Pan-Canadian Expert Collaboration Phase 1

Back on October 30, 2018 the Federal Ministry of Environment and Climate Change issued a press release telling us they intended “to partner with independent climate experts to support ambitious action on clean growth and climate change”.

Confronted with the word “expert” takes one back in time to a British comedy.  Benny Hill, of the Benny Hill Show, frequently provided humorous definitions of words in his show and his take on the word “expert” stood out.  Merriam Webster’s first definition of the word is “experienced” and breaks the word into two syllables which are “ek-spert”.  Benny Hill went further suggesting; “ek” is the unknown and “spert” is a drip under pressure therefore an expert is an “unknown drip under pressure.

From all appearances we have far too many experts in politics, bloated bureaucracies (federal, provincial and municipal) and ENGO who exhibit those comedic traits on a regular basis. The 21 organizations who got together, to create the “Pan-Canadian Expert Collaboration” (to partake of the $20 million of tax dollars Minister McKenna promised), are all on the same page;  ie: climate change is the end of the world.  No “experts” with differing views appear to have been invited to join the “Collaboration”!

Award of the contract was obviously slated to align with the views of Minister McKenna and her “climate emergency”.  One wonders if the “collaboration” was in point of fact orchestrated and if so, who was the conductor?  My vote goes to Bruce Lourie!

Reasoning on the foregoing is related to how McKenna endorsed Bruce Lourie’s views disclaiming Doug Ford’s cancellation of the Ontario “cap and trade” tax as noted in the below tweet!

Catherine McKenna 🇨🇦Verified account @cathmckenna “Scrapping cap and trade and the Green Ontario Fund will do nothing to lower electricity rates, what it will do is cause huge disruption and costs to Ontario businesses.” Smart analysis by @brucelourie of the Ivey Foundation nationalobserver.com/2018/06/21/analysis/bruce-lourie-doug-fords-scrap-and-pay-plan-explained …

Lourie’s article in the National Observer appeared shortly after the Ford led Ontario Conservative Party, were elected and the “carbon tax” was about to be killed. Co-incidentally the Ivey Foundation, where Lourie holds the title of President, has provided grants directed to the National Observer.  Mckenna and Lourie were also together as speakers in Ottawa in October 2016 at the Canadian Climate Forum’s annual symposium shortly after the Federal “carbon tax” was announced.  One would assume they are well acquainted and hold similar beliefs in the “climate change” religion.

In the midst of the recent Federal election campaign, Lourie had another article appear on October 18, 2019 in the National Observer noting, amongst other negative comments:  “If Scheer wins” then “leaders who seek to delay action will dig in on dismantling climate policies, ensuring that Canada returns to global pariah status on the international stage.”  Lourie has apparently labelled all conservatives “pariahs’”.

On April 9, 2019 Minister McKenna’s Ministry; Environment and Climate Change Canada, announced the winning bid to create the “new independent climate institute”, was the Pan-Canadian Expert Collaboration. There among the twenty-one (21) names in the “collaboration” was the Ivey Foundation and several others Mr. Lourie either helped to create or presumably supported by providing grants via his position as President of the Ivey Foundation. One example is the “Ecofiscal Commission” (one of 21 “collaborators”) where Lourie also holds an “Advisor” title alongside political luminaries such as, Paul Martin, Michael Harcourt and Jean Charest. Needless to say, the Ivey Foundation made substantial grants to the Ecofiscal Commission to possibly (?) ensure the right message was forthcoming!

The Ivey Foundation is a charity/foundation registered with the CRA. A review of the information filed by them for their December 31, 2018 report indicates they had five employees one of whom makes somewhere between $250,000 and $299,999.  One would assume that individual is the President.

The Ivey Foundation, issued zero (0) tax receipts and did not complete the CRA’s “Schedule 7–Political Activities”.  In the filings with the CRA, charities/foundations are obliged to report; “Amounts provided to other organizations” and to name the organization and the “gift amount”. They must also indicate if it is an “Associated charity” with a simple “YES” or “NO”.  In all cases the 2018 report (and prior ones) of Ivey’s filings state, “NO” to that question!  Was that a true response, particularly as it applies to the Ecofiscal Commission, the grants they received from the Ivey Foundation and the “advisor” position their President holds in the Commission?

Lourie was the key speaker at the York University; Dr. David D. J. Bell Lecture on October 22, 2019 and his biography, appearing on the web-page, outlines some of his creations as well as a few of his past and present executive titles and directorships. It doesn’t however, highlight his myriad connections or influences on politicians in the past or present times.

The President of the Ivey Foundation, by all appearances and actions, is well connected with several of those who received grants from the Foundation and are now part of the collaborating family! Were they, and the other 20 collaborators, chosen because they will recommend a higher carbon tax than the one previously announced?

Remember, as Minister McKenna has stated, we are in the midst of a “climate emergency”, so perhaps, we should anticipate they will look to increase the tax!

Hydro One’s 3rd Quarter 2019 results will make shareholders happy and distribution customers unhappy

Hydro one just released their 3rd Quarter results and net income after taxes increased from $194 million to $241 million or 29.4%.  Net income increased by only $14 million or 6.2% after adjusting the 2018 results upwards for the costs associated with the failed Avista acquisition.

Let’s look at those results by Hydro One’s client base of transmission (generators and local distribution companies or LDC) and distribution (ratepayers).

Transmission Revenue and Income Down                                                                                    What is interesting about their results is it shows transmission revenue decreased by $50 million (down 10.1%) as “peak demand” keeps falling.  Year over year the latter fell by 1,805 GWh (gigawatt hours) or 7.9%.  As a result, net income (before financing and taxes) from the transmission business dropped by $55 million or 19.2% from $287 million to $232 million.

Distribution Revenue and Income Up                                                                                       On the other side of their business Hydro One’s distribution revenue (net of purchased power) was up from $370 million to $403 million for a $33 million (+ 8.9%) gain and the revenue growth translated to a $33 million jump in net income (before financing and taxes).  The latter increased from $120 million to $153 million (+27.5%) year over year.

The jump in distribution income occurred despite the fact Hydro One’s 1.4 million customers reduced their consumption from 6,817 GWh to 6,627 GWh for a decline 190 GWh or 2.8%.  The forgoing means the average delivery cost per kWh increased from 5.43 cents/kWh to 6.08 cents/kWh year over year and amounts to a jump of 12%.   The 12% increase is co-incidentally what we were promised to see as a reduction in our rates by the Ford government.

Summary                                                                                                                                                 While all customers are billed for both delivery and transmission costs, the latter tends to represent a very small charge whereas delivery costs represent (on average) about 30% of your monthly bill.  Hydro One’s delivery costs however, are closer to 40% so it is disappointing to see that portion of the bill for their 1.4 million customers keeps climbing at rates well above inflation.

Getting rid of the $6 million man did nothing to reduce Hydro One’s delivery costs!

Consuming less drives up costs for Class B ratepayers

The IESO (Independent Electricity System Operator) released their September 2019 Monthly Market Report last week.  Ontario’s total consumption was 10.319 TWh (terawatt hours).  Looking back as far as September 2010 for comparison (the year following enactment of the GEA) Ontario consumption in September 2019 was lower than every year since then.  Consumption by Class B ratepayers this past September was down 8.7% (690.000 MWh-750,000 average households’ annual consumption) from September 2018. Class A ratepayers also consumed less (102,000 MWh or 3%) compared to September 2019.

Consuming less means lower costs, right?

The foregoing question/assertion certainly applies to pretty well everything we consume, if the price remains stable.

Due to the perplexity of how the electricity system functions in Ontario consuming less has a limited ability to reduce our costs.  Each and every generation source is basically treated differently in respect to their rank; on access to the grid, pricing (guaranteed or set by the OEB), length of contract term(s), and their perceived effect on global warming!  Both solar and wind generation, as examples of the latter, are granted “first to the grid” rights meaning they rank higher than nuclear plants and hydro generation units.  Additionally, original contract(s) offered prices in 2010 guaranteed for 20 years with large solar at 63.5 cents/kWh and wind at 13.5 cents/kWh along with a 20% guaranteed escalation clause related to increases in the cost of living (CoL).  At the same time IESO must contend with a trading market referenced as HOEP (Hourly Ontario Energy Price). IESO buys or sells generation based on shortages or surpluses to our grid connected markets such as New York, Michigan, etc.   What the HOEP values generation at and what we pay for it via those contracts evolved into what is known as the GA (Global Adjustment Mechanism) ie; contract value minus HOEP = GA.  Contracting for unreliable intermittent generation like wind and solar has made Ontario a supplier of cheap power for Michigan, NY, Quebec and other connected markets as the GA is not a part of the HOEP sale price.

As noted, Class B ratepayers consumed 8.7% less power in September 2019 versus 2018 and IESO reports our all-in cost (GA+HOEP) was $136.97/MWh versus $115.78 in 2018 for a jump of $21.19/MWh or 18.4%!  In the case of Class A ratepayers, because the HOEP fell from $29.94 in 2018 to $14.34 in 2019 they saw a reduction in their cost per MWh falling 7.7% from $77.70/MWh in 2018 to $71.73 in 2019.  The methodology of Class A pricing results in Class B ratepayers paying more of the GA when the HOEP is lower.

The next question one should ask is why is the HOEP lower if we consume less?

That question is related to facts such as, wind and solar generation get “first to the grid” rights.  As noted, September was a low consumption month as are most spring and fall months but that is when wind (in particular) generates the bulk of its power and is surplus to our needs.  The result is IESO is obliged to accept it and sell via the HOEP market or curtail it, which we also pay for.  IESO will also steam off nuclear or spill hydro both of which we also pay for.  When they are selling off the surplus our neighbours may not need the power but if it is really cheap, they will snap it up.  In September, as an example TX (transmission connected) and DX (distribution connected) wind combined was (according to my friend Scott Luft) 948,951 MWh including 141,485 MWh of curtailed wind.  Together the costs of unneeded generation was $126 million. The accepted wind generation was HOEP valued at less than $7.4 million adding $118.6 million to the GA pool. As it turned out accepted wind represented 75.7% of our net exports of 1,067,040 MWh and 50.9% of our total exports of 1,586,880 MWh in September. We clearly didn’t need wind generation in September nor since we started handing out those contracts!

To make the foregoing much clearer a read of Scott Luft’s recent post provides an excellent review of how much wind (accepted and curtailed) he calculated, was not exported.  It is truly shocking to see it is less than 10% in each year going back to 2006. Using September’s costs as the base to calculate how much it has affected ratepayers and taxpayers in Ontario for its output (over 37 TWh) since 2006 is a simple task.

Shockingly it represents a pocketbook cost of over $5.5 billion.

The electricity sector has taken $5.5 billion from the pockets of Ontario’s ratepayers/taxpayers just for wind related contracts.  The $5.5 billion could have actually been used to provide things like; better health care, tax reduction, infrastructure investments, electricity price reduction or flattening which would have attracted investments and created jobs.  Instead, we allowed our provincial government to hand out lucrative contracts to foreign wind and solar developers.  Many of those who rushed here to obtain those contracts have taken our money and sold their projects to our government pension funds and left Ontario for “greener” fields!

What the above shows is the Green Energy and Green Economy Act was a disaster for Ontario and will continue to negatively affect us until the contracts expire or our current government acts to cancel or amend them!

Wind turbines-clearly not needed

Noted in a recent article was the following admission by Robert Hornung, President of CanWEA (Canadian Wind Energy Association); “wind, which tends to generate most of its power at night,”!  His reflection was related to the very strong probability CanWEA will merge with CanSIA and the merger will reputedly produce harmony as solar generates power when the sun shines.

What Hornung failed to admit was wind habitually produces power during low demand times which are a regular occurrence in Ontario during Spring and Fall months.  The month of October is confirming its bad habit which costs Ontario ratepayers dearly.

A recent example of the foregoing occurred on October 23rd when wind was blowing during the night and during the day.  IESO’s “Generators Output and Capability Report” discloses wind was blowing!  Approximately 47,000 MWh of wind was accepted into the grid and about 50,650 MWh were curtailed.  So, wind could have delivered 97,650 MWh when Ontario demand averaged 13,910 MW and peaked at 16,235 MW for the day.  Contracted nuclear at 10,700 MW of capacity could have easily teamed up with some of the 8,000 MW of contracted hydro and supplied all our needs.  During high demand periods in the summer and winter months gas plants can easily supply additional needs when demand exceeds nuclear and hydro’s capacity.

The IESO report also suggests we were steaming off nuclear (and paying for it) and probably spilling hydro (which we also pay for) but IESO don’t disclose either of the latter two events.  To top things off we were paying gas plants to idle (around $2.5 million per day). Many of them were originally contracted to back up wind and solar for when the wind isn’t blowing or the sun doesn’t shine.

The effect on ratepayers, in simple terms, is, we picked up the costs of wind’s generation as well as the costs of curtailment.  We paid $120/MWh (megawatt hour) for curtailed wind and $135/MWh for grid accepted wind.  The total cost for wind (without factoring in costs related to spilled hydro, steamed off nuclear or idling gas plants) on the 23rd therefore was $12,423,000 or $264/MWh (26.4cents/kWh).

When IESO finally published their Daily Market Summary for that day it disclosed the average HOEP (hourly Ontario energy price) was in negative territory at -0.88($/MWh).  It also disclosed Ontario’s net exports (exports minus imports) averaged 1,943 MW per hour so totaled approximately 46,600 MW or 400 MW less than grid accepted wind.

At the CanWEA conference where Hornung uttered his omission he also stated the following:  “This opens up some interesting opportunities for wind for two reasons: 1) wind energy can provide more services to the grid than just low-cost energy, and can support grid reliability if encouraged to do so as regulatory and market frameworks modernize; ”.  The activities on the day this article highlights and most other spring and fall days clearly demonstrate, wind energy is neither, low-cost energy or has abilities to support grid reliability (forced curtailment does)!

What the above clearly shows is the $12.4 million we paid for the 47,000 MW of grid accepted wind was simply Ontario ratepayers/taxpayers being forced to give our money away to NY, Michigan, etc. without the ability to stop it!

The time has come for Hornung to admit all the failings of industrial wind turbines!

Three days of wind and costs skyrocket

The OEB every six months issues a “Regulated Price Plan Supply Cost Report” which is a forecast of things to come in respect to the costs of electricity.  The OEB used to use the report to set rates for the ensuing six months but with the Ford government’s freezing rate increases to the inflation rate its no longer the case.  In the latest report on page 17 for the May 1 2019 to April 30, 2020 period they estimate the individual cost by generation source in a chart.

They forecast “wind” is to cost 14.8 cents/kWh (kilowatt hour) which presumably includes either or both; the cost of “curtailed” generation and the 20% inflation bumper included in the contracts with the development companies.

That 14.8 cents/kWh wind forecast cost was blown out of the water over three very recent days. Wind has this bad habit, during spring and fall in Ontario, to blow harder then it does during high demand days in the summer and winter.  During the three days of October 11, 12 and 13th Ontario’s demand was relatively low, averaging about 311,000 MWh per day.  As if to bless the recent disclosure of Robert Hornung, President of CanWEA, industrial wind turbines were indeed generating lots of power at night but were also generating lots of power during the day.  In total, over the three days IESO reported they generated or curtailed 190,350 MWh for an average of about 63,450 MWh per day (20.4% of average Ontario demand).  Over the same three days Ontario’s net exports (exports minus imports) averaged 60,000 MWh (19.3% of daily demand) and totaled 180,000 MWh.  In other words, IWT generation plus curtailed power exceeded our net exports.

Export Costs: It should be noted Ontario’s ratepayers/taxpayers took a beating on exports as the HOEP (Hourly Ontario Energy Price) market was $1.04/MWh on the 11th, 0.01cent/MWh on the 12th and -$1.97/MWh on the 13th!  What the foregoing means is ratepayers/taxpayers paid $65,000 to offload surplus power. That amount added to IESO’s first estimate for the Global Adjustment (not included in export sales), for October of $178.78/MWh would represent a generation cost of $32,245,000!  Even if we use the lower September GA of $122.63/MWh the cost is $22,074,000.

Wind Costs: Over those three days wind was generating and curtailing power despite the lack of Ontario demand! It has a bad habit of performing when we least need it!  Its performance comes at a substantial cost and the three days in question demonstrated the 14.8 cents/kWh in the OEB report was well under cost.  We ratepayers pay 12 cents/kWh for curtailed wind so the 77,930 MWh that were not delivered cost $9,351,600 and the 112,420 MWh delivered to the grid at a cost of 13.5 cents/kWh or $15,176,700 brought the total cost for wind to $24,528,300 or $218/MWh for what was accepted into the grid.  At 21.8 cents/kWh that is 47% higher than the OEB forecast in their report.

Presumably we also spilled hydro and steamed off nuclear generation over those three days which would have added to the costs but IESO does not disclose that information.  We could also include a large portion of the costs associated with gas plants built to back-up the indeterminacy and unreliability of IWT which would have driven costs higher.

The cost of our exports plus IWT generation and curtailment represents three days of waste.  We must not only pay up for money lost on exporting our surpluses ($22.1 to $32.2 million) but also the cost of wind ($24.5 million) we didn’t need.  IWT generation and curtailment appears to have created the surplus we exported and over three days Ontarians saw $46.6 million at the low end and as much as $56.7 million at the high end extracted from their pockets—for nothing of value!

Ontario’s ratepayers/taxpayers/businesses collectively want to see value for what they pay in taxes or for energy they consume, so let’s stop the waste.

How about it, CanWEA President Robert Hornung, will you now admit;  wind turbines generate lots of power at night and lots of power during low demand periods?

If not, can we ratepayers and taxpayers call on Minister Rickford to fix the mess by declaring: IWT are not “baseload” power and in future pay them absolutely nothing for occurrence’s like we just experienced!

CanWEA’s President finally speaks some truth

Robert Hornung, President of CanWEA, finally admitted at their annual conference in Calgary on October 9, 2019, something about industrial wind turbines (IWT) most of us have known since they first started to appear throughout Canada!

He didn’t suggest they cause health problems from the audible and inaudible noise they generate, nor did he admit shadow flicker has health affects nor did he state they kill birds and bats, including many of them labelled; “species at risk”!  He also didn’t admit IWT have an effect on property values or that it is intermittent or how it drives up the costs of transmitting power through our electricity grids!

What Hornung said: “He says it’s also why members of CanWEA and the Canadian Solar Industries Association will vote in late November on a motion to merge the two organizations, thus promoting the benefits of wind, which tends to generate most of its power at night, and solar, which works only during the day.”  We should suspect his admission about IWT penchant for generating power at night was related to the upcoming marriage of CanWEA with CanSIA, probably the two most expensive sources of unreliable electricity in Canada.

Pushing the merger agenda may well be a key factor to curry favour from politicians in order to ensure they stay on side to contract more wind and solar generation, presumably to resolve the reputed “climate emergency”.  Interestingly they have touted the marriage with what they see as a future child in the form of “energy storage”.  In the latter case they enabled Electricity analyst Kathleen Spees*, a principal with The Brattle Group to augment the gathering’s message.  She stated: “The shape of the future will be anything but circular—instead it will be triangular, with wind energy, solar energy and energy storage each making up one of the three sides,”

A few weeks before the conference an unnamed individual interviewed Rochelle Pancoast, current Chair of CanWEA’s Board of Directors.  Ms. Pancoast is the City of Medicine Hat’s General Manager, Utilities Business Development & Support.  Interestingly enough Medicine Hat identifies itself as “The Gas City” and proudly proclaims it generates its own electricity from gas plants!  Ms. Pancoast in the interview responding to a question said:  “In the shorter term, partnering will be a dominant theme – whether it be in the form of PPAs [power purchase agreements] between suppliers and sustainably interested corporate entities, or through integration of wind, solar, and storage technologies that collectively work to meet suppliers’ and/or customers’ pursuit of low-cost, reliable, and low-carbon energy.” Most of us on the planet would find that comment coming from someone who is the GM of The Gas City’s utilities oxymoronic but as we have all witnessed on many occasions the reputed “climate emergency” has created some very strange output from a variety of people around the world!

So, what Hornung, Spees and Pancoast were implying is they believe the combination of wind, solar and storage may be able to deliver a reliable electricity supply.  What they don’t say is costs for ratepayers will climb immensely as the combined bill for all three sources will easily exceed any of the current costs of supply from nuclear, hydro and gas.  To top that off they don’t suggest what type of “storage” will actually solve their intermittent and unreliable generation.  The “storage” assertion is an unknown unless they presume batteries will cover the times when the wind isn’t blowing or the sun isn’t shining.  It seems as if the three of them are anticipating some shiny things like battery plants** would help politicians buy into adding more wind and solar to our grids!

Co-incidental with the CanWEA conference the World Economic Forum released “The Global Competitiveness Report” and the Toronto Sun carried an article which noted we had again slipped in global rankings.  The Sun article highlighted in particular, Canada “took second place when it came to electricity access, but 69th when it came to the quality of our electricity’s supply.”  The 2015 report had Canada ranked as 13th that year.  Co-incidentally 2015 was the year the Liberal Party was elected to run the country.  If CanWEA and CanSIA are successful in cajoling the politicians into buying into this concept we should expect Canada’s quality ranking will continue its downward decent while electricity prices climb!

With the “quality of our electricity’s supply” falling from 13th place to 69th place in just four years I was reminded of Phillip Morris’s launch of the female cigarette “Virginia Slims” in 1968 with the catch phrase: “You’ve come a long way, baby”.   We sure have but it’s in the wrong direction!

*The Brattle Group have worked closely with the OEB and IESO and were instrumental in the creation of what Ontarians have come to known as the “Time-of-Use” pricing model.                                                                                                                                             **The 100 MW lithium ion Tesla battery’s cost of $90 million for South Australia was just revealed. It will be capable of providing 70 MW of power for 10 minutes and 30 MW of power for 3 hours.  That works out to $880 thousand/MWh if it operates once annually for ten years. Used ten times annually over ten years would reduce it to $8,800/MWh and using it 100 times each year drops it to $880/MWh.

Radio Interview Wednesday Oct. 9, 2019

Tom Harris, Executive Director of the International Climate Science Coalition does a weekly radio show on Wednesdays at 8 PM and he has asked me to be his guest on the next one; Wednesday October 9, 2019.  You can listen to it by clicking on the “LISTEN LIVE” heading at the top of the face page of Think Radio at that date and time!

Link is: http://thinkradio.ca/index.php

If you wish to visit the website of the International Climate Science Coalition you will find it here: http://www.climatescienceinternational.org/

If you want to know more about the ICSC I would suggest you have a look at this short video:  https://www.youtube.com/watch?v=WX_xCaG-RX8

PS: If you miss the show the podcast will be available at a later date on Think Radio.