Dicey math in ECO report on Ontario’s electricity costs

Appalling math supports agenda-laden report from the Environmental Commissioner of Ontario

How does a car in a driveway explain millions lost selling off surplus power? You have to read the ECO report to understand. Maybe. [Photo G Hills Law]
April 11, 2018

The 322-page report Making Connections Straight Talk About Electricity in Ontario is mind boggling in its attempt to redefine simple mathematics.

As one example, the Environmental Commissioner of Ontario or “ECO” deals with “energy poverty”: “According to 2015 data, Canada’s National Energy Board found 7% of Ontarians to be energy poor”.

Checking the Ontario Energy Board (OEB) annual Yearbook of Electricity Distributors for 2016, Ontario had 4,612,551 residential customers — so, 7% would represent 322,878 “energy poor” households in the province.

The OEB’s December 22, 2014 report noted: “Using LIM* as a measuring tool, and relying on Statistics Canada household data, Ontario has 713,300 low-income households. The OESP** is estimated to reach 571,000. This estimate recognizes that not all low-income households in the province pay their electricity bills directly (i.e., utilities included in rent).”  Those 713,300 low-income households represented about 15.5% of all households in the province.

So, in one simple sentence, the Commissioner’s reference to energy poverty makes almost 400,000 “energy poor” households simply disappear!

Yet another claim is made in the report where in large bold letters it states: “Ontario sells its surplus power to other jurisdictions for more than it costs to make that power.” Here is the analogy used to explain this claim in the commissioner’s report: if you lend your car to a friend to drive when you are not driving it and he pays you $20 it reduces your annual cost.  The reasoning related to the electricity sector is explained by the ECO:

“The surplus power that we export costs us little or nothing extra on top of the fixed costs, because: Our renewable power has extremely low operating costs; and Our nuclear plants cost virtually the same whether they are making power or not.”

What is deliberately omitted in the report is the unreliability and intermittency of renewable energy; favouritism towards industrial wind turbines is clearly visible in the text. ECO Dianne Saxe has demonstrated support for wind power development and even invested in one that stands at Exhibition Place in Toronto (which seldom generates power).  A plaque at the bottom bears her name.

The “how” we lose money on industrial wind is easily visible to most with a little effort. As an example, IESO rates the ability of wind to be counted on to produce power only 12.9% of the time when it will be needed.  What that means is, while average generation of wind power over one year may amount to 30% of capacity, IESO’s reliance on wind dependable for planning purposes is about one third of its probable annual output.

The foregoing has been borne out by others including a peer reviewed paper titled Ontario’s High-Cost Wind Millstone prepared for the Council for Clean and Reliable Energy. Author Marc Brouillette states: “Two-thirds (65 per cent) of wind generation is surplus to demand and must be wasted or dissipated either through forced curtailment of hydro and nuclear generation or by increased exports to Quebec and the United States, generally at low prices.”

Another recent report I wrote suggests forced curtailment of hydro, nuclear, wind, net exports, conservation and costs of backup for wind and solar generation, i.e., gas plants, were more than $6 billion in 2017 added to our electricity bills.

In other words, the ECO’s claims are not only incorrect, they are an insult to common sense and math literacy.

Parker Gallant

* Statistic’s Canada’s Low-Income Measure is simply defined as half of the median adjusted economic family income. Adjusted means family size has been factored in.”

**Ontario Electricity Support Program

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NextEra renewables sale to CPP speaks volumes

Canada Pension Plan’s investment in part of a wind-solar power portfolio seems to ignore a lot of negatives, including the energy poverty rising in Ontario due to electricity bills

Canada Pension Plan contribution rates are rising again, as reported by the Financial Post December 14, 2017: “the contribution rate (i.e., the CPP tax) has increased from 3.6 per cent when the CPP was launched in 1966 to its current rate of 9.9 per cent. It will increase further to 11.9 per cent beginning in 2019.”

The Canada Pension Plan Investment Board (CPPIB) is an active investor, looking for good rates of return without taking “excessive risk.” So they either searched for assets that pay guaranteed above market rates, or were approached by U.S. Power giant NextEra who sold them their Ontario portfolio of 396 MW of wind and solar contracts. CPPIB paid $1.871 million per MW for a total of $741 million CAD and also assumed the debt (US$689 million) attached to the NextEra portfolio. The press release associated with the acquisition had this quote from Bruce Hogg, Managing Director, Head of Power and Renewables: “As power demand grows worldwide and with a focus on accelerating the energy transition, we will continue to seek opportunities to expand our power and renewables portfolio globally.”

Perhaps Mr. Hogg was unaware “power demand” in Ontario has actually fallen from 153.4 TWh in 2004 to 132.1 TWh in 2017 despite an increase in our population of approximately 450,000.  He may also be unaware industrial wind turbines create health problems, cause property values to drop and kill birds and bats including those on the endangered species list.

What the CPP acquisition means is Ontario ratepayers will be indirectly contributing additional funds to the CPP without the benefit of reducing either their annual tax burden or increasing their future pension benefits. A “win, win” for CPP and a “lose, lose” for Ontario’s taxpayers. The sole redeeming feature is that the money will stay in Canada instead of flowing elsewhere.

Ironically, the CPP by acquiring and holding those assets will also be showing their support for energy poverty. The Ontario Energy Board (OEB) in their December 2014 report noted: “Using LIM* as a measuring tool, and relying on Statistics Canada household data, Ontario has 713,300 low-income households.” At that point in time the 713,300 households represented almost 16% of residential ratepayers in the province and one should suspect that number has increased over the past three years.

So, one should also wonder why NextEra, headquartered in Florida, sold those assets and their above market returns? The press related to their announcement of the sale speaks volumes: “As discussed during our earnings call in January, we expect the sale of the Canadian portfolio to enable us to recycle capital back into U.S. assets, which benefit from a longer federal income tax shield and a lower effective corporate tax rate, allowing NextEra Energy Partners to retain more CAFD** in the future for every $1 invested.”

No doubt the NextEra sale may be a sign of the future as the Canadian economy has shown serious signs of slowing as taxes rise and foreign investment falls. The bulk of the investment in the renewable energy sector in Ontario came from offshore companies who rushed to take advantage of the above market rates and guaranteed prices offered under the Feed-in-Tariff (FIT) program available under the Green Energy Act.

Those investors will look to cash in on the sale of those assets, so we should expect to see more public and private Canadian pension funds stepping up to purchase them.

Parker Gallant

*Statistics Canada’s Low-Income Measure is simply defined as half of the median adjusted economic family income.

**Cash Available for Distribution

Energy poverty in Ontario: the data reveals a sad situation

Yesterday, I dealt with the government’s apparent interest in “energy poverty” and specifically noted a consumer survey currently being used by the OEB in an attempt to define how local distribution companies should deal with payments for accounts in arrears.

When the government released its Economic and Fiscal Review 2017: A Strong and Fair Ontario in November, the minister claimed, “Our plan is working. There are now more jobs in Ontario than ever before —more than 800,000 net new jobs since the depth of the recession”.

Impressive: but did those “800,000 net new jobs” have any effect on reducing Ontario’s energy poverty?

The statistics betray a sad situation for Ontario citizens struggling to pay power bills. Two weeks after the launch of the OEB survey and two months before the 2017 Fiscal Review, an interesting 29-page report appeared on OEB’s website.  Named “Data reported to the Ontario Energy Board by Electricity Distributors” it was full of bad news for the period from 2013 to the end of 2016.

The bad news included the number of ratepayers who had been disconnected, the accounts in arrears (up 85,141 or 27.7% since 2013,) and the amount of arrears at year-end. It included customers with “arrears payment agreements,” the amount of those and those cancelled (up 96.4% since 2013). It has data on write-offs, accounts enrolled in equal or monthly payment plans, etc. etc.  It also has data on security deposits, customers with “load limiting devices,” those with “timed load interrupter devices,” the number of “eligible low-income customers” (Hydro One’s increased by 520% since 2013), and those disconnected for nonpayment (up 180% since 2013), etc. etc.

New jobs? No effect on poverty

Based on the “data” in the report (kept under wraps by the OEB), it certainly appears the economic policies of the government may have created “800,000 net new jobs” but it hasn’t done much to counteract “energy poverty” — that has escalated since 2013.

It’s also unclear why the OEB didn’t issue a press release in respect to the data. My queries to them about the 2016 results of the OESP (Ontario Energy Support Program) and LEAP (Low-income Energy Assistance Program) also remain unanswered.

It appears the government has ignored facts and focused attention instead on more spending to make people believe they can have more “free” stuff.  The August launch of the Green Ontario Fund was one such event; the government plans to “invest” $377 million in proceeds from its carbon market to establish the fund.

The minister was quoted in the press release: “Taking strong action on climate change means making it as easy as possible for people and businesses to reduce greenhouse gas emissions at home and work, while also saving money.

Programs (rebates) offered via the “Green Ontario Fund” can be in the tens of thousands of dollars, but the homeowner or small business owner must have funds of an almost equal amount and must work with a “qualified” contractor.   One should assume those who have fallen in arrears on their hydro bills don’t have the cash required to insulate their home or install a heat pump to save money, or they would have been able to pay their monthly energy bill. The $377 million in cap and trade dollars will clearly be handed out to only those who can afford to spend to reduce emissions.

No comment on the strain on Ontario families

There was no commentary associated with the OEB’s data so there is no discussion of the strain put on family members, food banks, charitable institutions and churches called on to help pay hydro bills.

One wonders how much those individuals and institutions helped by way of paying electricity bills and if the contributions exceeded the “write-offs” ($50.9 million in 2016) by the local distribution companies? One also wonders how many single parent families, seniors, disabled, etc. are living in freezing homes or apartments trying to keep their electricity bills at affordable levels?  The recent record low temperatures throughout the province will surely exacerbate the problems associated with their electricity bills being experienced by so many caused by the government’s energy policies.

That $377 million the government is spending could have gone a long way to alleviate the true cost of the Green Energy Act, as could the approximately $400 million paid to corporate wind power developers in 2017 for power they didn’t produce (it was “curtailed” or not added to the grid, but paid for).

I hope the people occupying those 800,000 new jobs are doing their part in generously donating to the charities, food banks, churches, etc. to keep Ontarians living in “energy poverty” warm and fed!

(C) Parker Gallant

NB: You can find out how your LDC is doing in respect to “energy poverty” by reviewing the OEB data report.  Link is here:  https://www.oeb.ca/sites/default/files/2013–2016-disconnection-late-payment%20data-by-utility_20170921.pdf

 

Ontario and energy poverty: addressing it at last?

Almost every day, it seems, the Ontario government must publish a press release announcing the wonders of what the government does for its citizens.

The press release of December 28, 2017 was typical, listing “free” stuff the government had announced over the past year. It referred to minimum wage increases, free tuition, free prescription drugs, etc.

Strangely, there was no mention of the Fair Hydro Plan or electricity in general, the issue that is/was top of mind by most voters in the province.

The December 28 release carried a quote from the Premier on how government is making life “fairer.”   

“As Premier, the most important part of my job is listening to the people of Ontario. When we make changes to legislation and regulations, it’s about responding to real concerns from people in every corner of our province. And it’s all part of our work to make Ontario a fairer and better place to live. We want to make sure that everyone has the opportunity to get ahead in this changing economy.”

 Electricity may not have been mentioned expressly but a lot is happening on that file that will affect Ontario’s ratepayers, in addition to kicking the costs of the Fair Hydro Plan down the road.

The Ontario Energy Board (OEB) appears to be the epicenter: the OEB recently announced it is establishing a “panel” to review how the OEB “can continue to protect consumers”.  The panel won’t report until next year, well after the election date of June 7, 2018.

The OEB’s survey on service rules, or dealing with “energy poverty”

The launch of the OEB panel was preceded by announcement of a survey by the OEB on September 7, 2017 to deal with why many ratepayers are unable to pay their electricity bills. The OEB explained why in a press release 

“Are there any times when Ontario energy utilities shouldn’t be allowed to disconnect customers? How much time should customers be given to pay and should they be allowed to use credit cards? Should energy utilities be allowed to ask for security deposits?”

A web search using the press release’s heading, “Public asked for input on customer service rules for Ontario energy utilities” indicates the survey received no media attention.  Nothing on the OEB site indicates local distribution companies (LDC) were told to notify their ratepaying customers about the survey.  How will this survey receive a broad and “fair” response? The survey results will be provided by pollster Ipsos to the OEB.   The survey is copyrighted so you cannot copy/paste any of the material provided or the questions asked without permission.  What happened to the transparency we were promised?

The survey will supposedly inform the OEB on how to treat ratepayers caught in the “heat or eat/energy poverty” scenario.* The survey asks for responses on “arrears payment arrangements” e.g.,  how long it should allow for repayment, whether late payment charges should apply, etc.  It asks, how long notice should be given for “disconnection” and if “load limiting devices” should be allowed, if utilities should offer equal monthly payment plans and if security deposits should be required, etc.  The survey appears to want a consensus allowing the OEB to set terms and conditions on how households living in energy poverty are to be treated.

No questions ask about pre-paid meters, but that idea is part of the Hydro One application submission for a rate increase currently before the OEB.

Tomorrow: why the sudden interest in how best to treat those living in Energy Poverty.

 

Parker Gallant

 

* Energy Poverty is generally defined as spending 10% of household income on heat and utilities: From Huffington Post “ In Ontario, at least one in five households fall into this category spending on average 12 per cent of their income on utilities

 

Energy Minister doles out lumps of coal to Ontario power customers Christmas Day

Ontario ratepayers, good and bad, had a disappointing Christmas Day

A quick review of IESO data for Christmas Day 2017 shows our Energy Ministry delivered lumps of coal to all Ontario’s electricity ratepayers, whether they were good or bad.  Those lumps of coal can be seen as a gift from all past and present Energy ministers who signed contracts for the industrial wind turbines liberally sprinkled throughout the province.

This year, the IESO data shows about 54,327 MWh* was curtailed (paid for but not delivered to the grid) and paid $120/MWH. That means wind power corporations were paid over $6.5 million  ($6,519,240 to be more precise) for NOT delivering that power.

The curtailed or wasted power was enough to supply almost 2.2 million average homes with power for the day, free.

Meanwhile, the IESO accepted about 25,680 MWh, so the curtailed/suspended generation was actually 2.1 times as much as grid-accepted wind power. Wind power corporations were paid $135 per MWh — that’s another $3,467,800 so the total bill for wind power for the day was $9,987,040.

What you paid them: 39 cents a kWh

Here’s what else it means: the 25,680 MWh of power actually accepted by IESO into the grid cost $388.77/MWh* or 39 cents a kWh!  And, that 39 cents a kWh doesn’t include the costs of gas plant backup, spilled hydro or steamed-off nuclear, all of which applied on Christmas Day.

What you got paid: 1.9 cents

That’s not all: at the same time, the IESO was busy exporting surplus power to our neighbours in New York and Michigan at an average of 1,993MW (net-total exports less imports) per hour. We practically gave away 48,000MWh (rounded) at a cost to Ontario ratepayers of over $4 million.  So, Christmas Day, the day of giving, ratepayers coughed up $14 million for unneeded power whether they could afford it or not! That $14 million raised the cost to electricity customers by about $40/MWh or 4 cents/kWh.

Christmas Day is supposed to be a day of joy and giving. In Ontario though, it was a day when the result of government energy policies and mismanagement furthered hardship for many.

(C) Parker Gallant,

December 27, 2017

 

* Calculation is simply $8,083,200 + $3,467,800 = $11,551,000/25689 MWh = $449.80/MWh

Ontario’s energy poverty: how we got here and why government plans won’t work

 

Former Energy Minister Chiarelli told us not to worry about costs — now hundreds of thousands live in ‘energy poverty’

An OEB report dated December 22, 2014, completed at the request of the then Minister of Energy Bob Chiarelli opened with this remark: “The Minister asked the Board to provide advice on the development of an Ontario Electricity Support Program (OESP), which would assist low-income customers who are spending a disproportionate amount of their income paying for electricity.”

The report used various methods to determine the potential number of households in the province in that category and concluded: “Using LIM (Low Income Measure) as a measuring tool, and relying on Statistics Canada household data, Ontario has 713,300 low-income households. The OESP is estimated to reach 571,000. This estimate recognizes that not all low-income households in the province pay their electricity bills directly (i.e. utilities included in rent).”

It went on further to state: “Using LICO, (Low-Income Cut-Off) Ontario has 606,100 low-income households, and the OESP would reach only 484,900. Using LICO plus 15 per cent, the current LEAP (Low-income Energy Assistance Program) measure of low-income, the number of households would be 687,300 and 550,000, respectively.” 

What that suggests is that, at the time of the OEB report the StatsCan data in 2014, using LICO, indicates approximately 13,5% of households were “spending a disproportionate amount of their income paying for electricity”. Using LIM, the number jumps to 15.8%! Rate increases from November 2014 to November 2016; according to the OEB, were 1.6 cents/kWh (+17%) for an average residential household, so we would expect more households were thrown into “energy poverty”!*

So what did the Ontario government do to alleviate the problem?

The LEAP (Low-income Energy Assistance Program) kicked off in 2010 requiring all local distribution companies (LDC) to contribute 0.12% of distribution revenue (net of the cost of power).  The total amount allocated for this program is less than $5 million annually.

The RRRP (Rural and Remote Rate Protection) has been around since 2003 and provided relief to some rural and remote residential ratepayers.  The annual cost of $170 million was paid by other ratepayers and was recently (January 2017) expanded by the current government to cover more Hydro One customers increasing the annual cost to an estimated $243 million now paid from tax revenues.

The OESP (Ontario Electricity Support Program) as noted above was triggered by a directive from Bob Chiarelli when he was the Minister of Energy and was estimated to cost between $175/225 million to support those hundreds of thousands of households living in energy poverty.  The program was initiated in January 2016 and paid for by all Ontario ratepayers via the regulatory charge on hydro bills. The program has been expanded to provide more support to low-income households and the costs are now paid out of tax revenues.  The projected cost increased to approximately $300 million per annum!

The First Nations On-Reserve Delivery Credit is a new incentive providing approximately 21,500 customers with free delivery charges (estimated at $85.00 per month) at an annual cost of $21 million.

The Affordability Fund is also a new program funded by taxpayers to provide qualifying households with: LED lights, appliance upgrades, insulation, heat pumps, etc., all for free at the taxpayers’ expense, estimated at $100 million.  It’s not clear if this is to be an annual or a one-time fund!

All of the above initiatives, with the exception of the LEAP program, are now funded by taxpayers, so about $370 million was transferred from ratepayers to taxpayers and annual funding costs increased to approximately $660 million!

That’s on top of the $40 billion deferred under the Fair Hydro Plan!

How was so much energy poverty caused?

The quick answer to the above question is, it was caused by the Green Energy Act (GEA) which gave long-term contracts to mainly foreign industrial wind and solar developers. Wind and solar provide unreliable and intermittent generation and must be backed-up by gas plants doubling up on the costs.  The results have been evident since those power sources were added to our grid in larger and larger quantities.   The following highlight some of the estimated costs for the first nine months of 2017:

  • Nine months of curtailed (could have been generated but wasn’t needed) wind of 2,209,000 MWh (megawatt hours) were paid $120/MWh so cost ratepayers $265 million.
  • Nine months of spilled (over the dam but not through the turbines) hydro power of 4,500,000 MWh by OPG cost ratepayers almost $185 million.
  • Nine months of subsidized surplus power of net exports (exports minus imports) of slightly over 9 million MWh to our neighbours cost ratepayers about $800 million.
  • Nine months of “conservation” spending is estimated to have cost Ontario ratepayers $300 million.

Totalling up the above, and forgetting about the costs of steamed-off nuclear or money paid for idling gas plants to back-up wind and solar, gets this result: Ontario’s electricity system paid for 15.7 million MWh that provided no power for Ontario’s ratepayers.

That 15.7 million MWh could have supplied over 1.7 million average Ontario households with power for a full year, but instead added their costs to our electricity system.   Those costs of an estimated $1.550 billion were 2.3 times the relief provided to households living in energy poverty!

To conclude, what created more “energy poverty” in the province is to simply point to bad planning (no cost/benefit analysis) by the incumbent government. Their plan to resolve it? I will simply repeat former Minister of Energy Bob Chiarelli’s promise, “it’s just the price of a Timmies cup of coffee”—every day of the year for many, many years!

 

* Energy poverty is generally defined as 10% or more of disposable income is spent on heat and hydro!

A look back at Ontario Liberal promises: the true cost of bungling

Former Premier Dalton McGuinty: The Liberal promises of affordable electricity and politics-free policy were discarded [Photo: Huffington Post]
A Globe and Mail article of November 11, 2002 reported that Dalton McGuinty, leader of the Ontario Liberal Party (OLP), then in Opposition, was upset because Premier Ernie Eves had promised legislation to cap electricity prices.

Liberal Leader Dalton McGuinty said the true cost of the Conservative government’s hydro bungling will add billions of dollars to the debt.

“Now that families and businesses have been scared to death, now that new investment in supply has been scared off, now that everyone knows hydro has been completely mismanaged, Ernie Eves is going back to square one,” Mr. McGuinty said in a news release on Monday.

“The government should have had its act together before the market opened. And the bill for its failure to do that hasn’t been cancelled — it’s just been put off.”

Mr. McGuinty said the Ontario Liberals have been calling for action for months, but the Eves government has not acted until now to freeze electricity prices and increase supply.

The Liberal Leader said his real concern is what Ontarians will have to pay over the long term.

Fast forward to September 14, 2005 when Dalton McGuinty was Ontario’s Premier. In a keynote speech to the Ontario Energy Association, he bragged about what the OLP had accomplished and their plans for the future. Let’s examine the promises made in that speech.

McGuinty: “We won’t gamble away Ontario’s future prosperity because of what the next poll might or might not say...”

A noble thought, but discarded by the OLP. When seeking re-election in 2011 McGuinty cancelled the Mississauga and Oakville gas plants and plans to contract for offshore wind developments.  Polling in ridings affected by the foregoing showed several Liberal seats in jeopardy.   More recently, shortly after a poll indicated Premier Wynne’s approval rating was at 20 %, she announced hydro rates would be cut by 25 %.  Policy by polls…

McGuinty: … Or because of what new technology might or might not be developed.

The launch of the Green Energy and Green Economy Act (GEA) in 2009 focused on wind and solar generation at above market prices, without a cost/benefit study as pointed out by the Ontario Auditor General in his December 5, 2011 report.  Both wind and solar were old technologies promoted by ENGO and wind and solar associations and known to be intermittent and unreliable sources of generation.

McGuinty: That’s why we asked the OPA to report on a long-term plan.

The Ontario Power Authority (OPA) produced a viable plan with limited wind and solar capacity to be contracted for in a competitive environment, but the plan was suspended by Energy and Infrastructure Minister George Smitherman before approval via his directive to the OPA dated September 17, 2008.

McGuinty: That’s why we acted to take the politics out of pricing.

The recent Fair Hydro Act and the gas plant moves dispel the notion that politics has been removed from pricing, as do the FIT and MicroFIT programs that past Minister Smitherman enabled via a directive issued September 24, 2009 to the OPA which included a domestic content requirement.  The latter resulted in a challenge before the World Trade Organization which Canada lost and taxpayers picked up the costs.

McGuinty: This spring, the Ontario Energy Board, a truly arms-length public agency will set the price of power for small consumers. The OEB sets the price based on what electricity costs, not on what politicians think it should cost, or wish it would cost.

While those homilies are correct, the prices are set based on input costs which the OEB has no control over. In simple terms, they divide the input costs accumulated (Global Adjustment + Hourly Ontario Electricity Price + transmission) and divide it by kilowatt hours consumed.  The impact of above market (highlighted by the Auditor General reports) contracts with wind, solar, and other generators and the plethora of other spending (e.g., conservation $400 million per year, etc.) dictated by the Energy Minister, plus above market salaries and benefits for OPG and Hydro One employees etc., are all part of those costs.

McGuinty: We could require our businesses and families to subsidize the price of electricity through their taxes.

Premier McGuinty did just that when he moved the gas plants and part of the cost was paid by taxpayers. The Liberal government also drove up the price of hydro and put 600,000 household into energy poverty. It fell on charities, supported by Ontario taxpayers, to help those households.  Tax dollars from those households also supplied grants to buyers of expensive Tesla automobiles and those grants continue today!

McGuinty: But, having finally put our province on a sound financial footing, we choose to ensure the price of electricity reflects the true cost of electricity.

The “sound financial footing” didn’t last long, and during the Liberals’ reign Ontario’s debt has increased from $132 billion to over $300 billion. Ontario has seen only one budget in the last decade that will seemingly balance and that was the most recent one.

McGuinty: We can’t guarantee price certainty –; that just isn’t realistic, given the nature of the challenges before us.

The Fair Hydro Act just passed by the Wynne government guarantees price certainty for four years for certain classes of ratepayers.  This isn’t realistic: refinancing those assets may conflict with their ability to continue to generate electricity for an additional ten years.  Amortization of fixed assets is based on the longevity of those assets, but the Wynne government has decreed that they can extend their life so that our children will be stuck with the replacement costs.

McGuinty: But I can assure you that we will do everything we can to ensure safe, clean, affordable electricity is always in full supply in the Province of Ontario.

When the OLP became the government, the average price of a kilowatt hour was 4.3 cents. By 2016 it averaged 11.2 cents — a 160% increase.  The 25% reduction touted by Premier Wynne as the largest in Ontario’s history followed.  The subsidy to cover that 25% will accumulate within the confines of OPG and at the end of increases held to “the rate of inflation for the next four years,” that subsidy will rise well above that benchmark in the years following that moratorium.

McGuinty: We won’t subsidize prices or cap prices –; that would mean more debt or higher deficits. Both of which would lead ultimately to higher taxes.

By deferring debt to subsidize hydro prices for four years within OPG’s balance sheet (guaranteed by the Province), the plan is to hide (temporarily) the impact from ratepayers while supposedly balancing the budget.

So, what happened to all those lofty promises of “affordable” electricity costs for consumers and business, that is immune to politics?

Was this what all those promises really meant?

“The true cost of the Liberal government’s hydro bungling will add tens of billions of dollars to the debt.

Parker Gallant