MaRS Discovery District lives on Government Grants and miss Fundraising Targets by Miles

The MaRS Discovery District (MDD) is a registered charity owned by the Ontario Provincial Government. MDD was one of the major issues (together with the expanding electricity mess) that resulted in turning the majority McGuinty led Ontario Liberal Party in the 2011 election into a minority!  MDD was conceived in “2001 to develop a world-class innovation and convergence centre (the MaRS Centre) in Toronto dedicated to improving Canada’s economic prosperity from innovation in the life sciences sector.”

MDD didn’t get rolling until the Liberals gained power in 2003 but from that point on MDD took off with incredible support from Provincial taxpayers. As evidence, Provincial support to the end of 2011 was in excess of $150 million and reviewing the 10 years from 2010 to 2019, MDD received $228 million in provincial funding as well as $9.4 million in Federal funds. Actual donations, for which MDD issued tax receipts, were a paltry $4.6 million or an average of $460K annually for those 10 years.

MDD had originally arranged financing for their Phase 2 expansion via IO (Infrastructure Ontario) another provincial entity established by the McGuinty led government but it was never clear* how the $235 million they arranged to borrow via IO would be able to pay the estimated cost of the building of $344 million.  As it turned out IO’s 2015 annual report noted: “The Loan receivable from the Medical and Related Sciences (MaRS) was transferred to the Ministry of Research and Innovation on March 31, 2015.”  The money supplied by the Provincial government at that time reached at least $400 million to cover the expansion.  As time went on and the building was completed Brad Duguid, then Ontario Economic Development Minister, was finally able to announce MaRS had  “completed a $290-million private financing of its west tower building project, which has enabled it to repay three-quarters of the nearly $400-million in loans received from Ontario to complete the stalled project.”  The Globe and Mail carried the story on February 9, 2017. Ironically one of the “premier” tenants in the Phase 2 building is none other than Public Health Ontario (PHO) an outgrowth of the 2003 SARS epidemic! PHO is now guiding the Ford led government on the Covid-19 pandemic!

Just months before the foregoing announcement the Globe ran an article stating: “The long-time CEO of Toronto’s MaRS Discovery District, Ilse Treurnicht, has informed its board she will be stepping down as of June, 2017, ending a 12-year run at the head of the non-profit innovation hub funded primarily by the province.”  If one looks at the “Sunshine list” it is obvious Ms. Treurnicht was extremely well paid particularly when one realizes that she was the CEO of a “charity”! In most years she was paid over $500K.  Comparing her salary to the average annual tax receipted donations of $460K indicates they didn’t even receive enough to pay her salary.  From 2010 the number of employees at MaRS grew from 51 to 211 and compensation costs in 2019 were $23.5 million meaning the average salary for all employees was $111,000!

The foregoing is humorous as when MDD were finally able to arrange partial private financing for their Phase 2 expansion and repaid the Province $290 million of the $400 million of debt they had incurred, Ms. Treurnicht was quoted in a Globe article and presumably the reporter obtained all of the following information from her in addition to her quote.

When the building is fully occupied later this year, it will generate about $20-million in annualized net operating income, enough to make it self-sustaining, MaRS CEO Ilse Treurnicht said.

MaRS will now focus on fundraising, with a goal of bringing in more than $50-million from private donors for programming to help startups. MaRS board members have personally pledged close to $7-million of that amount.

“It’s really exciting because we now have what we always needed – long-term stable financial base for the infrastructure of Mars,” Ms. Treurnicht said.”

MDD have recently released their March 31, 2020 Annual Report but haven’t filed it with the CRA.  Nevertheless, there are parts of the report that make for interesting reading including the fact they once again they finished their year without showing a profit.

What is also interesting is reading the auditor’s notes which indicate their realty and other holdings.  Note 1 tells us about “MaRS Phase 1 Investment Trust, MaRS Phase 1 Inc. and 2550106 Ontario Inc.” as well as “Phase 2 Investment Trust and MaRS Phase 2 Inc.”. They note those realty holdings are “Ontario for-profit” companies.  Other “for profits” owned by MDD include: MaRS Discovery Enterprises Inc., MaRS Catalyst Fund and MaRS 101 Investments. The “not for profits” under the MaRS wing are; MaRS Investment Accelerator Fund Inc. and MaRS Discovery Services Inc. The latter owns 100% of MaRS 101 Ventures and 100% of MaRS Catalyst General Partner Inc. There are companies, etc. MDD claim an interest in but for the sake of brevity let’s stop there.

After reviewing the “not-for-profits” and the “for-profits” owned by a “charity” owned by the taxpayers of the Province of Ontario one wonders; did the Kielburgers’ get their WE to ME organization abilities from the former Ontario Liberals who for 15 years were running the Province?  Just saying!

In reviewing the 2018 and 2019 CRA filing’s for MDD the $50 million goal of donations, cited by their former CEO, Ms. Treurnicht as noted above, appears to be “pie in the sky” as receipted donations in 2018 were $704K and in 2019 were $538K.  That’s a big miss by any planning standards and brings to light an article Peter Foster had in the Financial Post in June 2014 about MDD where he wrote!

MaRS DD was based on the zombie delusion that governments can pick winners or, in this case, carefully select those whom they will guide across the so-called “valley of death” – a place littered with the bleached bones of brilliant innovators who couldn’t sell their dreams to blinkered, flinty-eyed financiers.”

Six years later and MaRS Discovery District is still convinced they can pick the winners out of the clouds of their organization and guide them over the “valley of death”!

The time has come for Ontario’s Auditor General to examine this labyrinth and give Ontario taxpayers the facts about their charity; MaRS Discovery District!  From the outside MaRS looks more like a realty company than a Charity!

*Refer an article by the author in the Financial Post on June 10, 2014.

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!

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.

No More “Carrot and Stick” requirements for Class A Ontario Ratepayers

Recently, Steven Del Duca, leader of the Ontario Liberal Party (OLP) was interviewed on NewsTalk 960 AM by Marc Patrone. While the interview dealt principally with the Covid-19 pandemic at long term care homes, near the end, Marc asked a few questions related to the “electricity” sector which resulted in Del Duca’s berating the Ford government for cancelling some renewable energy contracts at a reputed cost of $200 million.  When Marc then asked about the “gas plant moves” Del Duca’s response was to start dancing and he seemed unable to justify the money wasted when the Liberals held power saying; “it’s complicated, it’s complex”!

The ratepayers and taxpayers of Ontario are certainly aware of the complications and complexities of the electricity bills they receive and most blame the OLP for that.  They were the ruling party who created the GEA in 2009 granting expensive 20-year contracts to wind and solar companies (mainly foreign) that drove up electricity prices. Those contracts negatively affected the ability of large, medium and small companies in the province, resulting in veiled threats from large multinational companies saying they would be forced to leave the province due to the cost of electricity.  Those large corporations via the Association of Major Power Consumers of Ontario (AMPCO) commenced lobbying the McGuinty led government as soon as they saw electricity prices start their climb.

AMPCO were successful as Brad Duguid, Minister of Energy on March 4, 2010 instructed the Ontario Power Authority “to undertake the responsibility for creating and delivering an industrial energy efficiency program (the “Program”) with the objective of achieving cost-effective conservation through industrial process improvements that bring energy efficiency gains.”  Needless to say, the OPA did as told and created the Industrial Conservation Initiative (ICI) allowing large industrial users to reduce their demand by picking five (5) peak hours over the year in order to be granted a reduction in the Global Adjustment by reducing demand during those five hours.  The ICI took effect in September 2011 for the benefit of the AMPCO members who were then classified as Class A ratepayers with the rest us now referenced as Class B.  Minister Duguid’s letter to the OPA indicated up to $660 million could be handed out as “incentive funding to Participating Consumers. Incentives shall be sufficient to generate attractive rates of investment return for Participating Consumers in projects that meet the objective of achieving cost effective conservation.”  Many used those funds to invest in load displacement generation (eg: gas generators) so they could continue to operate during peak hours.

As recently noted by my friend Scott Luft, since the ICI inception in late 2011 through to the end of 2019 the cost to Class B ratepayers was approximately $1.4 billion (average of about $170 million per annum) paid to reduce the GA for those large industrial ratepayers as his recent chart shows.

Running the Class B to Class A transfer for 2019 shows the GA for Class B ratepayers was $108/MWh whereas for Class A ratepayers it was $49.63/MWh making the overall cost to Class B ratepayers just over $200 million for the 40 TWh (terawatt hours) Class A ratepayers consumed. It is worth noting the lower the HOEP (hourly Ontario electricity price) market price is during a month, the higher the B to A subsidy becomes.

The reduced consumption we are experiencing due to the Covid-19 pandemic lock-down has exacerbated the province’s surplus generation causing us to not only export more but also to curtail more wind, spill more hydro and steam-off more nuclear.  One would expect the added surplus would reduce the HOEP as it does when consumption falls and therefore benefits Class A ratepayers.

Undisclosed Class A Stable Electricity Pricing

Recognizing the foregoing Class B to Class A subsidy it came as a complete shock to note a press release was issued at 3.30 PM, Friday June 26,2020 by the Ministry of Energy, Northern Development and Mines, Greg Rickford, announcing the province would provide “Stable Electricity Pricing for Industrial and Commercial Companies”!   The reason for this unexpected late Friday announcement appears to be a concern that peak hours occur during the summer and the Ministry suggests “these large employers can focus on getting their operations back up and running at full tilt.” Instead of “adjusting operations in response to peak electricity demand hours.

What is disturbing about the press release is that it doesn’t disclose what the rate freeze has been set at nor does it disclose the estimated cost and who will bear it!

Will the cost of the freeze be layered onto all of the residential and small/medium sized ratepayers or will it be the taxpayers picking up the costs? Did AMPCO successfully lobby for this rate freeze and abolition of the requirement to increase their members conservation efforts?

While most Ontarians recognize the electricity portfolio is indeed both “complicated” and “complex” this action by the Ministry only adds to it!

Time for the Ford led government to fix the mess in this Ministry and not give the Liberals further ammunition to suggest; “it’s complicated, it’s complex”!

April 2020 Showered Ontario Ratepayers with More Costs than 2019

The IESO has recently released data consumption and costs for April 2020.  Needless to say, it brings ratepayers a continuation of bad news propagated by the previous Liberal government and their affection with renewable energy.

In line with the Covid-19 lock-down IESO reported grid connected Class A and Class B consumption fell this April from 10.683 TWh (terawatt hours) in 2019 to 9.781 TWh; an 8.4% drop.  The drop for Class A ratepayers (large industrial companies) was significant falling from 3.301 TWh in 2019 to 2.764 TWh in 2020 for a 16.3% drop (.537 TWh) whereas Class B (small/medium sized companies and residential) consumption fell from 7.382 TWh in 2019 to 7.017 TWh (.365 TWh), down 4.9%.

Despite the cumulative 8.4% drop in Ontario demand of .902 TWh however, the cost of consumption per MWh (megawatt hour) for both Class A and Class B ratepayers increased with the principal cause being a drop in the HOEP (Hourly Ontario Electricity Price) or “market price” and an increase in the GA or Global Adjustment.  Those events coincided with an increase in surplus generation exported to our neighbours at the HOEP price average of $5.78/MWh. Our “net exports” increased 662,000 MWh from 1,427,000 MWh to 2,089,000 MWh and the additional exports cost Ontario ratepayers about $75 million.  In April 2019 we exported 13,4% of what we consumed and in April 2020 it jumped to 21.4%.

Anyone involved in planning, no matter the industry, would suggest; IESO has done a horrible job of it! IESO presumably could however, turn around and suggest it was because of political interference by the McGuinty/Wynne governments their planning was obscured .

To a certain extent, many would be inclined to agree with the forgoing, as one particular type of generation played a major role in creating the expensive mess in Ontario’s electricity sector. It was mandated by the governing Liberals during their 15 years in power!  The particular generation causing most of the fiscal pain (in addition to solar) is of course industrial wind turbines (IWT) which are both unreliable and intermittent.  In both April 2019 and April 2020 wind generation drove up our costs of power and regardless of whether it’s accepted or curtailed, we are still obliged to pay for it.

Scott Luft tracks IESO data for wind and reviewing his spreadsheet for April 2019 indicates wind collectively (grid accepted, transmission accepted and curtailed) was about 1.453 TWh or 97% of our gross exports and in April 2020 wind (collectively) was 1.447 TWh and approximately 67.6% of our gross exports.

What the foregoing clearly shows is those bird and bat killing IWT were not needed and have damaged Ontario’s ability to both attract and retain our manufacturing base due to our expensive electricity prices.

IWT have been a detriment, not a benefit, to the province, including any notion they played a role in helping to close the coal plants!

As soon as this pandemic subsides the Ford government needs to focus their efforts on sorting out the electricity file to weed out expensive and wasteful renewable energy.

The Lourie Butts Team Returns and Strives to Be “Resilient”

The recent announcement about Gerald Butts, former principal secretary to Prime Minister Justin Trudeau, being a member of a newly created “Task Force for a Resilient Recovery”, garnered lots of media attention.  Missing from most of the MSM writeups however was a key fact; Bruce Lourie, President of the Ivey Foundation helped to organize the “Task Force”! Surprisingly the CBC noted this whereas most other media outlets missed that, focusing instead, on Gerald Butts’s return to Ottawa!

Butts and Lourie were the team that brought Ontarians the GEA (Green Energy Act), responsible for doubling electricity prices in the Province and driving away businesses to other jurisdictions offering cheaper energy prices.  Butts worked on the inside of the Ontario Liberal Party as Premier McGuinty’s principal advisor while Lourie “initiated the campaign to shut down coal-fired power plants ” in the province and “helped shepherd the Canadian Boreal Forest Agreement, one of the world’s largest conservation efforts, as well as the establishment of the Ontario Greenbelt,“. Lourie was also appointed by McGuinty as; a director of the OPA (merged with IESO), the Trillium Foundation and the Premier’s  “Climate Change Advisory Board”. Eight years ago, I had occasion to write several articles related to Lourie and cobbled together a spider web showing the myriad of environmental groups he claimed he established and others where he exerted influence.  A link to the article and the “spider web” can be found here!

Changing the Narrative:   It is interesting to note the “Task Force” (in the announcement from the Smart Prosperity Institute,* formerly Sustainable Prosperity), claim they are “a new and independent group of finance, policy and sustainability leaders”.  Also interesting is the fact they label themselves a “Task Force”!  It seems to be characteristic of the “climate change” advocates to name themselves a “commission”, eg: Ecofiscal Commission) or in this case, “task force”.  The former is normally used to signify a group appointed by government and the latter is frequently used by the armed forces such as NATO.

The use of the adjective “resilient” also seems to have replaced the word “sustainable”; perhaps a signal the Covid-19 pandemic and lock-down scared the renewable energy eco-warriors into thinking they may be flogging a dead horse?

The other word in the announcement catching the eye is “new”!  While the “organizations” name is new, many of the members have been around for years pushing the same agenda. One of those is Stewart Elgie, Executive Chair of the Smart Prosperity Institute.  Elgie is a member of the Ecofiscal Commission, Founding Executive Director of the Canadian Boreal Foundation and founder of Ecojustice, claimed as “Canada’s largest environmental law charity”!  To top that off he is a Professor, Law and Economics at the University of Ottawa.  Obviously being an eco-warrior can be a rewarding career!

Another striving, in a seeming effort to confuse the public, is Lourie and others will change the names of their environmental (see above name change of Sustainable Prosperity) or charitable organization(s) to avoid researchable data.  In Lourie’s case they are structures he claims he founded, such as the charity, CEGN (Canadian Environmental Grantmakers Network) now called, Environment Funders Canada.

It appears the Butts/Lourie connection and the relationship with Justin Trudeau also goes back in time, including a 2003 canoe trip.  As noted in a 2003 article about the trip: “He (referencing Justin Trudeau) joined Herb Norwegian, Suza’ Tseto, Ed Stuzik, Gerald Butts, Bruce Lourie, and several CPAWS conservationists for the seven-day trip down the South Nahanni.”

As if to confirm the Butts/Lourie relationship a May 28, 2020 Butts tweet stated:

“@gmbutts Finally, the work we are doing under @brucelourie’s excellent leadership is a volunteer, non-partisan contribution to Canadian public policy debate. it is received in that spirit by sensible people of all political stripes who care about #ClimateChange.”

From this readers perspective it appears, Gerald Butts’s tweet is an admission Bruce Lourie is superior to him in respect to salability on the issue of “climate change”! He suggests only “sensible people” believe in the diatribe dispensed by him and the other members of the “task force”, ie; if you don’t agree you are “insensible”!**

Butts also pushes the envelope in his linkedin post suggesting he was “Principal Secretary to the Premier” from “Nov 1999—Aug 2008”!   The records show Dalton McGuinty officially became Premier, October 23, 2003!  The foregoing suggests someone’s records are incorrect and we should surmise it is none other than Gerald Butts!  Perhaps the claim infers, from his perspective, he considers himself “resilient” even when he stretches the truth!

The opinion of most logical thinkers and scientists is; “manmade” climate change is insignificant compared to the natural forces affecting temperature changes and no matter how effective or ineffective Canada is in reducing emissions it will have minimal effect as we emit only 1.6% of all global emissions!

Mankind has been “resilient” for centuries and there is no reason Canadians should toss away our current and future economic abilities due to the preaching’s of the cabal of eco-warriors!

Let’s stay sensible and resilient for the right reasons not for the ones Butts and Lourie pronounce!

*The bulk of funders of the Smart Prosperity Institute are Federal and Provincial Ministries using taxpayer dollars as well as several charitable foundations, such as Tides Canada who support “global warming” theories.

**Oxford defines insensible as “unconscious, numb, without feeling”.

Parker Gallant Unmasks The Architects Of The Green Energy Scam

I was once again invited to be on the Marc Patrone show on radio station Newstalk Sauga 960 AM to discuss the recent event announcing the creation of the “Task Force for a Resilient Recovery”.  While the principal chat was about the foregoing Marc and I covered other related issues dealing with the energy sector.  It is a 12 minute segment posted here:

Parker Gallant Unmasks The Architects Of The Green Energy Scam

 

OPG reports 1st Quarter Net Revenue Growth of 22.6% and No One Noticed

The 2020 1st Quarter results by OPG were reported May 12, 2020 and showed  their “gross margin” (revenue less fuel expense) increased $289 million or 22.6% over the comparable 2019 Quarter.  Net profit was up $96 million (+45%) to $309 million but the MSM didn’t notice as they were no doubt busy reporting on the pandemic and ignoring any other news!

Net Generation was up 1.6 TWh and 1.3 TWh of the addition came from the nuclear sector (up from 9.8 TWh to 11.1 TWh) and was the primary reason for the increased revenue.  The nuclear generation also included an increase per MWh delivered; jumping from 89.70/MWh to 94.96/MWh and added $58.3 million to revenue while fuel expenses increased by only $6 million.  Gross revenue from nuclear generation increased by $242 million.

Hydro generation was flat in comparison with the prior year at 8.2 TWh and a revenue gain of $11 million was due to a slight increase in an OEB approved rate application.  OPG also spilled 0.7 TWh in 2020 versus 0.3 TWh in 2019 adding about $20 million to revenue.  One should correctly assume the spilling of hydro in both years was caused by SBG (surplus baseload generation) as industrial wind turbines or solar panels delivered power when it wasn’t needed! In the past OPG wasn’t paid for spilling hydro but when wind and solar were found to reduce OPG’s revenue because of wind and solar’s “first to the grid” rights, OPG complained.  They got the McGuinty/Wynne led OLP and the OEB to agree and since 2011 Ontario ratepayers have paid for double and often triple the cost of power.  The tripling comes from gas plants whose primary purpose is to provide peaking power to back-up to wind and solar when there is no wind or sunshine.  Gas plants are paid to idle and OPG is paid to spill hydro!

Now if one does the simple math to determine the cost to ratepayers for a single kWh (kilowatt hour) in the 2020 first quarter delivered by OPG simply divide the “revenue” by the TWh delivered! For the first quarter of 2019 it is $1,426 million divided by 19.1 TWh indicating an average cost of $74.66/MWh or 7.5 cents/kWh.  For 2020 revenue was $1,720 million so dividing that by 20.7 TWh produces an average cost of $82.81/MWh or 8.3 cents/kWh.  That implies a year over year increase of $8.15/MWh which translates to a jump of 10.9 % for each and every kilowatt hour consumed. This additional cost comes in the middle of the Covid-19 pandemic so has serious implications on affordability as many from the private sector struggle with simply trying to economically survive.  If it doesn’t hit the ratepayers it will surely hit the taxpayers as the Ford government has either decreed it will be deferred or taxpayers will pick up the costs.

If it is any consolation, OPG is 100% owned by the province (we are the shareholders) so the net profit of $309 million and the $87 million in taxes (actually they are “payments in lieu of taxes) contributes $396 million to the provincial treasury.  On top of that the hydro “fuel costs” used to generate the 8.2 TWh of hydro was $67 million and will allow the provincial treasury to record revenue from OPG of $463 million for just one quarter. That money comes from the pockets of the ratepayers of the province and will clearly help to supplement the “Ontario Electricity Rebate” program.

As a ratepayer/taxpayer it is both annoying and expensive to realize we pay for unreliable wind and solar generation as well as spilled hydro and those idling gas plants needed to back-up them up!

The time has come to recognize the facts and cancel wind and solar contracts or only pay them when they deliver NEEDED power.  That action would help keep OPG’s rates down at the same time.

Ontario’s ratepayers eat $50 million extra costs for Victoria Day Weekend

As the expression goes; “the hits just keep on coming” and the three days of the Victoria Day weekend did that!  Ratepayers, as is typical in the spring, don’t consume as many kilowatt hours (kWh) daily as they do in the cold winter months or the hot summer days so they just got hit big-time!  The past weekend demonstrated the foregoing in spades, no doubt partially due to the Covid-19 pandemic, but mainly due to renewable energy generation and its required back-up support.

Gathering the information disclosing the $50 million cost for the three days was made easy as my friend Scott Luft sent me an easy to read chart disclosing: generation by source, the estimated cost of the generation and generation steamed-off, spilled or curtailed.  The chart also had the HOEP (Hourly Ontario Energy Price) or “market price” at the time of delivery and total exports over the three days.  Scott also estimated and included DX (distributor connected) generation (mainly solar and wind) and he is always very close to the actual generation delivered when that data is finally available.

It turns out total generation from all sources was 884,000 MWh (estimated) net of the 266,210 MWh (24.4% of grid accepted generation) exported. What that reflects is; average daily consumption was 294,668 MWh or about 10% below prior years.  The 1,090,210 MWh (884,000 MWh + 266,210 MWh) generated and delivered to the TX (transmission connected) and DX grids cost $126,773,990. or $147/MWh including costs of the exports we gave away for a negative value of -$11/MWh.

It is worth pointing out, the HOEP value for the 1,090,210 MWh accepted over those three days was $1,271,203 meaning market value was $1.16/MWh* compared to $147/MWh it cost ratepayers.

That should give those who manage our electricity system and our politicians something to ponder as it suggests the mess our electricity system is in.

The $147/MWh cost of generation over the three days means the total loss for the 266,210 MWh exported was $42,061,180 of the $127 million total cost!  Without the supply of surplus power and the cost to pay our neighbours to take them, our per MWh cost would have been $96/MWh (9.6 cents/kWh).  That would be less than the 10.1 cents/kWh we are charged for off-peak consumption.

So, the above raises the question why did we need to export 24.4% of accepted generation. Well, a small portion of it was due to a decrease in consumption (the pandemic perhaps) but the principal reason is we are obliged to accept wind and solar generation and pay for its curtailment.  At the same time, we also pay for steamed-off nuclear and spilled hydro caused by excess wind and solar generation.

The data from Scott disclosed the 884,000 MWh consumed by Ontarians over the three days could have been easily supplied by nuclear (688,535 MWh) and hydro (267,057 MWh) still leaving almost 72,000 MWh available to export.  On top of that over the three days we also paid for steamed-off nuclear (3,473 MWh) and spilled hydro (96,078 MWh).  While those two wastes also cost us money it wasn’t as much as the 59,119 MWh of curtailed wind whose cost was north of $7 million.

It’s past the time the ruling Premier Ford led government did something to stop the bleeding.  Either cancel the industrial wind and solar contracts or tax them for delivering power to the grid when it’s not needed which is the bulk of the time.

Ontario’s ratepayers are fed up with the burden placed on them by the Green Energy Act!

*The average household in Ontario consumes 9 MWh annually so if we could have purchased those 9 MWh last weekend it would have cost $10.44 for our annual electricity consumption.