Wow! June 2020 Demonstrates Consuming More Electricity Decreases Costs

The IESO recently released their Monthly Market Summary for June 2020 and Ontario’s electricity consumption increased from June 2019 by 3.9% (434,000 MWh) or about what 500,000 average households would consume in a month. The consumption increase was driven by Class B ratepayers who in June 2020 consumed 758,000 MWh (up 10.2%) more than June 2019.

GA for Class A and Class B  ratepayers:     

As a result of the increased consumption, the GA for “B” Class ratepayers year-over-year decreased from $142.11/MWh to $129.14/MWh and the HOEP increased from $4.84/MWh to $11.22/MWh. Class B costs (some costs are partially allocated to taxpayers) dropped from $146.94/MWh to $140.36/MWh whereas Class A consumption dropped (308,000 MWh) but their GA costs increased from $76.67/MWh to $84.89MWh.

Surplus Exports Cost  Less:

The result of increased consumption produced a higher HOEP and that meant we ratepayers and taxpayers lost less money in 2020 exporting our surplus generation than 2019. This past June we exported 181,000 MW less to our neighbours but because the HOEP (market price) was higher we increased our revenue from $8.2 million to $17 million which helped to lower costs even though the 1.5 million MWh we exported were sold, on average, for only $11.22/MWh or 1.1 cents/kWh.

Industrial Wind Turbines (IWT) Generation and costs:

IWT overall (grid and distributor accepted plus curtailed) were basically flat comparing 2019 with 2020 but the curtailed generation was higher in 2019 (138% higher) so we didn’t have to pay for as much wasted power.  Our costs for IWT in June 2020 was about $114.6 million versus a cost of $125.1 million in 2019. Accepted generation for IWT was approximately 17% of their rated capacity in 2020 versus less than 15% in 2019 but in 2020 represented 46% of our export volume ie: it was surplus to our needs!

OEB’s Market Surveillance Panel Monitoring Report  32 

Almost as a coincidence and just a couple of weeks before IESO issued their MMS, the OEB on July 16, 2020 released their 32nd Market Surveillance Report and it has some interesting observations. One that stood out was: “the Panel concludes that much of the long-term investment over the last decade has not been very competitive, imposed unnecessarily high costs on Ontario consumers and removed the transparency of price signals that lead to economic-based decision making.”   One must assume the panel was referencing the McGuinty/Wynne governments creation of the Green Energy Act and the handing out of those lucrative contracts for wind and solar generation to mainly foreign companies at rates well in excess of the market. Most Ontarians believe the GEA was conceived by the Gerald Butts/Ben Chin team as senior advisors and both wound up, coincidently, with the Justin Trudeau led Federal Liberal Party serving in senior staff roles.

Another observation in the OEB report stated: “The Demand Response (DR) Auction also continues to annually procure capacity that is not required to maintain reliability. To date, the IESO has not activated any DR resources in the real-time energy market, although consumers have paid more than $200 million for this capacity.”  Coincidently my friend, Scott Luft of the Cold Air website who monitors IESO’s activities advised me of a tweet saying:  “Last week during Ontario’s heat wave, the IESO declared an Energy Emergency Alert Level 1 on multiple days and twice activated [Demand Response (DR)] resources to meet capacity needs.” So the question becomes, did IESO declare an “Alert Level 1” for the first time ever to justify the $200 million cost paid by us ratepayers?  Scott went on in his e-mail to note: “The average cost of DR capacity for this summer was around $59,725 per megawatt, which is roughly 1/10th of the rate the ICI program costs Class B consumers. As a class B consumer, I’ll take the DR – even with the requisite level 1 “Emergency.

Following on that remark from Scott, yet another observation related to the ICI (Industrial Conservation Initiative) is where the Panel stated: “Finally, the Panel reiterates that the current design of the Industrial Conservation Initiative (ICI) program – in combination with a low-price environment and high Global Adjustment (GA) charges – creates an uneconomic and inefficient incentive to reduce demand when there is ample supply and capacity. The Panel remains of the view that only the cost of peak generation should be recovered through peak demand charges, while non-peak costs should be allocated such that all consumers who benefit from that capacity pay for it.”

The Panel’s recent report reiterates what was contained in their 2018 report in respect to the ICI program which I wrote about in a recent article.  It is surprising the current Minister of Energy, Northern Development and Mines, Greg Rickford has basically done nothing to recognize and change the ICI program and stop the spending on “conservation” initiatives related to reducing consumption by both ratepayer classes.

As June 2020 results demonstrate, consuming more electricity reduced costs for Class B ratepayers as we may not be forced to either export surplus generation caused by wind and solar or pay to curtail them which simply increases the GA and drives down the HOEP market price!

Industrial Wind Turbines Flat-line

My friend Scott Luft posted on his Twitter account how IESO reported wind, on July 21, 2020 at hours  11 AM and the following hour of 12 PM credited IWT with generating:

“2 MW output for 2 hours”.

Image

Noting the foregoing intrigued the writer to have a look at the “peak” Ontario Demand for those two hours.  According to IESO hour 11 had a peak demand of 17,591 MWh and for hour 12 it increased to 17,874 MWh.  For both hours IWT generation represented about 0.01% of demand.

IWT “capacity”* of approximately 4,800 MW represents about 12% of total grid connected capacity and all they could deliver in those 2 hours was 4 MWh or 0.01% of demand!  I suspect they would have drawn more power from the grid than they generated just to keep their lights on in those turbines and their electronics working.

For some reason eco-warriors such as the Gerald Butts’s and Bruce Lourie’s of this world were able to convince the naïve former ruling Ontario Liberals, McGuinty and Wynne, that IWT’s and solar panels were the solution to solving the unproven claims associated with the perceived “climate change” forecasts of the UNIPCC!  The GEA was the creation they believed would save Ontario from global warming by loading up on wind and solar at rates well in excess of the market! Ontario ratepayers know how well that worked out!

The prior McGuinty/Wynne buy-in has cost Ontario ratepayers and taxpayers billions of dollars and will continue unless the Ford led government enacts legislation to cancel the contracts or amend them to stop the bleeding.

*Grid connected wind capacity posted by IESO, for an unknown reason, does not include several larger developments as Scott Luft notes in the tweet cited above.

Ontario is a Bottomless Pit for Class B Ratepayers as the ICI Demonstrates

The Ford Government announced, via a press release, on June 26, 2020 that they were freezing the rates for Class A ratepayers for two years.  That means they will not be required to reduce consumption during peak hours! In Ontario those “peak hours” generally occur during the hot summer months.  Greg Rickford, Minister of Energy, Northern Development and Mines stated: “Today’s announcement will allow large industrial employers to focus on getting their operations up and running and employees back to work, instead of adjusting operations in response to peak electricity demand hours.”

The purpose of the freeze had to do with the fact that Ontario’s electricity consumption had fallen due to the pandemic; meaning our surplus capacity was exacerbated driving down the HOEP (market price), causing hydro spillage, wind curtailment, nuclear steam-off and increasing exports of surplus electricity.  All of the foregoing adds to the bill Class B ratepayers and taxpayers would be required to pay for, due to the reprehensible design of the Industrial Conservation Initiative (ICI) by the former government and the GEA which brought us intermittent and unreliable wind and solar generation backed-up with gas plants.

Despite the obvious benefit of the freeze at this time for both Class A and Class B ratepayers it proved upsetting to Mark Winfield, a Professor of Environmental Studies at York University.  York is the bastion of many eco-warriors, intent on destroying the economy in their push to rid us of any use of fossil fuels.  Winfield holds a Doctorate in Philosophy which he presumably believes qualifies him as a scientist capable of opining on “climate change” and any events emanating from the Energy Ministry!  It is worth noting Merriam Webster’s first definition of philosophy is: “All learning exclusive of technical precepts and practical arts” yet Winfield, for some reason, thinks his doctorate includes those “technical precepts”!

Winfield’s article is labelled “Is Canada’s Ontario an “Innovation Wasteland” for Energy? ” and suggests among other claims; the ICI introduction and “peak demand” reduction resulted in the creation of “the leading edge of innovation in electricity systems around the world”.  While it would be relatively easy to debunk the foregoing and other claims in Winfield’s article the fact is; the creation of the Global Adjustment linked to the ICI program drove up Class B electricity rates in Ontario far in excess of inflation and had a negative effect on both residential households and small/medium sized businesses.  The latter is where 60% of private sector jobs reside and a “technical precept” ignored by Winfield! It is ironic he also ignores the fact York University several years ago installed a 5 MW gas fired turbine and a few years later added another 5 MW gas fired turbine aimed at reducing their electricity consumption and its associated costs.

I will not go to the trouble of further debunking Winfield’s article but must confess I was never a fan of the ICI program.  It is far too simple in concept in that you are only required to pick five (5) “peak hours” out of the 8,760 hours in a year and even if you are close, it will result in significant savings compared to other ratepayers.  If you are one of those Class A ratepayers, simply firing up a gas generator allows you to exit the grid or reduce your demand and signal your electricity distributor you are conserving.  The result is a significant decrease in GA costs reducing their electricity bill for the 8760 hours of the following year.  The savings in costs are allocated to Class B ratepayers.

If Winfield had bothered to do some research he might have discovered the December 2018 Market Surveillance Panel’s Report issued by the OEB (Ontario Energy Board) titled: “The industrial Conservation initiative: Evaluating its Impact and Potential Alternative Approaches”.  Some of the “Innovation Wasteland” he may have discovered in the report was the following:

Information on exactly how much on-site generation or storage has been built in response to the ICI is not readily available. Nevertheless, there is some evidence that suggests such investments are being made. In 2017 and 2018, three Class A consumers made a combined 33 applications to the Ministry of Environment and Climate Change (as it then was) to build a total of 44 MW of natural gas-fired capacity. One of the express purposes for which this new on-site capacity is being built is “peak shaving”, which in turn suggests the purpose is, at least in part, to reduce Global Adjustment costs through participation in the ICI.” At that point Winfield may have understood “natural gas-fired capacity” is fossil fuel based and for decades has been used to generate electricity.

Winfield may also have come across some other “technical precepts” such as: “Ontario currently finds itself in surplus supply conditions, yet the incentive to reduce consumption under the ICI has never been stronger. Perversely, the incentive for Class A consumers to reduce peak demand—by investing in on-site generation capacity or otherwise—is strongest when there is ample supply and wholesale market electricity prices are low.”  What that infers is; the lower the HOEP price the larger the subsidy for Class A ratepayers.

The report also noted: “The Panel estimates that payments to peaking resources make up less than 20% of the costs recovered through the Global Adjustment. The remaining 80% of fixed capacity costs are for non-peaking resources, which Class A consumers use and benefit from during most hours of the year.” To clarify, the benefit for Class A consumers picking those “peak hours” has only a 20% impact in reducing capacity costs but they benefit for the full year penalizing Class B consumers for that other 80% benefit.

Another rather shocking benefit that occurred in 2017 is described in the report as follows: “During the five peak demand hours in 2017, five directly-connected Class A consumers consumed no electricity, meaning they pay no Global Adjustment during the following 12-month period.”  In 2017 the HOEP was 1.58 cents/kWh meaning those five Class A consumers paid that price for their consumption throughout 2018 whereas all Class B consumers paid 11.55 cents/kWh (HOEP of 1.58 cents/kWh + the GA of 9.97 cents/kWh = 11.55 cents/kWh) or 7.3 times more per kilowatt hour!  A clear demonstration there is something inherently wrong with the design of the ICI.

The panel report discloses some history since the advent of the ICI came into force in September 2011 when Brad Duguid was the Ontario Minister of Energy and it brings reality to how much Class B consumers have paid to subsidize Class A consumers.  “In 2011, approximately $300 million in Global Adjustment costs were shifted from Class A to Class B consumers as a result of participation in the ICI, representing approximately 3.5% of the total electricity supply costs for Class B consumers that year. In 2017, the costs shifted had increased to $1.2 billion, representing approximately 10% of the total electricity supply costs for Class B consumers. Since 2011, participation in the ICI has shifted a total of $4.91 billion in Global Adjustment costs from Class A to Class B consumers.”

What the foregoing demonstrates is the ICI is poorly designed and should be scrapped. Minister Rickford should ensure the replacement plan treats all ratepayers fairly. It might also be time to Defund the Environmental Studies Program at York University as they have trouble with actual facts related to Ontario’s electricity sector!

Discussion with Marc Patrone on 960 AM about what the Ford Government might do to start to fix the “electricity” mess

Marc Patrone of NEWSTALK Sauga 960 AM had me on his show this morning to discuss the Ontario electricity sector.   You can hear our chat on the July 14th podcast starting at minute 29 through to minute 39:

Podcasts

It is also available on NEWSTALK CANADA here if you subscribe:

Parker Gallant: How will Ford gov’t deal with green energy scam

 

No “high fives” for Industrial Wind Turbines

Since late June, Ontario has experienced almost two weeks of very hot humid weather resulting in increased electricity demand as air conditioners throughout most of the province became almost a necessity. As a result, IESO’s “Peak Tracker” of high demand hours for the current year as of the morning of July 10th consisted entirely of 10 hours beginning June 29, 2020 with the latest happening at “hour 17” on July 9th. The latter was the highest, so far, in the current year.

Picking the “high five” peak hours plays an important role for Ontario’s largest industrial clients referenced as Class A ratepayers. If they successfully pick the hours and reduce their consumption during that hour they are rewarded with lower rates. Those lower rates have benefited the Class A ratepayers for many years as they avoid paying a portion of the Global Adjustment (GA). The Class B ratepayers have been obligated to pay for that portion of the GA which in turn raises their rates.  The principal reason industrial ratepayers lobbied for lower rates was due to the above market contracts signed with wind and solar companies by the McGuinty/Wynne led government.  In turn the “B” to “A” subsidy is affected by the amount of generation coming from the power produced by those expensive wind and solar contracts as it drives up the GA pot by hundreds of millions of dollars every month.

So a question arising about the recent 10 high demand hours IESO recorded is, how much power did those IWT (industrial wind turbines) generate to alleviate demand on the grid during those hours?

The total Ontario demand over the 10 hours was 224,826 MWh and in those 10 hours wind produced 4,329 MWh or 1.9%!   What that meant is IWT generation was what one would call a “rounding error”.  When demand is high IWT have this bad habit of being absent and in those 10 hours they demonstrated their failure.  The 4,800 MW of IWT produced power at only 9% of their capacity.  Thankfully nuclear, hydro and gas were available and generated the bulk of our demand.  In several of those hours we also depended on imported power from Quebec paying as much as $203.46/MWh on July 9, 2020.

The current # 1 peak hour occurred July 9th ending on hour 17 when Ontario demand reached 24,446 MW.  Nuclear (10,375 MWh) hydro (5,753 MWh) and gas (6,688 MWh) contributed the bulk of the power with wind producing only 389 MWh or 1.6% % of that hour’s demand.  Grid connected solar contributed 217 MWh and the balance was provided by imports (principally from Quebec).

What the foregoing clearly demonstrates is IWT fail to deliver power when needed.  It is a financial burden on all Ontario ratepayers and requires gas generators to be constantly at the ready as their backup, doubling up on the costs!

The Ford led Ontario government needs to deal with the fact that IWT fail to perform when needed and deliver excess power when it’s not needed which IESO then sell for pennies of their cost.

Ontario’s Minister of Energy, Northern Development and Mines should work to cancel those lucrative contracts and/or penalize them for their failure to perform during those “high five” hours and for the many times they produce unneeded power.

Rants about Ontario’s electricity system

Canada Day came and went without parades or fireworks to celebrate the 153rd year of Canada’s birth as the Covid-19 pandemic lock-down kept many of us confined to small social bubbles.  The exceptions were those who chose to defy regulations and participated in anti-racism protests, both indigenous and anti-black ones across the country.  To most it seemed a strange way to celebrate our country’s successes. At least the weather was sunny and very warm in Ontario on July 1st!

Industrial Wind Turbines on Canada Day In Ontario

As is often the custom in Ontario on hot humid summer days, most of the IWT (industrial wind turbines) took the day off so the 4,800 MW of capacity they have was virtually silent.  Had they operated at 100% of capacity they would have delivered 115,000 MWh but instead they only managed to puff out 7,440 MWh and had 400 MWh curtailed (at 11 PM) meaning they operated at a level of capacity of 6.8% including the curtailed MWh.  As the morning broke at hour 9 AM they generated 8 MWh or 0.017% of capacity.  Fortunately, we didn’t need their power as nuclear, hydro and gas easily supplied our needs throughout the day even though total market demand reached 22,641 MWh and Ontario demand peaked at 19,342 MWh or 402,000 MWh for the full day.  Our net exports were north of 45,000 MWh which earned us ratepayers only about $750,000 while costing us close to $7 million.

Hydro One’s 1st Quarter Distribution Results raises unanswered questions

Hydro One announced their 1st Quarter 2020 results on May 8, 2020 and they were pretty unexciting with adjusted earnings of .38 cents per share compared to .52 cents in the comparable 2019 quarter. Examining this further; revenue related to Hydro One’s distribution customers increased $118 million (+ 8.9%) but they reported a decline of $82 million (- 16%), net of purchased power.  The latter reputedly climbed from a cost of $807 million in 2019 to $1,007 million in 2020 or $200 million (+ 24.8%).  Now the odd thing one notes is consumption fell by 254,000 MWh* or 3.3% yet costs increased meaning the average cost per MWh shot up $29.31/MWh from $104.29/MWh to $134.60/MWh or 28.1% and well above the increase reported by IESO!  Interestingly if one looks at Note “23. Related Party Transactions” it states in one line; “Amounts related to electricity rebates” which for 2020 totaled $433 million and in 2019 was $138 million for an increase of $295 million. That suggests in just one quarter (compared to the 2019 quarter) the Ford led government raised the taxpayer support to reduce electricity prices year over year by 213.8% if Hydro One is atypical of all distribution companies.  The foregoing is scary for taxpayers and due to the inferred net revenue decline for Hydro One it possibly signals they will apply for a rate increase which will hit ratepayers.  Additionally, it also raises the question; where did the $295 million extra received for those “electricity rebates” go as it should have kept the cost of purchased power lower than Hydro One claim?

IESO’s limited transparency

On a monthly basis the IESO, responsible for managing the Ontario electricity grid, put out data disclosing Class A and Class B Global Adjustment (GA) rates along with consumption by each Class. IESO also provide what they label as a Monthly Market Summary (MMS) and in it you will find consumption, the HOEP (market price) rate for the month and the Class B, GA. They also provide other data covering exports and imports, market demand, lots of charts showing unavailable capacity, operating reserve prices, etc. etc. and even temperature data.  The big difference in the two reports is in respect to “consumption”, ie “market demand” as for some reason the MMS fails to include DX (distributor connected) generation which are the myriad of smaller solar capacity contracts (2,200 MW), wind generation contracts (600 MW), biofuel, etc. etc. IESO is responsible for settling with the LDC (local distribution companies) for the generation for each of the contracts. Those details are presumably provided by the LDC where those contracts reside.  What that tells us is; if IESO was truly transparent they would include the monthly generation created by those DX connected generators so those of us watching the system wouldn’t have to either make assumptions or wait until IESO publish their Year-End Data.

Wind is wimpy during peak demand hours

So far in 2020 five of the top ten peak hours have occurred in the first week of July and collectively IWT contributed 0.9% of their overall capacity during those five hours and only 1,9% of total demand.  What that implies is IWT without 99.9% back-up from reliable generation sources would leave us all sweating in the dark without air conditioning!

Hydro makes wind and solar look expensive and pretty useless

My friend Scott Luft recently posted an excellent chart on his Facebook page showing: generation by source, costs and curtailment for the first six months of each year starting with 2008.  Looking only at the 2020 data by itself is an interesting exercise in that hydro contributed 19,396 GWh (gigawatt hours), wind 7,140 GWh and solar 2,037 GWh.  It is worth noting hydro provided Ontario’s electricity system with 111.4% more power than both wind and solar combined and the average cost of hydro’s power was $59.24/MWh whereas the average cost of wind and solar was $213.69/MWh or 360% more costly. The total cost of the combined wind and solar generation was $1.961 billion versus $1.149 billion for hydro.  If one goes further Scott notes exports were 11,598 GWh so the combined generation of wind and solar represents 79.1% of those exports.  Those exports generated revenue of $17.87/MWh and if all the wind and solar (9,177 GWh) were a part of those exports the net costs to Ontario’s ratepayers and taxpayers would be approximately $1.8 billion (wind and solar related only) and that is just for the first six months of 2020.

With that cost of $1.8 billion highlighted in the foregoing paragraph I personally hope those of you who read this will forgive my rants and start ranting with me and the others who do the same!

Time for Premier Ford to fix this mess if he wants our economy to recover!

*What 102,000 average households would use over 3 months.

Another Weekend Proves Wind and Solar Drive up Electricity Costs

A post a month ago focused on the $50 million excess cost of renewable energy (wind and solar) on the Victoria Day weekend. Now with summer finally arriving and warmer temperatures, it is perhaps worth comparing the past weekend to that one by examining the performance of wind and solar and its costs.

The inevitable happens in Ontario as demand for electricity during Ontario’s mild spring and fall seasons drops from both winter and summer demand.  As noted in the earlier article average Ontario demand over the three days of the Victoria weekend was only 294,668 MWh whereas over the past weekend (including Friday June 19th) average demand was 401,336 MWh an increase of 36.2%. Demand obviously increases as warmer weather arrives and air conditioners are turned on.  This has been augmented by government and other employees working from home due to the lock-down associated with Covid-19.

The Victoria Day weekend saw wind delivering almost 133,000 MWh (plus 59,100 MWh curtailed) and solar 36,000 MWh causing net exports to soar to 264,000 MWh principally due to their excess generation.

This past weekend net exports were 84,500 MWh as wind produced only 29,500 MWh (9.1% of capacity) and solar 58,200 MWh (31% of capacity).  Increased demand coupled with the drop in wind and solar (combined) generation not only caused our net exports to fall but also resulted in the HOEP (market price) increasing from $1.16/MWh to $17.34/MWh.   What the latter means; we recovered $1.5 million more of our costs despite exporting much less (179,500 MWh less) this past weekend demonstrating wind’s habit of generating power when it’s not needed.

Ontario’s peak demand hour during this recent weekend appears to have occurred June 20th at hour 18 when it reached 19,997 MWh.  During that hour wind generated 226 MWh and solar 124 MWh or 1.7% of demand demonstrating their inability to deliver power when needed.  Needless to say; nuclear, hydro and gas delivered what we needed!

So, the inevitable question is; did increased consumption drive up our average costs as one would expect?  One would assume it would because the average price paid for solar is $448/MWh so the 58,200 MWh delivered cost Ontario ratepayers approximately $26 million and the 29,500 MWh of wind ($135/MWh) added $4 million. That brings the two generation source’s costs to $30 million over the three days and allowing for the recovery of the $1.5 million for their sale means a net cost of $28.5* million or $21.5 million less than the Victoria Day weekend. The foregoing occurred even though consumption was up 36%. Despite the reduction in costs for the recent weekend it still amounts to $9.5 million per day and extrapolated over a year would amount to $3.5 billion which coincidentally is close to what wind and solar’s costs were in 2019 as outlined in a recent post.

The conclusion:

Using more power costs less, when wind and solar generation falls!  That implies wind and solar** should be completely eliminated due to their intermittent and unreliable generation.

*The 87,700 MWh delivered by wind and solar collectively cost ratepayers 324.97/MWh or 32.5cents/kWh.

** They may work for off-grid locations subject to storage availability.

The Ongoing McGuinty GEA Ratepayer Financial Crisis Continues as the OEB releases the 2019 Electricity Supply-Mix

If one is inclined to have a concern about electricity costs and is intent on locating information it is truly disappointing that IESO, who control our grid, issue their annual report with limited information. Even though IESO are responsible for financially settling with all LDC (local distribution companies) for generation from DX (distribution connected) FIT contracted generators they appear unable to  include that generation in their “Year in Review” report.  Their report is released in mid-January.

The IESO report, as noted, doesn’t include DX generation and one must wait another five months or more until the OEB releases what they call; “Ontario’s System-Wide Electricity Supply Mix: 2019 Data”. The OEB released their 2019 review June 18, 2020 and it includes TX (transmission connected) and DX generation by source.  As a matter of interest my friend, Scott Luft does the same thing utilizing IESO Data and estimates, but his reports are issued mere days after the month or year-end.  The OEB report generally confirms his estimates.

So now that the “official” OEB Data is out let’s have a look at some of the information affecting our electricity bills.

Total generation in 2019 was 155.2 TWh (terawatt hours) with nuclear generating 90.4 TWh (58.2%) and hydro 37.2 TWh (24%).  In 2019 we exported 19.8 TWh of our generation to our neighbours in NY, Michigan, Quebec, etc. and they bought it for the average price of 1.83 cents/kWh meaning it generated approximately $360 million in revenue.  If one deducts the exported generation of 19.8 TWh from total generation of 155.2 TWh it indicates Ontario ratepayers consumed 135.4 TWh so nuclear and hydro alone could have supplied 94.2% of all our needs.  Interestingly enough, in 2019 OPG spilled 3.3 TWh of hydro and IESO’s year-end report indicated due to SBG (surplus baseload generation) there were 292 nuclear maneuvers and two (2) nuclear shutdowns. Natural gas plants provided 9.5 TWh so those three sources of generation could have easily supplied all of Ontario’s ratepayer needs.

As noted in the preceding paragraph we exported 19.8 TWh at a very low price but the information from both IESO and the OEB don’t specify the source of the generation exported. If one assumes what we didn’t need was wind and solar (generated and curtailed) the 12.7 TWh of wind plus it’s 2.6 TWh curtailed added to the 3.7 TWh of solar generation coincidentally totals 19 TWh or almost 100% of what we exported for pennies!

Wind and solar costs for 2019 came to about $3.6 billion for which we received only $360 million meaning our exports cost Ontario ratepayers in excess of $3.2 billion and that’s for only one year.  Combined the 16.4 TWh supplied intermittently by wind and solar cost 19.5 cents/kWh or 10.6 times what we sold it for!  Repeating that over the 20-year contract terms granted to renewable energy would remove $64 billion of after-tax dollars from the pockets of ratepayers.

Someone is benefiting from those GEA contracts but it sure isn’t Ontario’s ratepayers!

The Ford government should have utilized the “force majeure” clause in the contracts as soon as the Covid-19 pandemic lock-down was decreed by the Trudeau led Federal government as 2020’s costs will likely be even higher.  The pandemic has resulted in Ontario ratepayers consuming less.

How About Charitable Receipts for Ontario Ratepayers?

Another costly weekend for Ontario ratepayers/taxpayers came and went as we exported 163,566 MWh to our neighbours in NY, Michigan, Quebec, etc. Those MWh were sold at a probable cost to Ontarians of $137/MWh (minimum)* and we received an average of $0/MWh for the sale price meaning the cost to Ontario’s ratepayers and taxpayers was north of $22 million for nothing on June 13th and June 14th!

The above $22 million doesn’t include costs associated with spilled hydro, steamed off nuclear or idling gas plants which also occurred and paid for by us benevolent ratepayers/taxpayers.

Interestingly enough the almost 164 thousand MWh exported was equal to 28.9% of the 566 thousand MWh Ontario ratepayers actually consumed over those two days and equates to what 3.2 million average households in Ontario would consume over two days.  This smacks of bad planning by IESO or perhaps it’s the combined effects of the pandemic and the GEA instituted by the McGuinty/Wynne led governments. The bad planning was influenced by eco-warriors such as Bruce Lourie and Gerald Butts who pushed for intermittent and unreliable renewable energy in the form of wind and solar generation!

So, a high percentage of generation was exported over the two June days and much of the blame can be laid at the feet of wind and solar which often presents itself at times of the year when consumption falls.  Over the two days, wind was generating at around 27% of its capacity and solar at about 31%. Solar somehow even generated a few MWh in the middle of the night during those two days? In total wind generated around 38,500 MWh and additionally just under 20,000 MWh was curtailed, collectively costing $8.1 million. Solar’s (grid connected only) generation of almost 6,700 MWh cost another $3 million.  Together wind (including curtailed) and solar generation represented just over 39% of our net exports and close to 50% of their costs.

Without wind and solar generation, we would have saved just over $11 million and due to a smaller surplus may have actually generated some revenue based on the market driven HOEP (hourly Ontario electricity price) helping reduce costs for Ontario’s ratepayers and taxpayers.

Since implementation of the Green Energy Act and it’s poor planning (no cost benefit study) it has cost billions of dollars to supply our neighbours with cheap electricity.  Those billions of dollars paid by ratepayers and taxpayers over the past ten years have been paid with after-tax dollars by residential and sole ownership businesses so perhaps the Ford government should consider implementation of a charitable receipt for each of us to acknowledge our generosity over the years!

An alternative would be; amend the contracts, via legislation/regulations to eliminate wind and solar’s “first to the grid” rights! We should pay for power, as and when needed, not be forced to accept it when unneeded!

 

*The $137/MWh GA is an estimate as IESO now only uses the rate for the GA imposed by the Ford government set at $115/MWh or 11.5 cents/kWh with the difference accumulating in the Ontario Electricity Rebate program (previously called the Fair Hydro Plan) appearing on electricity bills.

Parker Gallant On Erin O’Toole’s Zero Emissions Proposal

I was on the NEWSTALK SAUGA 960 AM Mark Patrone show June 11, 2020 in respect to Erin O’Tooles’ announced plan to achieve zero emissions for Canada should he ascend to the Prime Minister’s chair.  Marc and I covered some other ground too on recommendations emanating from a few eco-warriors including Bruce Lourie and Gerald Butts.  You can find the interview here:

http://newstalkcanada.wpengine.com/?page_id=376

You can also find in here on the 960 AM podcast starting at 29.10:

https://sauga960am.ca/podcasts/