September 28, 2016
More proof of why Ontario’s electricity bills are rising the fastest in North America
Ontario Energy Minister Thibeault has been the centre of media attention over the past several days for his announcement we will save $2.45 every month because he has “suspended” the Large Renewable Procurement process or LRPII, the result of a directive issued by former Energy Minister Bob Chiarelli to acquire 600 megawatts (MW) of wind and 300 MW of solar capacity.
Premier Wynne’s mandate letter to Minister Thibeault contained directions which were previously tied to a press release issued by his Ministry related to building transmission lines to service First Nations communities. The news release dated July 29, 2016 announced: “Ontario has selected Wataynikaneyap Power LP (Watay) to connect 16 remote First Nation communities that currently rely on diesel power to the province’s electricity grid.”
No mention was made about the cost of the project, only that it would create “over 680 jobs” and “save $1 billion over the life of the project” compared to the “use of costly diesel fuel”. It was subsequently reported the project was a $1.4 billion dollar build and would service 10,000 people in those 16 communities and save $43 million in annual diesel costs. In simple terms that works out to be $140,000 per person and a 32.5 year payback. I am not sure how the government got to the idea of saving “$1 billion over the life of the project.”
To reinforce the Minister’s earlier press release we must presume these extracts from the Premier’s mandate letter are related: “Working within the principles of the recent Political Accord, and upholding commitments to First Nation and Métis communities, to support and participate in new generation and transmission projects, and in conservation and community energy planning initiatives.” And “Expanding transmission to remote First Nation communities in Northwestern Ontario to reduce reliance on diesel-powered generation.” And, “Continuing negotiations with the federal government to secure a fair cost sharing arrangement in support of the remote communities grid connection project.”
Those comments Ontario is moving ahead with the project while counting on the federal government to kick in money. No matter the outcome of Minister Thibeault’s negotiations with the federal government, it certainly appears it will be up to the province to supply the lion’s share of the $1.4 billion. What does that mean? Ontario’s electricity ratepayers will pick up the costs.
It is ironic that the Province is committed to the transmission build but not to building a road to the “ring of fire” estimated to only cost $550 million according to a joint study by Provincial/Federal officials and reported in the Globe and Mail. The road would actually create both investments and jobs for the same First Nations communities and presumably allow cheaper construction of transmission lines while generating new taxes.
The actions of the Provincial government continue to remind me of the recent Cadillac ads which show the car moving forward but everything else in the ad moving backwards.
The time has come for Ontario to move forward with some common sense planning.