Strange Things that Caught My Eye Over the Recent Week

Should you, as I do, consider recent events to be off the scale of normal, it is worth pondering the cause!  Is it related to the Covid-19 pandemic, climate change, the “woke” generation, government bureaucrats or those in political power or perhaps a combination of some or all of them?  Some recent examples:

Planting Trees in Brampton as Part of Two Billion Trees                                                                             

I’m sure most will recall just before the last Federal election in 2019 our PM Trudeau met with Greta Thunberg and promised her we would plant 2 billion trees.  Well, it appears the process, under the Minister of Natural Resources, Seamus O’Regan has finally started according to a press release on August 4, 2021 which contained the following:

Today, Maninder Sidhu, Parliamentary Secretary to the Minister of International Development and Member of Parliament for Brampton East, on behalf of the Honourable Seamus O’Regan Jr., Minister of Natural Resources, announced $1,280,000 to the City of Brampton in support of the Government of Canada’s plan to plant two billion trees over 10 years. This project will see 8,000 trees planted across the region this year and contribute to the rehabilitation of the city’s urban tree canopy.”

Quick math on the cost per tree being planted comes to $160.00 each meaning if Minister O’Regan Jr. continues at this level the total cost to Canada’s taxpayers will be $320 billion for the 2 billion trees. Those 8,000 trees will, eventually, absorb about 174 tons of CO2 meaning the cost per ton of emissions removal is about $7,400. Pretty sure O’Regan could have purchased “carbon offsets” for a few dollars each from former Governor of the Bank of Canada, Mark Carney and saved the taxpayers money!

CONFIDENCE IN CHARITY LEADERS HAS FALLEN SHARPLY OVER THE LAST TWO DECADES – WHAT DOES THAT MEAN FOR THE SECTOR?

In late June Charity Village released a report that tracked “four research streams that asked about perceptions of charity leaders over time, representing 27 distinct surveys.” The surveys cited go back as far as 2000.  One of the comments in their report stated: “In 2000, 27% of Canadians reported a lot of trust or confidence in charity leaders, but in the Environics Institute’s research, only 8% reported having a lot of confidence in 2020,”. Another finding was, “between 2009 and 2020, confidence in charity leaders dropped by 22 percentage points, compared to only eight percentage points for business leaders, six for union leaders, and three for government leaders.” The preceding findings may (in my mind) be a reflection of the growth in eco-charities who provide no real charitable benefits to those in need and are well funded by domestic and foreign charitable foundations. The former includes many of Canada’s colleges and universities with departments focused on “climate change”! Needless to say, the drop in confidence has resulted in fewer Canadian tax filers donating: “In 2000, 25.5% of Canadian tax filers reported charitable donations, but by 2018 it was only 19.4%.” 

Toyota CEO Agrees With Elon Musk: We Don’t Have Enough Electricity to Electrify All the Cars

Toyota’s CEO at the company’s year-end press conference in mid-December 2020 said; “The current business model of the car industry is going to collapse. The more EVs we build, the worse carbon dioxide gets…When politicians are out there saying, ‘Let’s get rid of all cars using gasoline; do they understand this?” 

Interestingly enough, Elon Musk, the founder of Tesla just a couple of weeks earlier noted “Increasing the availability of sustainable energy is a major challenge as cars move from combustion engines to battery-driven electric motors, a shift which will take two decades, Musk said in a talk hosted by Berlin-based publisher Axel Springer.”  Musk also said; “electricity consumption will double if the world’s car fleets are electrified, increasing the need to expand nuclear, solar, geothermal and wind energy generating sources.” In respect to “wind energy” it is interesting to note the Global Wind Energy Council in an article claimed, at the end of 2020 there were “743 GW of wind power capacity worldwide”.  To put that in perspective the Federal Government’s “Canadian Centre for Energy Information” tells us at the end of 2017 Canada’s total electricity capacity was 145,214 MW which is only 145.2 GW! 

As industrial wind turbine’s (IWT) life span is around 20 years we should expect about 50% of those in operation globally will reach their end-of-life in the next 10 years and the rest by the time Musk forecasts capacity must double.   Approximately the same life-span applies to solar panel and batteries for storage. Those politicians and Musk should also understand the USA in 2020 generated 60.3% of it’s electricity consumption from fossil fuels!  I would therefore suggest the “politicians” cited by Toyota’s CEO along with Musk himself have no understanding of what EV will do to the electricity system globally and why both are way off base and have no bearing on getting us to “net-zero” emissions by 2050!

Hydro One submits five-year Investment Plan to the Ontario Energy Board to energize life for communities

Just a few days ago Hydro One issued a press release announcing they had submitted a 5 year plan to the OEB (Ontario Energy Board) seeking approval to spend $17 billion over that time to reputedly: “reduce the impacts of power outages for its distribution customers by approximately 25 per centand “enable economic growth and prepare for the impacts of climate change.” The proposed capital expenditures are about double what they have been over the past several years (eg: 2019 was $1.667 billion and 2020 was $1.878 billion).  The press release claims “If approved, the five-year Investment Plan will have bill impacts below the expected rate of inflation, with the monthly bill for a typical year-round residential customer increasing by an average of $1.68 each year from 2023 to 2027.” Reviewing the OEB’s Yearbook of Distributors to get a sense of how those “power outages” compare due to “defective equipment” the 2015 report states the hours interrupted due to “defective equipment” were over 4.6 million hours and in 2019 (2020 report is not yet published) they had dropped to just under 4.4 million hours.  Since 2015 Hydro One’s residential customer base also increased by 60,000 so hours per customer have dropped.

As a former banker I don’t believe the approximately $2 million the 1,2 million residential customers will cough up at the suggested $1.68 annual increase will be sufficient to pay the interest on the $1.9 billion of new debt (the foregoing additional debt assumes Hydro One will maintain is debt to equity ratio at 2020 year-end levels) they will incur annually.  By 2027 it will be a pipe dream!

Let us all hope the OEB does its job for the benefit of Hydro One’s customer base of which I am one.

Let’s thank our lucky stars Hydro One was not allowed to buy Avista

While on the subject of Hydro One it should remind all that back a few years ago they were intent on purchasing Avista Corporation via an all-cash purchase at $53 (US) per share.  The total cost for the all-cash offer was estimated at Cdn$6.7 billion.  The closing price on Avista’s stock on Friday July 7, 2021 and over three years after the purchase offer was $42.67 (US).  At the time the purchase offer was made Glen Thibeault was the Ontario Minister of Energy and was keen on the takeover saying: “One of the benefits of broadening the ownership of Hydro One was to unlock the potential for precisely this sort of transaction,”.  Thibeault went on to say; “As the single largest shareholder in Hydro One, the Ontario government would benefit from the company’s receipt of additional regulated returns expected to begin in 2019. Those benefits will be above and beyond the proceeds already attributed to the Ontario Trillium Trust as a result of the IPO and subsequent secondary offerings.”

Needless to say, those of us who felt Hydro One should focus on Ontario’s ratepayers were delighted US regulators in the states where Avista operated refused the takeover. Hydro One had planned to borrow $3.4 billion and issue another $1.4 billion of debentures convertible into Hydro One shares which would have, in all probability, detrimentally impacted all of their existing Ontario ratepayers.

Conclusion

Unfortunately, it appears those we elect as our representative politicians often are more influenced by those lobbying them continually such as the “climate change” advocates or they bow to the bureaucrats who are the beneficiaries of our tax dollars for their pay. Combine the foregoing with the “woke” generation screaming and their mainstream media support along with the push for globalization and we should unfortunately recognize what is continuing to happen appears to be the “new normal”!  

Political Promises, High Electricity Costs, Climate Change, EV and Line 5

I was invited on the Marc Patrone Show on Sauga 960 AM today and the above title suggests some of the topics we covered. You can listen to our discussion on Sauga 960’s Marc Patrone Show starting at 1:03:25 of the podcast of his July 6, 2021 show by going here:

Another Broken Political Promise

Back in April 2018 Doug Ford, the then recently chosen leader of the Ontario PC Party promised “to cut hydro bills by 12 per cent if he wins Ontario’s spring election, saying it would be on top of a rate reduction from the governing Liberals, whose plan he has repeatedly criticized. The Progressive Conservative leader said Thursday that he would cut rates through a variety of measures that would save the average ratepayer $173 a year.”

So how has that promise turned out?                                                                             

A recent report from the C. D. Howe Institute titled; “Power Surge: The Causes of (and Solutions to) Ontario’s Electricity Price Rise Since 2006” reminded me of Premier Ford’s above promise. I decided to measure his promise against actual results from our personal Hydro One bills.

A quick calculation of our June 2018 bill indicated all-in costs on the Hydro One bill we received were 15.06 cents/per kWh (kilowatt hour) after being granted a rebate of the provincial portion (8%) of the HST and a further discount under the “Fair Hydro Plan”.  Collectively the two reductions represented 34.5% of what our bill would have been.  Without discount(s) costs would have been 22.6 cents/kWh!

Fast forward three years later to June 2021 and all-in costs were 14.99 cents/kWh or a drop of 0.07 cents not the 1.8 cents/kWh of the promised 12% reduction.  The strange thing about the latter bill however is on the actual calculations the amount deducted is referenced as the “Ontario Electricity Rebate” (OER) and if added to what we paid would have raised the price to 18 cents/kWh.  On page 1 of the bill however, there was a dollar amount cited (Total Ontario support) that was 3.5 times the amount of the OER and if added to what we were required to pay would have increased the costs to 25.5 cents/kWh or 12.8% more than the 22.6 cents/kWh of June 2018. 

What the foregoing suggests is the Ford government has done nothing to reduce the cost of electricity since elected and instead is simply burdening taxpayers at the rate of 10.6 cents/kWh (25.5 cents/kWh minus 14.9 cents/kWh) for electricity consumed by residential and (perhaps) other ratepayers.

In respect to the foregoing the C. D. Howe report contains the following about the taxpayer burden: “As system costs – particularly in energy generation – have continued to rise, the Ontario government has increasingly turned towards taxpayers to keep total bills down. The most recent estimates from the Ministry of Finance show the cost of subsides rising to a staggering $6.5 billion for the 2021/22 fiscal year – or nearly 3.5 percent of total government expenditures. To put this number in context, that same budget proposed to spend $5.8 billion in taxpayer dollars on long-term care.“

Premier Ford left Greg Richford in the portfolio for three years and this suggests he accomplished nothing other than burdening taxpayers with debt! With the advent of Todd Smith as the new Minister of Energy, taxpayers and ratepayers should hope he will somehow start the process of fixing the mess.

The time has come for the Ford led Government to recognize that taxpayers and ratepayers are normally one and the same individual!

Who gets the carbon credits for recycling wind turbine blades and other burning questions?

As a climate change “realist” this past week has been what I would term, over the top. It seemed there is total confusion about what we should do and what we should avoid to push for net-zero emissions and move to the “circular economy”.  Some examples:

Industrial Wind Turbines are not yet part of the Circular Economy          

Cement giant LafargeHolcim and GE’s renewables wind turbine unit are teaming up and the purpose is “to explore the recycling of wind turbine blades.” The main objective of the partnership is to focus on “circular economy solutions”.  The same article notes one of the largest companies producing IWTs, Vestas, in early 2020 said it was aiming to produce a “zero-waste turbine” by 2040.  If one gives some thought to the Lafarge/GE team you conclude recycling fiberglass, etc. blades should result in the handing out of “carbon credits”! Both of those team members would presumably want them as they both are facing rising costs associated with “democratic” governments punishing them with a carbon-tax due to their emissions. The proponents of renewable energy from wind turbines must now be wringing their hands in confusion as they had pushed the concept that energy produced from them was emissions free but refused to admit their manufacturing generated emissions and that the blades were not recyclable.  It should also be noted that cement if it was a country would reputedly “rank fourth in the world as a climate polluter.”  IWT, based on many research papers could, “warm the surface temperature of the continental U.S. by 0.24 degrees Celsius, with the largest changes occurring at night when surface temperatures increased by up to 1.5 degrees.”  So, will those carbon credits be shared or will they both be rewarded with the carbon tax we consumers are paying now and in the future?

Swiss CO2 law defeated at the ballot box means no carbon tax for the Swiss  

The Swiss held a vote on a CO2 law, based on the “polluter pays” principle,”. It targeted “road vehicles, air traffic, industrial emissions, and the renovation of buildings. Those who cut their CO2 emissions would have benefited from exemptions.” Presumably those who didn’t “cut emissions” would pay an emission tax. Switzerland’s government now has a problem as they have committed to the EU they would cut their emissions. 

It was interesting to note “Urban cantons including Basel, Zurich and Geneva voted in favour of the bill.  But 21 of the 26 Swiss cantons struck it down.”  One should suspect had Canadians voted on the recent move by the Trudeau led government to impose the increase to $170/tonne on emissions the outcome may well have turned out similar. Most large urban community voters seem to fail to realize the outcome will drive the cost of living up as the “carbon tax” climbs whereas the rural communities have a much better understanding of basic economics!

Interestingly the nay side “argued that Switzerland will not make a critical difference to global climate efforts since the real game-changers are China and the United States when it comes to reducing CO2 emissions” which many sane Canadian voters also understand.

So, the question is; when will Canadian voters be given the opportunity to vote yay or nay to the carbon tax?

Meteorologist Says Snow in June In Line With Historical Snowfall on Avalon                                          

The forgoing story about snow in Avalon, Newfoundland June 10, 2021 caught my eye due to having recently watched a video with Natural Resources Minister, Seamus O’Regan doing the introductory speech in a video at the launch of the Ottawa Climate Action Fund (OCAF).  As an aside, OCAF is proposing to spend $57.4 billion tax dollars to make the City of Ottawa achieve “net-zero” emissions by 2050. In the opening welcome from O’Regan he opined about last winter stating, “average temperatures of 10 degrees higher than normal in the height of winter” in parts of Labrador suggesting it was caused by climate change. What he failed to say was average winter temperatures in Newfoundland and Labrador can swing widely by as much as 30 degrees so 10 degrees hardly seems unusual. Nevertheless If you’re pushing the “net-zero” theory to justify handing out tax dollars to groups like OCAF you may only want to present information that is one-sided.

The question someone in the media should ask O’Regan is; do you think snow in June is caused by “climate change”?

Centre Block renovation to take until at least 2030 to complete, cost up to $5Billion                     

Another article that caught my eye was once again all about Ottawa and referenced how the renovation associated with the Peace Tower and Centre Block was not only going to cost taxpayers $5 billion but would also not be completed until 2030 or 2031.  One of the strange issues arising out of the renovation had nothing to do with the $57.4 billion the City of Ottawa wants to spend to make the city reach “net-zero” as the Peace Tower and Centre Block are owned by the Government of Canada. The article noted:

It’s being promised by PSPC (Public Services and Procurement Canada) that the renovation will result in transforming the “largest energy consumer and greenhouse gas emitter” within PSPC’s portfolio of federal buildings into a carbon-neutral facility with significant reductions to energy and water consumption.”

I’m sure PSPC has numerous properties emitting “greenhouse gas” but probably none of them are places where so many politicians are present so perhaps, as taxpayers, we were aware of where the largest “carbon emissions” emanate from; when parliament actually sits. 

Putting aside the fact that our parliamentarians spew “greenhouse gas” one wonders why PSPC didn’t look for alternatives to spending all those tax dollars?  Was the only choice to spend $5 billion to make it “carbon-neutral” or perhaps they should have considered buying some of those California “Global Emission Offset Credit’s” priced at US $20.32/tonne for June 2021? $5 billion would buy a lot of those “offset credits”!

PwC to add 100,000 jobs in US$12 billion strategic revamp

An article in the Financial Post last week stated “PricewaterhouseCoopers LLP is investing US$12 billion across its global business in an overhaul targeting better audits, digitization of services and greener operations.” The article went on to note: “The professional-services provider will hire 100,000 employees and develop the skills of existing staff over the next five years as it seeks to respond to the post-pandemic operating environment” and went on to state; “The firm’s spending will also focus on responding to environmental, social and governance (ESG) trends across its operations.” ESG was a creation of the World Economic Forum (WEF) which was founded by the German economist Charles Schwab.  ESG is fully supported by the big four audit firms as it will allow them to increase their audit bills and some of those funds will presumably result in hiring more staff with those (whatever they are) ESG audit skills. It will also allow the big investment firms like Bloombergs, Brookfield, etc. to make lots of money trading those carbon credits that many firms will be required to purchase due to regulations and “Acts” imposed by government bodies at all levels.

My question is related to the foregoing imposition of ESG!  ESG imposition seems destined to make the very rich even richer and those in the middle and poorer classes poorer and is that it’s objective?

A bird stands in the way of India’s green goals  

India has so far escaped the need to impose carbon taxes but they do seem concerned about “climate change” so have been handing out contracts for more coal generation as well as wind and solar generation. This article indicates they have received push-back from the Wildlife Institute of India on the latter contracts and they were successful pushing for buried transmission lines in order to save an endangered bird known as the “great Indian bustard”.  The Supreme Court ruling supported the Institute but now the developers are crying because burying the transmission lines will reputedly increase costs to them by $4 billion.

The question I would have for the Canadian judicial system is why in most cases when similar objections were raised by opponents of wind and solar generation in Ontario and elsewhere did the rulings handed out favour the developers and ignore wildlife proponents?

IESO and OEB join forces to support innovative projects to help meet province’s growing energy needs

The IESO (independent Electric System Operator) and the OEB (Ontario Energy Board) recently issued a Press Release announcing they have formed a new partnership. The partnership “would test the capabilities of Distributed Energy Resources (DERs) in providing services at both the local and provincial levels.” The DER resources they want to test are identified as: Some examples include rooftop solar panels, battery storage units and demand response devices, such as smart thermostats, that help reduce or shift consumers’ electricity usage.”  While industrial wind turbines are missing from the examples one should assume they are part of the mix as approximately 600 MW (megawatts) of their capacity are already part of the DER!  Ontario’s ratepayers have already experienced those “innovative projects” (sarcasm intended) which caused electricity rates to jump over 100% creating energy poverty while driving energy dependent businesses out of the province. IESO will also subsidize those “innovative projects” via their Grid Innovation Fund (GIF) while the OEB will provide “temporary relief” from regulatory guidelines.

My question is; why is the Minister of Energy allowing this to happen when the outcome has already been clearly demonstrated?

Conclusion  

From all appearances it appears confusion reigns supreme throughout the world when itcomes to the question of “climate change”, and the myriad ways governments and their regulators are dealing with it.  It is time realism is deemed important in respect to the global movement to effectively increase energy poverty and for governments to respect scientific opinion that has been tossed aside by the super-rich out to increase their wealth while harming the rest of mankind!

The time has arrived for governments to answer our “climate realism” questions!

ENERGY EVOLUTION: OTTAWA’S COMMUNITY ENERGY TRANSITION STRATEGY

City of Ottawa plans to spend $57.4 Billion to get to net-zero by 2050 and Carney is helping them

On April 24, 2019 the City of Ottawa passed a motion declaring a “climate emergency” and only two councilors voted against it.  Interestingly one of the “No” votes came from Rick Chiarelli, 2nd cousin of Bob Chiarelli, former Ontario Minister of Energy who during his term of service was a big fan of renewable energy which caused electricity prices to rise over 100% in the province.

Passage of the motion led to the appointment of councilor Scott Moffat as Chair of the City’s Standing Committee on Environmental Protection, Water and Waste Management. Moffat presumably accepted the position with his belief in the reputed and upcoming “climate emergency” motion he supported.

As an outgrowth of the “climate emergency” declaration, the Ottawa Community Foundation (OCF), a registered charity with assets of $178 million (CRA 2019 filing) launched the Ottawa Climate Action Fund (OCAF).  The official launch occurred May 14, 2021 and was moderated by Diana Fox Carney, who happens to be Mark Carney’s wife. 

As yet another coincidence, it was earlier announced on May 3, 2021, by Eurasia Group, “the world’s leading political risk research and consulting firm” (their claim), that “Diana Fox Carney, a widely respected expert on global climate and energy policy, will be joining as a senior advisor. At Eurasia Group, Fox Carney will work closely with Vice Chairman Gerald Butts, who helped negotiate the Paris Climate Agreement, to bolster the firm’s growing climate and energy practice. Most Canadians and particularly Ontarians will recognize the “Butts” name as it was he who; “behind the scenes”, influenced former Ontario Premier, McGuinty in the creation of the GEGEA (Green Energy and Green Economy Act) driving up electricity prices in the push for wind and solar generation.

On the launch day of May 14, 2021 the OCAF issued a press release announcing a: “$21.7M investment from the Government of Canada to bring Carbon Down and Community Up“.  As one would expect the press release carried words of wonder from Ministers Seamus O’Regan and Catherine McKenna on how those tax dollars would help save the world from the climate emergency while creating jobs and making life better for our kids and grandkids.

The City of Ottawa’s plan to get to net-zero by 2050 consists of 101 pages and starts with a “Thank You to Our Partners”. The report states; “The city extends its sincere thanks and appreciation to almost 200 public and private stakeholders representing more than 90 organizations” in discussions and technical workshops! One of those listed is Pollution Probe (a charity) who have been pushing environmental issues for several decades.  The interesting issue in respect to the City of Ottawa’s plan is it appears to have been created by Pollution Probe. When you link to the plan in PDF format it suggests it was PP’s creation not the City!  Also interesting is in the list of OCAF’s appointed advisors one finds an individual by the name of Chris Henderson.  If one looks at Pollution Probe 2020 GALA webpage the moderator for one of the sessions was Chris Henderson.  Coincidental, or is Ottawa’s “net-zero” plan a creation of PP rather than City officials?

The official OCAF online launch with Diana Carney as moderator took place on the same day (May 14, 2021) as the $21.7 million in tax dollars were announced.  The video recording of the launch is just over one hour and included presenters; Seamus O’Regan, Catherine McKenna and a few others including Councilor Moffat!  O’Regan waxed on about temperatures last winter being 10 degrees higher than normal in Labrador as a sign of the climate emergency but if he bothered to investigate history, he would have noted average winter temperatures in Goose Bay, where he grew up, vary by as much as 30 degrees from a low of -30 C to 0 C in January. Ottawa MP McKenna screeched she want’s Ottawa to be the greenest capital ever!

Reverting to the PP plan it is interesting to see the following:  “Financial analysis indicates that cumulative community-wide investments from 2020 to 2050 total $57.4 billion with a present value of $31.8 billion.” To put that in perspective the $21.7 million taxpayer dollars just awarded to the City is 0.4% of the investments reputedly needed and those investments are 14.5 times the City’s current annual budget of $3.94 billion. As one should suspect the plan recommends complete electrification of everything and utilizing renewable energy in the form of solar and wind (lowest power density of energy sources).  From the plan: 

The model indicates that the minimum results required to meet the 100% scenario under the electricity sector are:

• Solar photovoltaic (PV) reaches 1,060 MW by 2050 (approximately 36 km2 of solar PV47 mostly on rooftops)

• Wind generation reaches 3,218 MW by 2050 (approximately 710 large scale turbines)”

The proposal to have 1060 MW of solar panels (40% of what Ontario currently has) and 3,218 MW of wind turbines (60% of what Ontario has currently) to supply Ottawa with the power needed to achieve net-zero by 2050 is a dream Ontarians have already suffered though. Residents in Ottawa should get ready for electricity prices to more than double every 10 years.

The 101-page plan says absolutely nothing about the toxic elements in those 1060 MW of solar panels that will require disposal in 15/20 years when they reach their end of life and need to be removed from the 36 square kilometers of rooftops they will cover.  Interestingly enough, many will have to be removed and replaced before we even reach 2050.

The same concern should be considered in respect to those “710 large scale turbines” whose life cycle is about the same as solar panels and will be 160 metres in height as compared to the 98 metre height of the Peace Tower. I presume Catherine McKenna would welcome solar panels on her roof and one of those industrial wind turbines near or at her residence if she really wants Ottawa to be “the greenest capital ever”.

The OEB yearbook of Distributors for 2019 indicates the hourly peak demand for Hydro Ottawa in the summer was 1,348 MW and winter peak was 1,257 MW, By 2050 or sooner those peaks will double or triple. What that could mean is residents and businesses will be faced with rolling blackouts similar to those experienced by California, Southern Australia and were partially to blame for the Texas blackout. Those three regions have opted for unreliable and intermittent wind and solar generation although Texas hasn’t gone quite as far as California and SA have.

Those of us in the rest of Ontario should insist Hydro Ottawa be disconnected from the grid to ensure only the City of Ottawa is affected by blackouts or brownouts in the future.  Let them spend the $57.4 billion but only use the tax dollars generated by those living in Ottawa and the rest of us can sit back and watch what happens when politicians are eventually accused of harming those who voted for them.

Hydro One Shareholders Should Thank Ontario’s Taxpayers and Premier Ford for Seemingly Embracing the Circular Economy

Hydro One earlier this month released their 1st Quarter 2021 report and EPS (earnings per share) were up from 0.38 cents per share to 0.45 cents for an 18.4% increase and the highest 1st Quarter earnings since becoming a publicly listed company.  The net profit after financing costs and taxes of $273 million also appears to be a record as far back as Hydro One post their first Quarter financials which appears to be 2015.

Hydro One’s report noted the reasons behind the increase as: “Revenues, net of purchased power, for the first quarter were $74 million higher than last year, mainly due to higher distribution and transmission revenues as a result of OEB-approved rates including the timing of the OEB decision on the 2020 rates received in the second quarter of the prior year, and higher energy demand and consumption driven by favourable weather.  The reference to “favourable weather”, I believe, suggests it was colder and due to the Covid-19 lockdown meant ratepayers (particularly residential) consumed more kWh (kilowatt hours) then the prior year.  The results noted distributed power increased from 7,484 GWh (gigawatt hours) to 8,156 GWh for an increase of 9%. Average transmission “60-minute peak demand” also increased by almost 6%.

The reference to “purchased power” signaled costs dropped dramatically due to the Ford government changing the former Wynne led government’s “Fair Hydro Plan” into the Ford government’s “Ontario Electricity Rebate” increasing the taxpayer subsidization. What that did was, decrease the cost of “purchased power” for Hydro One from $1,007 million in 2020 to $894 million in 2021 (despite the 9% consumption increase) dropping the cost per kWh (kilowatt hour) from 13.5 cents/kWh to 11 cents/kWh.  That represented a taxpayer subsidy of around $203 million for the quarter (Hydro One customers only) more than doubling the Wynne subsidy! 

It also meant Hydro One’s ROR (return on revenue) and ROA (return on assets) look much better then past returns which presumably helped drive up the share price.  As an indication Hydro One’s stock exchange price closed at $30.40/share on May 21, 2021 whereas back when Ford declared the March 12, 2020 lockdown the share price was $24.50. What the foregoing $5.90 per share increase suggests is the (approximately) 40% ownership the province holds in Hydro One is now worth about $1.44 billion more (up 24%) than it was worth just over a year ago and will presumably reflect itself favourably on the province’s financial statements when they are released. To make matters even better Hydro One’s quarterly dividend on their shares increased from the comparable quarter and resulted in an approximate $60 million dollar payment to the province.

Boiling it down   

By using taxpayer debt to subsidize electricity costs the Ontario government has increased the value of the assets held in the monopoly where we taxpayers own 40%.  Couple the additional taxpayer debt incurred (to subsidize the per kwh charge), plus the OEB granting rate increases for transmission and distribution of electricity and Hydro One’s profit should increase further! Logically that should drive up the market (share price) value even more in the future!

Is this really what our Federal and Provincial politicians had in mind when they referenced the “Circular Economy”?

Greenpeace Canada, York University Professor and OCAA Chair attack the Ford Government

The Doug Ford led Ontario government took almost three years since they were given the mandate to govern the province (decimating the Wynne led government) to recognize “renewable energy” is given preferential treatment by IESO (Independent Electricity System Operator)!  What they recently did was to state they would “repeal sections of the Electricity Act, 1998 and the Ontario Energy Board Act, 1998 that were introduced under the Green Energy and Green Economy Act, 2009 to promote and prioritize the development or renewable energy.”  They opened the comment time for 40 days commencing April 15, 2021.

The takeaway of the proposed changes was focused as: “Prioritizing renewable generation is no longer appropriate. Going forward, Ontario will ensure value for ratepayers by allowing all resources to compete to meet system needs.”  

As one would expect pushback from the eco-warriors started and Keith Stewart, Senior energy strategist at Greenpeace Canada (Stewart worked for Gerald Butts at WWF as Director, Climate Change) jumped! He was ticked with the proposed changes in regulations and expressed his distain via twitter:

Keith Stewart@climatekeithDoug Ford isn’t only screwing up the pandemic response. His latest climate move: Proposal to Eliminate Renewable Energy Requirements for Ontario’s electricity system#onpoli https://ero.ontario.ca/notice/019-3471 9:48 AM · Apr 25,

Many will recall Greenpeace lost it’s charitable status in 1999 after having operated as a charity since 1976. Revenue Canada “refused to recognize the new Greenpeace Environmental Foundation as a charity, saying its activities have “no public benefit” and that lobbying to shut down industries could send people “into poverty.” It appears Greenpeace continue wishing to “send people into poverty”, ignoring the governments proposed changes are specifically focused to;  “ensure value for ratepayers”.  

An interesting aside! Greenpeace Canada has evolved and created a new entity having charitable status from the Canada Revenue Agency with an “Effective date of status: 2020-09-02”. The new entity is Greenpeace Canada Education Fund (GCEF).

They claim GECF is: “Separate from the campaigning arm of Greenpeace, the Greenpeace Canada Education Fund invests in scientific research, education, and other activities aimed at raising awareness of the environmental issues that affect people in Canada and around the world.” It goes on to state; ”To maintain our independence and integrity, we never take money from governments or corporations. That means the Greenpeace Canada Education Fund relies on donations from individuals, foundations and other non-profit organizations to achieve our goals.” The foregoing echo the words from Greenpeace Canada’s website but a simple search noted Greenpeace Canada got two grants totaling $100K from the Impact Assessment Agency of Canada a division of the Ministry of the Environment and Climate Change so it appears they will take money from governments!

It is also worth noting the new charity and Greenpeace Canada have the same address at 33 Cecil St., Toronto. The December 31, 2019 annual report for Greenpeace Canada claims they spent over $760K on “Public outreach and education” and almost $3 million on fundraising.  They must feel using the new entity will help them reduce “fundraising” expenses due to their ability to issue tax receipts meaning, taxpayers will pick up a good portion of the fundraising costs in the future. 

One should wonder why the CRA changed its mind?      

The other individual who jumped on the bandwagon to condemn the Ford government’s initiative was none other then Mark Winfield*, a York U Professor and former Program Director at Pembina. Joining him with “quotes” in an article posted on “The Energy Mix” was Keith Stewart and Jack Gibbons** of the OCAA (Ontario Clean Air Alliance). The article headline is capitalized and scarily states: “Ontario Creates ‘Innovation Wasteland’ with Latest Renewables Rollback, Critic Warns”.  Some of the scarier quotes from the three individuals in the article are: “allergy to renewable energy”, “evidence-free decision making”, “a political vendetta”, “a program of extermination”, etc. etc. Their concerns seem over the top and aimed at scaring the reader.

Ontarians, who have experienced huge electricity cost increases since the advent of the GEA however, seems oblivious to the unidentified author of the article and the three individuals quoted! Perhaps someone else pays their electricity bills or they have solar panels on their roof or simply, facts don’t matter to them! 

The facts were formerly presented by  Ontario’s Auditor General, Bonnie Lysyk in her December 2, 2015 report which stated: “Between 2004 and 2014, the Ministry issued two policy plans and 93 ministerial directives or directions that did not fully consider the state of the electricity market, did not take long-term effects fully into account and sometimes went against the OPA’s advice.”  The report further described the costs to Ontario’s ratepayers as follows! “In particular, the Global Adjustment fees, covering the excess payments to generators over the market price, cost consumers $37 billion during that period, and are projected to cost another $133 billion from 2015 to 2032.

Those eco-warriors who are dependent on our tax dollars are totally unconcerned about the plan to “ensure value for ratepayers” and instead are hell-bent on further destroying the Ontario and Canadian economies and the well-being of all Canadians!

The time has come to remove the charitable status of them all (including University Foundations)*** unless they dismiss the professors demonizing fossil fuels so they can appreciate what those in the private sector are burdened with!

* For more on Winfield and York University check out this article!

**More on Gibbons and the OCAA here!

***York University Foundation’s (registered charity) April 30, 2020 annual report indicates total revenue of $1.268 billion and a claim that $1.095 billion of that was spent on “charitable activities”.

Ontario’s failure over subsidized wind, solar, biomass energy glut

Marc Patrone kindly had me on his show on Sauga 960 AM once again today (March 30, 2021) and we discussed the costs of the Ontario Liberal follies during the McGuinty/Wynne era! Our chat was about the amount of money it cost us in 2020 for renewables (both transmission and distribution connected) and we also touched on other issues such as the Line 5 pipeline and its possible shutdown. Along the way we had a few chuckles over the mess we still have and the Ford government’s inability to do anything about the electricity sector other than saddle taxpayers with a big chunk of the costs. Have a listen to the podcast starting at 43:50 here:

or if you are a member of NEWSTALK CANADA you can listen here:

https://newstalkcanada.com/?page_id=2365

Ruminations on the Ontario Liberal Electricity Legacy and Premier Ford’s inactions to correct them

I was on the Marc Patrone Show at 960 AM March 23, 2021 to discuss the Ontario Liberal Party legacy in respect to the electricity sector in the province.  We pointed out the billions of dollars in costs of the OLP legacy and how they continue!  At the same time the discussion noted that after almost three years in power the Ford led Ontario Conservative Party has done hardly anything to change the system other than shifting billions of $$$ in costs from ratepayers to taxpayers.

You can listen to our conversation on Sauga 960 AM here on the March 23rd podcast starting at 46:1 ending at 1:02.

The Ontario Liberal Electricity Legacy is Complicated

The Cost of Subsidizing Green Energy Contracts for Industrial and Large Commercial Ratepayers came from the Financial Accountability Office (FAO) of Ontario in a report issued March 18, 2021!  What it states is the upcoming three years (2021-2023) will burden taxpayers with a cost of $2.8 billion.

My take on that “burden” was an estimate of $3.8 billion in an article posted November 9, 2020 just days after the Provincial budget was released announcing the subsidy. I did note, at that time, my estimate was a “back of the envelope” calculation and several events have occurred since then affecting the cost estimates.  The FAO’s forecast is the cost is 2.2 times what the budget estimated it was going to be whereas my estimate was 2.9 times the budget number.

The FAO report goes into further detail suggesting out to 2040 “the renewable generation subsidy program will cost the Province a net total of $15.2 billion.” The latter is referenced in the FAO report as the “Net cost to the Province” as the report stated; if the current subsidy program remained in effect through to 2040 for all segments of electricity consumers the total cost would have been $38.6 billion plus a loss of $1.3 billion in HST.  What the recent amendments to the Ontario Electricity Rebate (OER) program did was reduce the “OER discount provided to residential, farm and small business ratepayers”, which resulted in a reduction of $24.7 billion in estimated costs over the 20 years.

No doubt many Ontario ratepayers will recall Ontario’s Auditor General, Bonnie Lysyk, in 2015 issued a report castigating the Ontario Liberal Party stating; “From 2006 to 2014, the electricity portion of the hydro bills of residential and small-business consumers increased by 70%. In particular, the Global Adjustment fees, covering the excess payments to generators over the market price, cost consumers $37 billion during that period, and are projected to cost another $133 billion from 2015 to 2032.”

That report from the AG was the bedrock used by the Ford led Ontario Conservative Party to make it a major issue during the leadup to the last provincial election and at that time they promised to reduce electricity rates by 12%.  We ratepayers are still waiting for that to happen!  With the advent of the relief provided by the province as a result of the Covid-19 pandemic our rates were reduced but the announcement from the OEB (Ontario Energy Board) on February 22, 2021 stated; “residential and small business customers will resume paying Time-of-Use (TOU) and Tiered pricing under the Regulated Price Plan (RPP) at prices that were set by the Ontario Energy Board (OEB) on December 15, 2020.”  To put the foregoing in context a look at TOU rates before the Ford government were elected and comparing them to those announced by the OEB discloses the 12% promise is a distant memory as we see the percentage increases in all three categories has jumped by a large multiple of the inflation rate as the following depicts!

Time of Use    March 2018    March 2021    % Increase
Off-peak              6.5/kWh            8.5/kWh           30.7%
Mid-peak            9.5/kWh           11.9/kWh          25.2%   
On-peak             13.2/kWh          17.6/kWh           31.8%       

The difference between then and now is simply that back then the Wynne led government was using taxpayer monies to provide relief via the “Fair Hydro Plan” which subsidized rates by 29% (based on my bill) whereas the Ford government is now using taxpayer dollars to provide a subsidy of almost 98% (based on my bill).  It’s simply a case of incurring taxpayer debt to subsidize ratepayers.  Instead of taking money from our after-tax pocket they are incurring it for future taxpayers to pay.

In an interview back in March 2020 Premier Ford in response to the question about why he hadn’t achieved the 12% reduction in electricity rates went on and used the phrase “it’s extremely complicated”.  That phase is very similar to the phrases used by former energy ministers such as Bob Chiarelli and Glen Thibeault as well as the current leader of the Ontario Liberal Party, Steven Del Duca. 

What is obvious from the foregoing is the time has arrived for someone/anyone with basic common sense be appointed to the Ministry and make a serious effort to uncomplicate it!

Perhaps it’s simply a pipe dream!