so. 

Based on the directive to obtain “a minimum of 1,500 MW of storage” it appears the politicians and bureaucrats may well allow them to do exactly what those IWT and solar owners are hoping for and planning to do!

Hey, Minister of Energy Smith, Clean Energy Credits Should Benefit Ratepayers

Many Ontarians were pleased Premier Ford recognized (sort of) inflation was harming us and gave us short-term (6 months) relief from the sales tax on gasoline of 5.7 cents a litre. In the interim with high inflation driving everything up we should be pretty sure the foregone taxes were or will be fully recovered from sales taxes applied to everything else we consume. The tax relief started on July 1^st and ends December 31^st, 2022.  Looking at the recently released 2021-2022 Public Accounts it is obvious why he did that. Sales tax revenue from April 1, 2021, jumped from $26.6 billion to $30.4 billion by March 31, 2022, an increase of $3.8 billion (14.3%) so, presumably, sales taxes played a role in driving up inflation while increasing the government’s coffers to allow them to achieve an unplanned surplus! 

It is interesting the Ford led government chose just one of the many sources of energy we regularly use for the gesture and ignored “electricity” which is consumed daily by almost all businesses and residents in the province. Perhaps he was of the opinion the Ontario Electricity Rebate (OER) was more than we deserve as the Provincial sales taxes on our electricity bills represent only 76.5% of the OER but it only applies to residential users! If that’s the case, he ignores the fact; those who pay the costs of that rebate are present and future taxpayers who will have to pay the accumulated debt from the OER.  Kind of “in one pocket but out of the other one” tax!

Worth considering and related to the foregoing is the recent announcement by OPG stating they will be selling “clean energy credits” to Microsoft in a “first–of-its-kind deal”! 

One should wonder, will Microsoft be charged sales taxes for something intangible that will serve to improve their ESG (environmental, social and governance) disclosure scores? Those will reputedly be OPG’s “carbon-free hydro and nuclear assets”.  That seems quite strange as Ontario ratepayers (residential and businesses) already purchase the power that OPG hydro and nuclear provide in addition to: those contracted parties of unreliable and intermittent wind and solar generation also claiming to be “carbon-free”.  We ratepayers pay for the power to keep lights on and our manufacturing base, offices, restaurants, etc. etc. operating. We are also burdened to pay the power bill for our hospitals, schools, etc. via our taxes and obliged to pay sales taxes on what we consume.

What is particularly annoying, as a ratepayer; was, what the article noted about the revenue generation from those “clean energy credits”: “OPG said revenue from the credits would also help OPG in its own commitment to achieving net zero as a company by 2040. The funds received will either go toward investments in new clean generation in Ontario, back to the ratepayer or back to the taxpayer through the province.”

From all perspectives the funds generated for the province by OPG are already substantial as OPG’s December 31, 2021 financial statements indicate. OPG’s water rental costs were $415 million (paid to the province) including $26 million for spilling water during SBG (surplus baseload generation) situations plus $239 million in pseudo income taxes. Collectively that was $654 million.  What is missing from the foregoing however is the 7% sales taxes we ratepayers paid for the 77.6 TWh (terawatt hours) OPG generated and produced gross revenue of $6.877 billion. When that OPG generated power was delivered to us ratepayers we paid the sales taxes, and the province earned another $481.4 million giving the province $1.135 billion for our (taxpayers) investment in OPG.

It should be recognized the foregoing $1.135 billion doesn’t include OPG’s “Net Income Attributable to Shareholder” ie: the Province of Ontario; which was $1.325 billion. That means the “Province” claimed $2.460 billion for the 77.6 TWh OPG generated and delivered. The combined revenue added 3.2 cents/kWh to what we ratepayers consumed. The $2.460 billion is about six (6) times more than the savings of 5.7 cents a litre (approximately $400 million) we will save for the six months of a slight reduction in costs when filling our ICE vehicles with gasoline.

The return on OPG’s equity (December 31, 2021 was $15.532 billion) and the RoE (return on equity) is set by the OEB (Ontario Energy Board) at 8.4% so at $1.325 billion it is very close to the setting, however, if one adds the additional revenue the Province generated it becomes a collective RoE of 15.9% and above what most private sector power companies would hope to achieve! Unfortunately, no one sets the allowed “return on equity” for the province and there is no competition to keep rates down!

One should hope the Ford led ruling party will finally recognize their role in the gouging of ratepayers and ensure any revenues generated by the sale of those “clean energy credits” by OPG finds its way to reducing ratepayer bills rather than further spending by OPG or the province.

Brookfield Renewable Wants to Double Down on Ontario Ratepayers and Taxpayers

Evolugen is a subsidiary of Brookfield Renewable, a part of the Brookfield empire with over $750 billion in assets who happen to own, amongst other assets, the Prince Wind Farm, a 189 MW industrial wind farm located in Sault St. Marie (Soo), Ontario.  The 126 turbines spread over 20,000 acres were commissioned in 2006 in two phases so the contracts will presumably end in 2026.

Prince Wind Farm

A recent announcement out of the Soo suggests Evolugen has intentions to either “repower” those turbines and/or perhaps be granted an extension of the contracts. The article carried in the SOOTODAY stated Evolugen have proposed a $300 million massive battery storage project on a 10 acre site alongside their existing Prince Wind Farm about 15 km outside the Soo. Principals of Evolugen had a video conference call with the Soo city council seeking their endorsement of their plan and it was granted.  The mayor and council were told the “Timberwolf Battery Energy Storage System” would have a capacity of 161 MW of installed capacity and would contain four hours (644 MWh) of energy.

It seems clear the intent of Evolugen via the Timberwolf project is to purchase cheap surplus power during low demand hours (throughout the night) and sell it back during high demand while those Prince wind turbines are paid $135/MWh and frequently generating power when unneeded.  That would allow Evolugen to double down by purchasing the storage power at the HOEP (hourly Ontario energy price) rate which is always low during the night while still reaping the “first-to-the-grid” rights of the wind turbines!  One should rightly assume those actions will further drive up the cost of electricity for Ontario’s ratepayers and taxpayers but it will be great for Brookfield!

One of the major issues one would hope is that Minister of Energy, Todd Smith, IESO and the OEB will consider is; how those IWT (industrial wind turbines) performed over the past several days. They failed miserably to deliver any reliable power that could be stored! As earlier articles about their performance on August 12^th and August 13^th noted they were not generating power when needed.

They did the same on August 14^th making it three days in a row where they were almost absent when needed.  Thankfully, we had natural gas plants that ramped up or down when needed. On the 14^th the IWT delivered a total of 3,950 MWh over the full day averaging only 164.5 MWh each hour which was 3.3% of their capacity. They peaked at Hour 24 (hour ending at midnight) generating 399 MWh but at the peak hour of the day (Hour 18) they produced a meager 114 MWh or 2.3% of capacity and 0.64% of demand. 

Ontario’s natural gas plants were there when needed producing 2,334 MWh at Hour 18 representing 13.1% of demand and at Hour 14 when those IWT managed to generate only 74 MWh (0.4% of demand), they produced 1,787 MWh (10.8% of demand).

If we look at the past three days it becomes obvious, we need responsive generation instead of unreliable and intermittent power delivered by those IWT!  Over the three days grid connected IWT delivered 17,279 MWh which was 4.9% of their capacity despite their “first-to-the-grid” contracted rights. 

If one looks at the foregoing and examines the HOEP on an hourly basis it is obvious why Evolugen are seeking that battery storage contract! They are aware the Prince Wind Farm gets paid $135/MWh no matter what time of the day they generate that MW so if they are able to load up with cheap power via the market price and resell it during peak hours they will double down on the money they extract from us lowly Ontario ratepayers that will benefit the Laurentian Elites.

Surely, Energy Minister Smith, IESO and the OEB will recognize they are trying to “take us to the cleaners” and not allow this to happen!

NB:  The State of New York has recently found out battery storage companies who recently won contract awards have a cost of US $567/kWh making the Canadian equivalent cost $730/kWh or $730,000/MWh a surefire sign we should reject battery storage and retain our natural gas plants.

Enbridge Inc Stymied by Ottawa Energy Evolution

As noted in the OEB’s (Ontario Energy Board) recent “Decision And Order” Enbridge Gas had applied to the OEB in March 2021 for approval to replace 19.8 kilometres of aging gas pipeline in Ottawa.  The pipeline is associated with the St. Laurent Pipeline which services approximately 165,000 Ottawa and Gatineau area customers. 

The OEB recently refused the replacement pipeline and basically told Enbridge to; “Plan for Lower Gas Demand” according to an article in The Energy Mix which noted: “The Ontario Energy Board sent minor shock waves through the province’s energy regulatory and municipal energy communities earlier this month with its refusal to approve the final phases of a $123.7-million pipeline replacement project in Ottawa proposed by Enbridge Gas.”  The article went on to note: “Several observers said this was the first time the OEB had refused a “leave to construct” application from a gas utility,”. 

The OEB, under Anthony Zlahtic,* the Presiding Commissioner, laid out the principal reasons for the decision and three of the five reasons were: “City of Ottawa’s Energy Evolution Plan,”, “Integrated Resource Planning Alternatives” and “Downsizing the Pipeline due to Reduced Future Demand for Natural Gas.”

Anthony Zlahic’s Background

Curiosity about Zlahic’s background led to examining his “Linkedin” file which lists his former jobs and co-incidentally claims he spent over 11 years working for Enbridge after which he worked for a subsidiary of EPCOR an electricity generation and distribution company owned by the City of Edmonton. EPCOR has subsidiary operations with one of those being Capital Power Corp of Toronto where Zlahic was employed and actively and successfully pursued wind power projects under the Ontario GEA (Green Energy Act).  He notes working with companies such as Pattern Renewable Energy as well as Samsung on industrial wind turbine projects for Capital Power and suggests he increased their “influence among key government agencies and companies directly and through the Association of Power producers of Ontario (APPrO) and Canadian Wind Energy Association (CanWEA)”. 

Based on Zlahic’s background and activities with both Enbridge Gas and his obvious belief in IWT (industrial wind turbines) as a reliable energy source one should wonder why the OEB appointed him and WHY he didn’t recuse himself (due to his background with Enbridge) from this hearing?

Also note, Zlahic ruled; Enbridge was responsible for all intervenor costs!

Ottawa’s Prejudicial Intervenor

One of the intervenor’s whom Enbridge is obliged to pay costs to is Pollution Probe** and they were represented by Michael Brophy both a director and team member of Pollution Probe.  Interestingly enough Brophy also was a former employee of Enbridge Gas.  One should wonder, did both Zlahic and Brophy part terms with Enbridge in a favourable way or do they hold some prejudices against them?

Another important fact associated with the ruling is in respect to the City of Ottawa’s Energy Evolution Plan which was actually written by Pollution Probe as an earlier article noted.  The foregoing was confirmed by another intervenor who advised that Michael Brophy told him he was a co-author of the 101 page “plan”. The “plan” suggests the costs to Ottawa for net-zero will be $57.4 billion and result in 3,218 MW of IWT capacity and 1,060 MW of solar capacity on rooftops by 2050!

Was the OEB outcome a result of self-flagellation by Enbridge?

It seems very ironic when examining the March 2021 annual statement of Pollution Probe and note their list of “Sponsors, Major Supporters and Partners” includes none other than Enbridge Inc.  

The Pollution Probe statement filed with the CRA indicates gross revenue of $1,839,737 for the year ended March 31, 2021 but only $113,516 or 6.1% was tax receipted by them so; is this an indication they are not much of a worthwhile “charity”?  

What is not surprising to see in their annual report are numerous government donors listed including: Environment and Climate Change Canada, Government of Canada, Natural Resources Canada, Transport Canada, Ministry of the Environment, Conservation and Parks (Province of Ontario) and TAF (Toronto Atmospheric Fund [Municipality of Metro Toronto]).

Interestingly enough Michael Brophy is also listed as a “Major Donor” meaning taxpayers are hit with a double whammy in that their taxes support the government grants which supply Brophy income from Pollution Probe and his donation(s) provides him with a personal tax receipt!

The tax dollars doled out to Pollution Probe according to a Federal Grant search is in the millions of dollars and is additional to the money handed out by them via Federal Contracts worth hundreds of thousands of our tax dollars!

More self-flagellation by Enbridge

Another exampleof Enbridge’s self-flagellation is related to the net-zero push and ESG (environment, social, governance) issues. A four-page letter sent to Larry Fink, the CEO of BlackRock back in March 2022 clearly demonstrates the foregoing.  The President and CEO of Enbridge, Al Monaco goes into detail on how the company is changing. In in Monaco tells Fink how they have invested in wind farms and solar facilities and enshrined ESG related initiatives, etc. into their business model. An example from the letter related to ESG states: “By 2025 we’re aiming for a workforce that will include 28% racial and ethnic group representation, 40% women, 6% persons with disabilities, and 3.5% Indigenous peoples.”

We should all find it dismaying that one of Canada’s most successful companies is basically kowtowing to BlackRock and in effect, the WEF (World Economic Forum) instead of fighting back knowing the world cannot survive with the wind and solar intermittent and unreliable energy pushed by the WEF and the numerous eco-warriors like Pollution Probe.

Appeal of the Masses

For the will of the people Mr. Monaco please stand up for the enormous benefits of fossil fuels and how they have lifted billions of people around the globe out of poverty and saved so many lives!

*The 2021 Ontario Sunshine list indicates Anthony Zlahtic’s annual salary was $169,349.82!

**One of the original founders of the Strathmere Group which this writer has written a series of articles about was Pollution Probe.

Throw out the Industrial Conservation Initiative (ICI) Program with the Garbage

Universities and Hospitals and many other government operations are allowed to qualify as “Class A” institutions so take advantage of the ICI program by picking peak hours to go off-grid for their electricity needs.  The following “note” was found on page 7 in a study London Economics Institute did for the Canadian Manufacturers and Exporters dated October 22, 2019.

“Examples of larger load customers that are not industrial (i.e. not the focus of this paper) include hospitals, large office complexes, and university campuses. The boundary for a “large” customer is generally around the 5,000 kW mark.” 

In other words, if peak demand at a university or hospital reached 5 MW, they qualified to access the ICI program.  

Former Minister of Energy, Bob Chiarelli, reduced the qualification to 3 MW in 2015 and then to 500 KW in 2017.  The reduction expanded the number of Class A customers and would obviously allow many other government institutions such as colleges and good-sized government buildings or departments to become ICI entities.  So, presumably for years, Class B ratepayers have been subsidizing numerous government institutions be they provincial or federal.  Unfortunately, IESO doesn’t publish a list of Class A ratepayers so it’s impossible to know how much additional taxes we Class B ratepayers are paying to support those government entities who are beneficiaries of cheap electricity prices.

As both a ratepayer and taxpayer it doesn’t seem right government institutions get preferred rates!  It allows them to suggest their budgets are lower so they can pay their professors, etc. more!  They basically access after-tax dollars from Class B ratepayers who have been forced to spend additional funds to obtain electricity for their small business or to heat their homes and cook their meals. 

Pretty sure York University where they crank out eco-warrior graduates via the Faculty of Environmental and Urban Change (EUC) are one of those taking advantage of the ICI as several years ago, they installed two gas generators which was covered in an article your truly penned back in 2020. The article from July 2020 provided details on how York University takes advantage of the ICI program in much more detail while outlining how their Professor Mark Winfield, an eco-warrior, claims it was “the leading edge of innovation in electricity systems around the world”.  

The time has come for Ontario’s Minister of Energy Todd Smith, to stop the double taxation allowed under the ICI program by simply cancelling the benefit for government related institutions.  An exchange with a contact brought me the following observation from someone I have much respect for as they know the system much better than yours truly. 

“The ICI program has become a government welfare system for large industrials and it undermines the emission reduction efforts of others.  It should be redesigned to make sure everyone pays their appropriate share of the fixed costs of the electricity system that serves them.”

PS:  Here is the link to article titled: Ontario is a Bottomless Pit for Class B Ratepayers as the ICI Demonstrates

Ford Energy Act Revolt (FEAR)

An earlier article reflected on how the Ford led government is kowtowing to the Trudeau led government and FEAR mongering in respect to the “climate change” crusade. It suggested the Minister of Energy, Todd Smith was pushing for more negative action in respect to Ontario’s energy sector via directives to both IESO and the OEB that would serve to punish ratepayers/taxpayers for fossil fuel consumption.

The alarming ones were referenced as Ministerial directives from Minister of Energy, Todd Smith, to IESO with the first related to “Clean Energy Credits” and the second to “Pathways to Decarbonization”.  He also has asked the OEB to investigate options for a “New Ultra-Low Overnight Electricity Rate”.

Let’s examine the directives to IESO!

Clean Energy Credit Directive to IESO

Energy Minister Smith’s letter of direction to IESO instructed them “to provide further value for ratepayers by supporting the creation of a voluntary clean energy credit market“. That suggests he is a believer in increasing costs to consumers to eliminate “emissions”!  Is he simply following orders from above?

Needless to say, IESO take instructions from the Ministry so they have commenced the process by issuing an “Engagement Plan” meant to respond to the Ministerial directive! The amusing thing about his directive is he says the objective is; “making life more affordable and I believe ratepayers can reap further value from the electricity system that they have built.“ Hard to believe requiring ratepayers to purchase Clean Energy Credits (CEC) will make “life more affordable”.  It is somewhat mindboggling to research CEC values as they are all over the map in respect to prices.  A somewhat dated article (January 22, 2021) about prices in the New England states show their costs as anywhere from $11.05/MWh to $233.75/MWh depending on the state involved.

Because Ontario’s electricity sector is one of the lowest emitters of CO 2 Minister Smith seems to believe we can, as an example, get an agreement to those using fossil fuels to heat our homes or running a business to purchase CEC!  The revenue will then be used to reduce our costs; making “life more affordable”.  It sounds too much like the Federally imposed “carbon tax” which does nothing more than increase the number of bureaucrats taxpayer’s support while increasing our cost of living! The “credit offerings” will include: “nuclear, waterpower, wind, solar and bioenergy.“ Smith’s letter doesn’t clarify; if you have solar panels on your roof will you be asked to hand out a CEC or whether you will be paid for doing so? One should suspect the various contracted parties under the FIT (feed in tariff) programs will not willingly pass those CEC’s on unless they are compensated.  The other issue is by requiring those who emit CO 2 to purchase CEC means any household using natural gas as a heating source may be required to purchase those CEC.  We should note those same households are already paying carbon taxes imposed by the Federal Government along with the Provincial Sales tax.  CEC simply look to be a further tax increase!  

One would hope the IESO point out the fallacies with the Ministerial directive and stand up for us ratepayer/taxpayers!

Pathways to Decarbonization

On October 7, 2021 IESO released a report titled “Decarbonization And Ontario’s Electricity System” which was a response to thirty (30) municipalities who had pressured the Ministry of Energy to phase out natural gas plants.  IESO’s report of 27 pages outlined the cost to do that would hit ratepayers with $27 billion and raise the price of household electricity bills by $1,200 annually; an increase of 60%. Not quite what the McGuinty/Wynne led government put us through but still very significant during this high inflation period.

Despite that rather shocking news Minister Smith on the same date (October 7, 2021) as IESO’s report, issued a directive to them and it stated “I would ask that IESO evaluate a moratorium on the procurement of new natural gas generating stations and develop an achievable pathway to zero emissions in the electricity sector.”  One should wonder, did he read the 27 pages of the IESO report or not equate what he was suggesting we do in Ontario with what was happening in Europe?  An article just nine days before he issued the directive noted electricity prices climbing to record highs in the UK and EU countries. Renewable energy’s failure in the form of wind and solar’s absence coupled with low water levels were causing electricity prices to climb to record highs at the same time as a price spike in natural gas arrived.  Anyone even casually, following the news at that time out of the UK and most other European countries would have discovered how the efforts to reach net-zero were causing both economic pain and energy poverty. Needless to say, things are much worse now and all of North America has been affected by the increase in the market prices of oil, gas and coal.

Despite the foregoing, IESO will follow Minister Smith’s directive and have commenced the “engagement process” to develop their response.  One would assume the evaluation will mirror that of their earlier report and likely suggest costs will be even higher.

As the heading on this article implies, we should all be “fearful” of what the Ford government is doing as it seems set to create another sharp rise in the cost of electricity despite the fact Ontario has one of the cleanest non-emitting grids in the world. 

Virtue signaling is costly so perhaps the time has come to repulse the “FEAR” and revolt!

PS:  More to come.

The Ford led Government Wants the Cost of Living to Climb More

Premier Ford and his minions have ramped up the diatribe as we approach election day.  Back in the McGuinty/Wynne days I signed up to receive press releases from the Ontario Provincial Government and they have arrived in my in-box since then. This February I received 82 press releases.  A few of them were associated with Covid-19 but the bulk were aligned with bragging about handouts of money.  As I commenced writing this article on March 4, 2022 by 3 PM I had received 9 (nine) press releases from the Ford led Government. A few of those in the February group were associated with the energy sector and the obtuse plans emanating from other ministries in addition to the Ministry of Energy.  Here is a look at a couple of them:

Clean steel gets $900 million from taxpayers:

The headline was; “Province Invests in Clean Steelmaking Technology in Hamilton to Support Future of Ontario’s Auto Sector” and profligates the reputed ability of politicians to pick winners in the “climate change” battle. “The Government of Ontario is contributing up to $500 million in loan and grant support to the project, which will reduce carbon dioxide (CO2) emissions by about three million tonnes annually.”  Todd Smith, Minister of Energy said: “As companies like ArcelorMittal Dofasco make significant investments to electrify and reduce emissions, they do so knowing they can rely on Ontario’s clean and affordable electricity system giving them a competitive advantage,”  One of the “facts” in the press release also stated:  “The Government of Canada announced a federal investment of $400 million to support ArcelorMittal Dofasco’s adoption of innovative low-carbon technology.”  Wow, $900 million of tax dollars dedicated to reducing our emissions using our “clean and affordable electricity system” sounds fantastic, or does it?  The conversion of the steelmaking from using coal to hydrogen will apparently reduce our emissions but no mention is made how it affects our electricity system and if we will have sufficient “clean” generation when the Pickering Nuclear plants have been shut down.  Also, no mention of whether the hydrogen energy will be “carbon-footprint” free!  An article from Forbes suggests hydrogen may not be as clean as our politicians believe: “On an apples-to-apples basis, it depends on several factors but it is likely that the conversion of hydrogen into power will have a carbon footprint greater than that of natural gas-fired power, but less than that of coal-fired power.”

Electric Vehicle Battery Innovation Lab

Another news release was headed up: “Province Invests in Windsor Electric Vehicle Battery Innovation Lab to Boost Regional Economy”.  It stated; “Investments like this one ($1.5 million) will help further develop Ontario’s EV battery supply chain and play a pivotal role in Phase 2 of our Driving Prosperity auto plan.”  While the amount of the recent investment is not overly large if one harkens back to October 2020, one will recall the province committed $295 million to match the Feds commitment to convert the Ford Oakville plant to manufacture EV (electric Vehicles). It should send a signal to all taxpayers the Doug Ford led government seems fully committed to the concept EV are the future of our automotive sector and is fully prepared to use our tax dollars to push the initiative.

It Appears Future Press Releases will cause more inflation  

As noted above I subscribe to the province’s press releases and additionally also do so for weekly bulletins from the OEB (Ontario Energy Board) and the IESO (Independent Electricity System Operator). A couple of IESO bulletins recently caught my eye as they referenced Ministerial directives from Minister of Energy, Todd Smith to IESO. One was related to “Clean Energy Credits” and the other to “Pathways to Decarbonization”.  He also has told the OEB to investigate options for a “New Ultra-Low Overnight Electricity Rate”.

All three of the foregoing directives/instructions are reflective of actions under the McGuinty/Wynne days when their Energy Ministers were busy instructing the OEB and IESO how to reorganize the generation of electricity in order to get the blessings of people like Al Gore, David Suzuki, Jack Gibbons as well as Bruce Lourie and Rick Smith!  It’s looking like a repeat of the days when the Green Energy and Green Economy Act drove up our electricity rates to the point where Ontario’s taxpayers are now picking up almost $7 billion in costs related to the disastrous effects the GEA created.   We will deal with those above directives in a future article.

It appears the Ford government wants the blessing of PM Trudeau and his henchman Steven Guilbeault, Minister of the Environment and Climate Change! For that reason, we should be confident the “cost benefit analysis” associated with the projects receiving taxpayer grants and/or cheap financing simply comes down to Premier Ford doing whatever PM Trudeau and Minister Guilbeault want him to do.

Based on what we are seeing we should expect electricity rates to climb or the $7 billion taxpayers are now absorbing grow larger. 

It will probably be both so stayed tuned!

More Carbon Taxes in the New Year Brought to us by the Justinflation Government

The monthly natural gas bill arrived and intrigued by the upcoming (April 1, 2022) increase in the carbon tax jumping to $50/tonne I thought it would be interesting to compare the taxes levied to the cost of the gas supply.  A quick evaluation indicated that the “Federal Carbon Charge” coupled with the “HST” was 80.3% of the “Gas Supply Charge”. The increase arriving April 1, 2022 will increase that tax from 7.83 cents per cubic meter (m3) to 9.79 cents/m3 (+1.96 cents or 25%).  Assuming the price of natural gas is the same; as of that date it would mean taxes (note that the HST is charged on it also) will then represent 93.2% of fuel costs.

As if to keep that “Justinflation” target moving the OEB (Ontario Energy Board) just announced natural gas rates would increase effective January 1, 2022.  The OEB doesn’t bother to tell us the percentage increase and instead only tell us the price will increase by 1.2333 cents/m3.  A “penny and a bit” doesn’t sound like much but it amounts to a 9.3% increase in the fuel price meaning your monthly gas bill will be about $5.00 higher. If one couples that $5.00 with the upcoming increase in the “Federal Carbon Charge” ($6/7.00 per month) the combined monthly additional cost will be $11/12.00. That increased cost will suck another $130/$140,00 annually from your after-tax income should you wish to stay warm, cook your meals and have a shower. The percentage of households using natural gas for heating purposes is just over 67% in Ontario so those increased taxes and gas costs will affect most families.

If you are a household dependent on natural gas and one of the 53% of Canadian households just $200 away from being able to pay your bills and debt payments the monthly increase could be the breaking point!  It may come down to the decision to; “heat or eat” for many.

It doesn’t seem right, during this period of high inflation, our Federal Government should be imposing tax increases having already impacted the price of natural gas by both blocking pipelines and scaring away capital that would have invested in finding and delivering increased supplies!

If this is the concept described by Prime Minister Trudeau and Minister of Finance Freeland in their “Building Back Better Plan” as “inclusive, sustainable and creates good jobs”, I and most of my fellow Canadians don’t believe it will produce those results!  

We are quickly seeing the foregoing plan, preceded by The Great Reset, coming out of the WEF (World Economic Forum) where Canada’s Finance Minister, Chrystia Freeland sits as a trustee can be seen as nothing more than a socialist agenda.  The resulting activities displayed by her as Finance Minister with PM Justin Trudeau’s support have gone a long way in creating “Justinflation” as Pierre Poilievre was able to get him to admit in parliament!

At a time when Canadian households are suffering from increased prices on everything is not the time to increase taxes to bring us even more of that “Justinflation”!

Energy Poverty the One Economic Activity Growing in Developed Countries

Four years ago, I penned an article about how the GEA (Green Energy Act) had driven up “energy poverty” in Ontario.  The article was supported by data from various sources with the principal one being an OEB (Ontario Energy Board) report from late 2014. The OEB report determined Ontario households experiencing energy poverty numbered either 606,000 or 713.000 based on the two data sets used and represented either 13.5% or 15.8% of all households! The report was initiated by the then Energy Minister, Bob Chiarelli, who was looking to launch a new support program as electricity prices had jumped and many households were seeing their electric power cut-off by their local distribution companies.

Now, fast forward to a report by CUSP (Canadian Urban Sustainability Practitioners) in October 2019 titled “Energy Poverty in Canada” who used 2016 Census data from Statistics Canada and noted households experiencing energy poverty in Ontario had increased to 1,138.065 or just over 22%.  The chart from CUSP’s report below highlights PEI as the province with the highest percentage of households experiencing energy poverty at over 41%.  PEI gets “roughly 98% of power generation from wind farms” with the balance from New Brunswick.  

It is worth noting Canada is not the only country experiencing an increase in energy poverty as reports out of the UK and the EU also highlight how the push to de-fossilize the electricity sector is doing the same thing to households in many other “developed” countries. 

One article dated November 29, 2021 was about Scotland, where the recent UNCOP26 “climate change conference” was held. The article noted there was “a 139 per cent increase in people seeking debt relief support,“ but only a “41 per cent increase in debt relief given out by energy firms, which has resulted in more people disconnecting from the grid year-round.“ The article went on to quote the chief executive of the Wise Group who prepared the report and quoted him stating: “Almost a quarter of Scots live in fuel poverty.”                                     

An article appearing in the magazine “Energy Industry Review” and their website from August 10, 2021 was headlined: “Energy Poverty: A Time Bomb Waiting to Be Defused“ suggests the UK and many EU members are already in dire straits in respect to energy poverty but it varies widely from country to country. The below chart notes some countries have less than 10% of their population experiencing “energy poverty” whereas other countries like Greece and Bulgaria experience over 40%.  The article stresses the geographical differences in EU member countries and how both heat and cold play a hand in causing energy poverty.  The article appears intent on ensuring the EU stick to its goals of reducing fossil fuel consumption and emphasizes money allocated (EUR 312.5 billion of the Next Generation EU [NGEU]) by the EU for improving buildings and homes to make them more fuel efficient is needed.

Yet another article, mere days before COP26 kicked off reported “4.5 million Britons are desperate, facing cuts to welfare, rising energy prices and a long, cold winter.“  It provided a few specific examples noting how energy costs had doubled.  The article also said; while the UK Energy Regulator, Ofgem, caps energy price increases the caps “only apply to households on a standard variable tariff. The rest have little protection. And those reliant on prepayment meters are particularly vulnerable“.  It appears the UK’s PM Boris Johnson’s push for net-zero emissions and renewable generation as the means to achieve his goal is failing miserably. The foregoing was clearly demonstrated by those off-shore industrial wind turbines failing to deliver power requiring coal plants to come back on line to avoid blackouts. It appears those coal plants will be needed for the future too!  The shortage of natural gas, evident in the fall, is not expected to improve until the new Nord Stream 2 Gazprom pipeline receives the blessing of Germany’s regulator followed by approval of the European Commission. Both approvals will take time.

It now appears obvious the push by most developed countries to achieve the “net-zero” emission target by 2050 is futile unless the reputed WEF (World Economic Forum) forecast “by 2030 you’ll own nothing and be happy ” has changed to “by 2030 you’ll own nothing and live-in energy poverty”!