Ontario Power Generation report: waste and loss, more cost to consumers

Spilling, constraining, steaming off–Ontario’s surplus power situation is costing millions

August 14, 2016

Ontario Power Generation (OPG) just released their second quarter results and if you read the news release quickly you might think everything is wonderful — but it’s not.

OMA (operations, maintenance and administration) costs were up $59 million (9.1%) for the quarter compared to 2015, net income was down to $132 million from $189 million in the comparable quarter, and OPG are now the proud owners of Hydro One shares as this excerpt from the quarterly report indicates.

“In April 2016, OPG acquired nine million common shares of Hydro One at $23.65 per share as part of a secondary share offering by the Province through a syndicate of underwriters. The acquisition was made for investment purposes to mitigate the risk of future price volatility related to OPG’s future share delivery obligations to eligible employees under the collective agreements with the PWU and The Society renewed in 2015.”

The Hydro One share acquisition was of course one of the “net-zero” wage settlements touted by the Ontario Liberal government, and this one made specifically by former Energy Minister Bob Chiarelli when the announcement of a settlement with the employees at OPG was made.

Paid to waste power–and you pay them to do it

OPG also disclosed in the news release that they were again forced to spill hydro power which is normally sold into the grid for about 4.4 cents per kilowatt hour (kWh). The amount they spilled in the quarter was 1.7 terawatts (TWh) and 3.4 TWh for the first six months, compared to 1.5 TWh in the comparable 2015 six month period.  If that information makes you feel bad for OPG, don’t — they are paid the same for spilling hydro as for delivering it to the grid.  A change in regulations by the government created the “pay for spilling” situation.  The 3.4 TWh spilled could have supplied about 750,000 “average” households meaning, we wouldn’t have needed other much more expensive power such as intermittent and unreliable wind and solar.

The cost to ratepayers for the spillage of the hydro is about $150 million and will wind up in our electricity bills under the Global Adjustment charge.

While OPG were busy spilling hydro, we were also curtailing wind in the first six months of this year; my friend Scott Luft (http://coldair.luftonline.net/) keeps a record of those curtailments. Curtailments for the first six months on his chart were estimated at 1.245 TWh, and have already surpassed IESO reported curtailments for the whole of 2015 of .733 TWh.   The latter cost ratepayers about $88 million at the reputed $120 per megawatt (MWh) wind generators are paid for curtailment.   Curtailment costs for 2016 so far are about $150 million.

There were other wastes of generation and ratepayers money in the first six months of 2016 too as Bruce Power was frequently asked to “steam off” nuclear generation at two of their units, but no disclosure is yet available to tell us how much. In 2015 it amounted to .897 TWh which cost ratepayers about $60 million; it is probably more in 2016 as demand is down.

So ratepayers for just the first six months of 2016 will pick up the costs for OPG buying Hydro One shares, spilling hydro, curtailing wind, and steaming off nuclear without one kWh delivered to the “average” household despite the ratepayers responsibility for costs of about $600 million.   We also picked up costs to promote conservation which was probably north of $200 million for the six months.

Ontario’s electricity customers should be “steamed” about the increasing waste we continue to pay for.

© Parker Gallant

 

And the winner is : Hydro One! Most expensive residential power rates in North America

Transmission System ProjectsUntil recently the only jurisdiction in North America with higher all-in residential electricity rates than Ontario was Hawaii. The website for Hawaiian Electric in a media release March 14, 2016  bragged about their electricity rates being at a six-year low, even though Oahu had an effective rate of 22.6 cents per kilowatt-hour (kWh) and that rate included their distribution costs.

The title for most expensive rates now belongs to Hydro One, whose low-density clients pay 25.9 cents per kWh and medium-density clients pay 22.6 cents per kWh effectively, in a tie with Oahu. Add in the HST and the price jumps to over 27 cents per kWh for low-density ratepayers.

Hydro One’s website has a chart outlining their Delivery Rates for “Medium” and “Low Density” ratepayers — the differences are significant compared to “Urban High Density”.  As an example, the Distribution service charge for medium-density is $8.02 higher per month ($96.00 annually) and $20.46 higher ($245.00 annually) for low-density ratepayers.  On top of that the claimed “line losses” for low-density ratepayers is almost double that for urban ratepayers at over 10%. That means people are charged for kilowatt hours they didn’t consume.

Hydro One’s definitions of Medium and Low Density are: Medium Density – contains 100 or more customers, with at least 15 customers for every kilometer of power line used to supply energy to the zone. Low Density – the remaining area not covered by Urban or Medium Density areas.”

It’s not clear exactly how or when densities are reviewed to determine whether the rate classification should change as it is not outlined in OEB’s approvals for rate increases.

27 cents/kWh for the average user in Ontario today

Now examining just the delivery costs for the three “average”1. residential ratepayer definitions,  Urban customers pay 6.6 cents/kWh, medium-density pay 9.05 cents/kWh and low-density 12.55 cents/kWh.  The latter is a higher cost per kWh than the electricity supplied and as noted above combined with the cost of electricity and HST brings the price to over 27 cents/kWh for the “average” residential low-density ratepayer.

Looking back to an Ontario Energy Board (OEB) ruling on March 15, 2005 in respect to increased Hydro One Distribution rates, the OEB granted them rate increases related to regulatory assets and conservation spending.  The calculation of their delivery rates from the OEB’s approval disclosed:  urban customer rates were set at 3.4 cents/kWh, medium density at 4.25 cents/kWh and low density 8.2 cents/kWh.

Since then, delivery rates from Hydro One have jumped 94% for urban, 113% for medium-density and 53% for low-density ratepayers in that 11 years.

Not stopping here

We should expect more OEB-approved increases.

According to Hydro One’s annual report, the “net-zero” settlement claim with their workers will shortly become a submission for a further rate increase, that will again raise delivery rates as this excerpt from the Annual 2015 Report indicates: “Share-based Compensation-The Company recognizes costs associated with stock-based compensation in a regulatory asset as management considers it probable that stock-based compensation costs will be recovered in the future through the rate-setting process.”

No need to wonder what is causing “energy poverty”2. in Ontario — all you need to do is examine the books of Hydro One, their submissions to the OEB, and the blessing of all their requests by the OEB.

© Parker Gallant

August 10, 2016

  1. The average “residential” ratepayer is classified by the OEB as consuming 750 kWh per month or 9 megawatt hours (MWh) annually.
  2. Energy Poverty is generally defined as spending 10% of household income on home energy as this article link to the Homeless Hub notes: http://homelesshub.ca/toolkit/subchapter/what-energy-poverty

The Hydro One survey: asking for the answers they need

Image result for image house no lights

If you are a Hydro One customer, you received an insert with your June 2016 bill suggesting they are really interested in your feedback via an IPSOS (“a global independent market research company ranking third worldwide among research firms”) survey. The stated intent of the survey was to help Hydro One develop “a five-year plan” for their electricity distribution system.

Of the 25 questions on the list, the bulk were dedicated to seeking information on your personal status including your gender, age, employment status, income level, education, where you lived and the population of the municipality, if you paid the bill and if you were a seasonal, residential or small business customer. The few questions pertaining to information that might (?) assist them in any planning exercise was related principally to how much you might be willing to pay for a reduction in the number and longevity of “power outages”!  As an indication the word “outages” can be found 20 times in the survey and in almost half of the questions.

The survey finishes with choices asking you to define just how much you would be willing to pay to reduce both the frequency and length of outages.  As if to emphasize this point the survey tells you Hydro One has more and longer lasting outages than other distribution companies operating in the province.

Just pay up

Closing in at the end of the survey they offer you a voting choice to maintain both the number of outages and their length by paying more money or paying even more money to allow them to achieve a reduction in both the number of outages and their duration.

Throughout the survey there were several charts presumably meant to educate ratepayers on the role Hydro One plays in respect to delivering electricity to our homes to allow us to turn on lights, cook our meals, wash our clothes, etc.  That’s atypical for all local distribution companies (LDC) but Hydro One wears two hats and the survey appears to mix them up by providing ambiguous information related to Hydro One’s other business, which is the transmission of electricity from generators to all LDCs.

As an example of this the survey notes: “While Hydro One is involved in both transmission and distribution of electricity our focus today is on the distribution portion of Hydro One.”

On the next page of the survey, however, the chart used to emphasize the focus of the survey claims 60 distribution companies as customers. While they are customers of Hydro One they are not “distribution” clients, and instead are customers of their “transmission” business.

Further on in the survey they attempt to make the people responding to the survey aware of what causes their power outages and duration.   They include two charts on the reliability issue and the second chart attempts to explain the cause of the outages.  Interestingly enough, they note that 16% of the outages are scheduled (to replace equipment) and 19% where they state “sometimes Hydro One crews can’t determine the exact cause of an outage”.  So, collectively, 35% of the outages are either caused by them or some unknown force — yet they believe they can reduce outages and shorten them … if we just give them more money!

Hydro One suggests that, just to maintain the current situation of outages and their duration over the next five years, they need us to provide them with approximately $500 million — even more if we want outages reduced.

Ask the people whose lights are off

Hydro One says the survey’s results will allow them to apply for a distribution rate increase for a minimum of $2 per month in year one, growing to $10.00 per month by year 5. Based on a review of past applications for rate increases by Hydro One, we should expect the Ontario Energy Board will bless the application no matter how bad the survey results are.

If Hydro One really wanted to hear “from everyone” they should perhaps poll the social agencies and their residential customer base, in a manner that is not meant to manipulate responses to guarantee them the answer they seek.

The many Ontario residential electricity customers now living in energy poverty might not give them the answers they want.

Parker Gallant,

August 8, 2016

The Hydro One survey is now closed. A copy of the questions is here: Hydro One Survey

IESO’s aim to be transparent reveals bad news for ratepayers

The Independent Electricity System Operator (IESO) is trying to become “transparent” as they now disclose consumption by the two classes* of Ontario ratepayers.  Along with consumption data they also disclose what each class, “A” and “B,” pay for the Global Adjustment (GA) component by month.

The Class A ratepayers were formerly customers with a peak demand greater than 5 MW, but that changed in June 2014 as noted in an IESO document:   “The change to the ICI expands Class A eligibility to customers with a peak demand greater than 3 MW and less than or equal to 5 MW.” (Class “B” is, basically, you.)

IESO disclosed that in the first six months of 2016, total Ontario consumption was 69.284 terawatts (TWh) with Class A consumption of 13.834 TWh (19.96%) and Class B consumption of 55.450 TWh (80,04%).  The total GA was $6.401 billion, and Class A customers paid 12.2% ($781.8 million) and Class B customers 87.8%  ($5.619.4 billion).

What that means: Class B customers subsidized Class A customers in the first six months of 2016 by picking up $496 million of the GA costs.

For the comparable period in 2015, total Ontario consumption was 70.823 TWh. In that six month period Class A consumption was 12.477 TWh (17.6%) and Class B was 58.346 TWh (82.4%).  The GA was $4.604 billion with Class A paying $441 million (9.58%) and Class B $4.163 billion (90.42%).  So, the Class B subsidy to support Class A industrials in 2015 was $369 million.

Use goes down, rates go up

It’s obvious: Class A consumption increased year over year by 1.357 TWh, whereas Class B consumption declined by 2.896 TWh. One would assume the almost 5% decline in consumption by Class B ratepayers would mean an upcoming decrease in the electricity rates come November 1, 2016.  Alas, a decrease does not appear to be on the horizon!

IESO also just released the June 2016 “Monthly Market Report” and on page 26 of the report they provide a six-month weighted average of the GA, hourly Ontario energy price (HOEP), transmission costs, etc., for the January 1st to June 30th period for Class B ratepayers.   The “weighted average” (removing the DRC or Debt Retirement Charge) per megawatt hour (MWh) is $127.79/MWH versus a weighted average for the first six months of 2015 of $111.92/MWh — resulting in an increase of $15.87 per MWh or 1.6 cents per kWh.  Not included in the above is any additional delivery costs as a result of rate increases for your local distribution company, including Hydro One who are currently seeking another increase, even though they received one in 2015 increasing their delivery rates.

A 14% jump year over year

The Class B increase is a 14.2% year over year jump in costs (for the electricity line only) paying for: contracted generation, conservation programs, curtailed generation, spilled hydro, export sales losses1.: etc. etc.  If the increase prevails for the next few months it will reflect itself in the OEB’s consistent and semi-annual announcments of rate increases (mid October). The anticipated increase will be paid by Class “B” ratepayers at an annual cost of $144.00 (plus HST) for the “average” ratepayer consuming 750 kWh per month and will start on November 1, 2016.

Effectively what the Ontario Liberal government has done is to create a subsidy for Class A ratepayers by picking the pockets of Class B ratepayers in order to protect jobs that might disappear if those large industrial companies decide to pack their bags and move elsewhere.

To sum up: Class B ratepayers are picking up “employment insurance” costs that might embarrass the Liberal government just like when Xstrada moved their refinery operations to Quebec back in 2010 due principally to high electricity costs. That caused the loss of 670 direct jobs and as many as 4,000 jobs, according to union groups.

The misguided focus of the Wynne government on unreliable and intermittent wind and solar generation has hit Class B ratepayers particularly hard, and calls on Ontario’s low and middle income taxpayers to pick up the subsidy cost to retain jobs while simultaneously creating more energy poverty.

It’s time to stop the train before Ontario goes over the cliff!

© Parker Gallant,

August 1, 2016

 

* Effective January 1, 2011, an amendment to Ontario Regulation 429/04 established two classes of consumers: Class A consumers, with average monthly demand greater than 5 MW, and Class B consumers.

  1. Net exports for June 2016 were 1,054,080 MWh and generated revenue of $19.7 million at the average HOEP of $18.69/MWh but cost ratepayers $140.36/MWh meaning the cost to ratepayers for those net exports was $148.3 million creating a loss of $128.2 million for the month.

 

Ontario’s costly electricity conservation program slams customers

On April 14, 2016 the Ontario Energy Board (OEB) issued a notice that electricity rates would rise effective May 1, 2016. The OEB also announced that they redefined “average” consumption for residential customers.

The explanation for the rising rates was that Ontarians hadn’t consumed enough electricity during the winter months, so the OEB needed to recover the cost of what we didn’t use.   Sure sounds like conservation planning failed to realize that a reduction in consumption would result in …  lower consumption!

The OEB told us the average residential ratepayer now consumes 750 kilowatts (kWh) monthly, a drop of 5.2% (.74% per annum since 2009) or 50 kWh per month. That’s a change from the previous 800 kWh (9.6 megawatt hours/MWh annually) set in 2009. The OEB report went on to claim it all had something to do with the former Minister of Energy’s “Conservation First” vision.

The OEB’s report stated, “According to the IESO, conservation efforts achieved 1,184 GWh of cumulative energy savings among residential customers from 2011 to 2014.”   The 1,184 GW would suggest a savings of about 250 MW of capacity producing at 54% of rated capacity.  The estimated levelized cost of electricity (LCOE) from a combined cycle gas plant of that size is about $200 million according to the U.S. Energy Information Administration. That’s a far cry from the cost to Ontario ratepayers.

With approximately 4.9 million household connected to the grid in Ontario, the reduction of 50 kWh per month suggests a drop in demand of 2,940 GWh (gigawatt hours), or close to three times what the OEB claim. The remaining 1,756 GWh drop is ignored.

If we look at the “Minister’s Message” conveyed in the referenced Conservation First document from December 2015, one of Mr. Chiarelli’s messages was:  “Ontario has already made great strides in reducing electricity use. From 2005 to 2011, families and businesses across this province conserved enough to reduce demand by more than 1,900 megawatts, the equivalent of powering more than 600,000 homes. Investments in conservation allowed Ontario to avoid building new capacity that would have cost almost $4 billion, equivalent to four peaking natural gas generation plants.”

To put the foregoing message in context, 600,000 homes (at that time) would consume 5.7 million MWh (megawatt hours), meaning the 1,900 MW he refers to would only produce power at 34.2% of rated capacity. The 1,900 MW referenced by the former Minister, Bob Chiarelli, running at 100% of capacity could produce 16,644,000 MWh.  If they produced 5.7 million MWh, their capacity value would be 34.2% of capacity, which coincidently is about what the newer models of industrial wind turbines (IWT) are expected to produce annually.

It is perhaps also coincidental that about 1,200 MW of intermittent, unreliable power generation from wind was added to the Ontario grid from 2005 to 2011. If those 1,200 MW generated at only 30% of their capacity the cost to Ontario ratepayers is about $419 million annually, and $8.4 billion over 20 years.

Another claim in the Conservation First document was: “Between 2006 and 2011, investing $2 billion in conservation ($333 million annually) allowed Ontario to avoid more than $4 billion in new supply costs.” That math is really simple: $2 billion divided by 6 [years] = $333 million annually.

Another interesting sidebar found in “Conservation First” is this: “Since 1990, average household electricity consumption has declined by almost 25 per cent, representing about $350 in savings each year for the average household, based on current electricity costs.” 

Why the ministry picked 1990 is a mystery; it’s actually embarrassing! To explain, the following comes from a 2005 report prepared for the OPA: “Usage per household (intensity) fell from 12,474 kWh annually in 1990 to 10,445 kWh per year in 2003 (870 kWh per month).”

To put that into context, the decline in annual average household consumption for that period was 16.3% or 1.2% per annum, but former Energy Minister Bob Chiarelli actually brags about a 5.2% drop or a .74% annual decline.

Use less power, pay more: it’s Ontario

Needless to say, the latter decline hit ratepayers’ pocketbooks much harder than the bigger decline (1990 to 2003) and one would be hard pressed to defend the claim about $350 in savings each year, made in Conservation First. Unless, that is, you note the statement at the end of the claim which says “based on current electricity costs”.  Even then, the claim is not defensible!

What one should take from all this is that the money spent to convince us to conserve since the Ontario Liberal government came into power in 2003 has not achieved that claim or the one suggesting“for every $1 invested in energy efficiency, Ontario has avoided about $2 in costs to the electricity system.”

With that in mind one should ask, why would the average 1990 annual consumption of 12,474 kWh have cost $536.38 in 2002 (OEB Historical pricing) and in 2016 cost $1,564.50 (including HST of $179.99) for just the electricity?

If you consumed 9,000 kWh in 2016 (the new “average”) you are paying $1,128.80 (includes $129.80 for HST) annually for just the electricity!

To sum up: the Ontario Power Authority contracted for 1,200 MW of IWT capacity from 2005 to 2011 adding $400 million annually in generation costs, almost 2,000 MW of solar adding $1.3 billion in annual generation costs (generating at 15% of capacity), $2 billion on energy conservation programs ($333 million annually) and $2 billion on smart meters to allow imposition of time-of-use pricing.

Conservation spending, renewables boost electricity bills

Over those six years, increased ratepayer commodity costs were driven by adding intermittent and unreliable renewable capacity and conservation spending, collectively totalling $2 billion annually (not including smart meter spending) representing an increase of $461.00 (includes $53.00 HST) per annum per average household.

Since 2011 additional contracted renewables and conservation spending have further driven up the costs despite reduced consumption of 27.8% (3,474 kWh) since 1990 and the cost of electricity still went up.

Reduced consumption increased the “average” bill 110.4% or $592.42 since 2003 — not the $350.00 savings.

(c) Parker Gallant

July 27, 2016

 

Open letter to Energy Minister Thibeault

This post first appeared on Wind Concerns Ontario’s website, at windconcernsontario.ca

While concerns about Ontario’s electricity bills mount, with families increasingly finding it hard to pay the “hydro bills,” Ontario’s new Energy minister revealed in a Global TV interview that he doesn’t know that the situation is a crisis … in fact, he doesn’t know much about the entire portfolio. Here’s a fact: wind power in Ontario is less than 5% of the power supply, yet accounts for 20% of the bills. And, Ontario is exporting huge amounts of power while paying wind power generators to “constrain” production.

Parker Gallant this week sent a letter to the new Energy Minister Glen Thibeault, with an earnest offer to help, as a private citizen.

The Honourable Glen Thibeault, Minister of Energy,

Legislative Building, Queen’s Park, Toronto ON, M7A 1A1

Dear Minister Thibeault:

I was intrigued with your interview by Shirlee Engel of Global National and your humble admission that you still have much to learn about the portfolio that Premier Wynne handed you.   Just to somewhat set your mind at ease I have been observing the Ministry of Energy and its complexities for six years and I too, on occasion, have doubts of my knowledge and understanding of the sector.

One thing I noted during the interview was your responses were not always factual perhaps reflecting your belief that your predecessors or the Ministry staff were, and still are, always correct. For example, you answered one of the questions on electricity rates by saying our “rates will rise 1.7% over the next 15 years”.

You may or may not be aware that when George Smitherman held the “energy” portfolio and shortly after he introduced Bill 150, the Green Energy and Green Economy Act (GEA), he appeared before the Standing Committee on General Government in 2009 and said this:

“We anticipate about 1% per year of additional rate increase associated with the bill’s implementation over the next 15 years.”

The Ontario Energy Board (OEB) says the “average” rate as of May 1, 2009 for electricity alone was 6.07 cents per kilowatt hour (kWh) and today, the OEB reports the “average” rate seven years later, as of May 1, 2016 was 12.10 cents/kWh. The increase of 6.03 cents/kWh is a 99.3% increase — not the Smitherman forecast of 7% for that period.   In respect to delivery costs, Hydro One’s have increased by over 100% since 2009, and all of those increases were approved by the OEB.

Your predecessor Minister Chiarelli also made predictions. A year ago in an interview with the Windsor Star he said, “Rates are going to continue to go up everywhere. There was a blip in rate pressures because of the investments that we made, but starting in 2016 that will be flatlined very significantly.”

The electricity rate actually increased by 10% since his prediction …

Read the full letter here: Open letter to Energy Minister Thibeault July 2016

How Ontario is walloping business

This article first appeared August 2015 in The Financial Post.

Over the past several months there has been a constant din of noise from all business segments in Ontario about the high price of electricity and its effects. Electricity prices have risen as they have absorbed the high costs of 20-year contracts for renewable energy in the form of wind and solar as additions to Ontario’s electricity grid. Ontario currently has a huge surplus which results in as much as 20 per cent of our generation exported at fire sale prices. Couple that with a drop in demand, annual spending of $400 million on conservation messages, smart meters that allow time of use (TOU) pricing and the Hydro One, OPG and other Ministry of Energy employees enjoying wages and benefits that outstrip the private sector means electricity bills for all segments of businesses and households are now a drain on the economy versus an attraction for new business and the jobs they might create.

The foregoing recently manifested itself in a report from the Ontario Chamber of Commerce entitled: “Empowering Ontario: Constraining Costs and Staying Competitive in the Electricity Market.” The report stated soaring electricity prices would cause one (1) in 20 Ontario businesses to shut their doors within the next 5 years. The report didn’t suggest how much electricity those 5 per cent of businesses consume or how many jobs would be lost but it should represent a concern to the ruling Liberal Party of Ontario. Should the scenario play out it would also result in a revenue drop for generators, transmitters and local distribution companies. Due to how the electricity sector operates in Ontario a revenue drop results in rate increases to all remaining Ontario businesses and residential households.

The Chamber was not the first to note the problems with high electricity costs, as the Association of Major Power Consumers of Ontario (AMPCO) raised its concerns in a May 2015 release of its “Power Market Outlook” and the president was quoted in the media referencing large Ontario industrial concerns: “Not only are they paying very high costs for the commodity but they’re paying some of the highest delivery rates … so it’s not just a commodity cost problem, it’s not just a renewable energy or coal phase-out problem.”

The above concerns were expressed despite the fact AMPCO members qualify as “Class A” ratepayers, meaning they get a break on their rates as part of the Global Adjustment which finds its way to residential and small businesses (Class B ratepayers) who subsidize the reduction of Class A rates.

A mid June 2015 C. D. Howe study, noted: “Class B consumers are paying more in GA charges so that Class A consumers can pay less. The panel estimates that the new GA formula resulted in Class A consumers paying $422 million less in 2012 than they would have paid under the former formula. From a policy perspective, the relevant question is – is society better off?”

The Canadian Federation of Independent Business (CFIB) also expressed its concern in relation to electricity prices on “small businesses” in April, noting: “The situation for many small business owners is dire, said CFIB’s Ontario vice president Plamen Petkov. The advocacy group, which represents 42,000 small and medium-sized business, has been asking the provincial government to provide relief for businesses for years.”

The Canadian Manufacturers and Exporters in their January 29, 2015 “pre-budget” report submitted to the ruling Wynne led Ontario government also expressed concern about electricity rates:

“Competitive electricity rates are fundamental to the success of Ontario’s manufacturing sector and our economy. Despite progressive reforms including the demand based allocation of the global adjustment for large volume users, Ontario has among the highest electricity rates in North America.”

The CME further stated: “The only path forward for Ontario is to adopt a manufacturing action plan with an industrial/electricity rate as a core component.”

Another association referencing the cost of electricity to their activities is the Ontario Mining Association which on May 11, 2015 reported: “Jurisdictions with higher mining tax rates have lower electricity prices and government cost-sharing on infrastructure. A recent report indicates that exploration and mining costs are particularly inflated in the North, where companies need to invest in lacking, but essential infrastructure such as ports, power plants, winter and permanent roads, and accommodation facilities.”

And the Ontario Forest Industries Association in its January 9 [2015] pre-budget submission to the Ontario government noted: “As a primary resource industry, forestry is an energy-intensive and trade exposed sector. The government has introduced a number of programs that have provided some relief from the steady rise in electricity pricing. However, given the government’s own projections in the recent Long Term Energy Plan these benefits are quickly being erased, along with the small competitive advantage they bring.”