Ford gov’t needs to do more to clean up Liberal’s energy mess

The subject today (June 29, 2020) when I was on the Marc Patrone show on NEWSTALK 960 AM is the captioned.

It’s on the podcast at 53 minutes and is about 12 minutes long.  Find it  here:
and on the blog here:

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”.

Word on the Street

Pleased to report the word about the high costs of Ontario’s electricity system are spreading. My efforts to get the bad news out has resulted in two recent events.

I was pleased to note Catherine Swift, an economist I admire and the former CEO of the CFIB (Canadian Federation of Independent Business) kindly picked up on some of my recent rants in an article she penned for The Niagara Independent titled; Bad News for Ontario Hydro Costs!  It is worth a read.

In another case Marc Patrone the host of the 9AM to 11AM show on NEWSTALK Sauga 960 AM had me on again for another interview associated with a couple of articles I had written.  Marc knows how to ask the right questions about the energy sector which I did my best to respond to.   The interview has been now been posted on Newstalk Canada here: http://newstalkcanada.wpengine.com/

Ratepayers get Dinged Again for Nothing

Ratepayers get Dinged Again for Nothing

If the $43.4 million Ontario ratepayers and taxpayers paid for nothing Easter weekend wasn’t bad enough news, unfortunately, the bad news keeps on coming!

Monday April 13th added another big chunk of money to the coffers of generators (mainly those who own the industrial wind turbines [IWT]).  The wind was blowing when it wasn’t needed but IESO took 58,700 MWh of it, added it to the grid and also paid for another 20,800 MWh of curtailed wind with our dollars.  Together IWT, (grid accepted and curtailed) added $10.5 million to the costs of generating power for the day.

Total “Ontario Demand” was 313,295 MWh but IESO accepted 406,320 MWh (IESO refer to that as “Market Demand”) even though the additional 93,025 MWh wasn’t needed.  IESO sold off the excess generation via the HOEP (hourly Ontario electricity price) market and the maximum price they got for it was 0.00 cents/MWh.

The above easily demonstrates wind generation wasn’t needed. Grid accepted wind represented 62.4% of what was sold for -0.03 cents/MWh according to IESO’s Daily Market Summary, but it cost us $10.5 million.  As if to add to the grief, the additional 36,414 MWh we sold for nothing cost another $5 million, using IESO’s first GA estimate of $137.07/MWh for the month.  It’s also worth mentioning idling gas plants added approximately $3.2 million to the day’s costs to back-up wind and solar generation.

The total dollar amount of $18.7 million for another day of waste added $60/MWh to the costs of Ontario’s Demand of 313,295 MWh pushing costs close to $200/MWh or .20cents/kWh. We also probably got dinged for spilled hydro which would add further costs but IESO don’t disclose that information.

It’s time our current government recognized the catastrophe the McGuinty/Wynne governments created in respect to the electricity sector. I’m confident the ratepayers and taxpayers of Ontario would be delighted if the Ford government used their power to end this insane result of the Ontario Liberal’s Green Energy Act.

Fix it please as we taxpayers and ratepayers are tired of paying for NOTHING!

Easter Weekend and Wind Generators Gorged on Ontario’s Chocolates

Since the McGuinty led, Ontario Liberal government, passed the Green Energy Act in 2009 handing out lucrative above market contracts, Ontario ratepayers have been saddled with increasing costs. Industrial wind generators tend to produce more energy in the middle of the night and during the Spring and Fall when demand is at its lowest levels.  Easter weekend was atypical!

Average demand during a mid-January or mid-July weekend typically has a daily average of just under 400,000 MWh but in the Spring and Fall Ontario’s weekend demand is normally 100,000 MWh less and the past Easter weekend was no exception.  According to IESO’s Daily Market Summaries for April 10th, 11th and 12th the average daily Ontario demand was 293,400 MWh. If one does the math the hourly average demand over the three days was 12,225 MWh, easily supplied by nuclear which averaged over 10,000 MW over the 72 hours and hydro at an average of less than 4,000 MW.  In one hour when wind generation dropped and demand increased hydro ramped up to over 4,800 MW so together nuclear and hydro could have easily supplied all of our needs even when Ontario demand peaked at 14,174 MW.

Unfortunately, those “must take” contracts granted to wind and solar generators meant IESO were obliged to either accept their generation or pay to curtail what they might generate.  Over those three days, lESO accepted approximately 125,000 MWh of wind generation to the grid and curtailed 84,400 MWh.  The cost of the grid accepted and curtailed wind power works out to a cost of $213.44/MWh or about $26.9 million for unneeded power.

Saying the electricity wind generated was unneeded is not a misnomer, as over those three days we exported 250,000 MWh which was double grid accepted wind.  To make the obvious more obvious IESO sold exports at an average price of $2.71/MWh so if we assume all of the wind generated electricity was exported it would have generated $339 thousand while costing $26.9 million.  Even paying the idling costs (about $10K per month per MW) on the 9,500 MW capacity of gas plants (to back up wind and solar generation) only cost us about $9 million for the three days. The other exported power of 125,000 MWh over those three days cost us the GA (Global Adjustment).  Based on IESO’s first estimate for April the forecast of the GA at $137.07/MWh would mean the additional 125,000 MWh exported; cost ratepayers/taxpayers another $17.1 million.  I am confident we were spilling hydro and paying for it too but IESO don’t disclose that information (transparency is frequently not in their vocabulary).

Summing up  

Adding the costs of wind generation of $26.9 million to the costs of the other exported generation of $17.1 million and deducting the revenue from the sale of the exports of  $600K would see Ontario ratepayers/taxpayers paying $43.4 million over the three days for NOTHING!  Something is inherently wrong with the management of our electricity system despite all of those well-paid public servants operating it.  Thank god it was a cloudy weekend or solar costs would have added to the burden.

Spurious Claims 

While researching the above I was made aware of a letter sent to our esteemed (sarcasm intended) Prime Minister signed by over 250 people  principally associated with universities.  The letter was posted on the website of the National Observer and focused on telling the PM to not execute a “bail-out” for the oil and gas sector.  The following paragraph with its obvious connection to what Ontario has experienced as a result of the Provincial Liberals passing the GEA, displays either their inability to see the obvious or, their complete lack of common sense!  To wit:

 “It inot acceptable to give privileged access to big business associations while excluding representatives from trade unions, universities, municipalities, Indigenous communities and non-profit organizations that work on behalf of the public interest.

Public investment in oil and gas at this time is a highly speculative proposition, and particularly unwise given the urgent need for strategic investments in economic recovery.”

Taxpayers annually hand out hundreds of billions to all of those groups they suggest are “excluded” and the money they receive is generated by the private sector including those in the oil and gas businesses and their supply stream.

Had those professors and reputed experts bothered to examine big business associations such as CanWEA or CanSIA to determine how much they extract from Canadian ratepayers/taxpayers in after-tax dollars they might have been shocked. The Easter weekend in Ontario demonstrates what “privileged access” really looks like!

Looking ahead

Perhaps the time has arrived for Premier Ford to use the Province’s declaration of the “State of Emergency” to reduce payments to wind and solar generators as part of the pandemic exercise.  Unlike so many other companies in Ontario the operators of wind and solar generation have not stepped forward to assist in the fight against Covid-19 and the economic cost to the country. They just want our money.

Time to take away wind and solar generators “privileged access”!

OPG’s Record Results for 2019

The Ontario Power Generation (OPG) announced their financial results March 12, 2020 for the year ended December 31, 2019 and the media appears to have been so focused on Covid-19 to even notice.  At first glance the $1,126 million of after-tax income reported appears to be less than 2018’s $1,195 million but the latter includes after-tax income of $205 million associated with the sale of the Lakeview Generating Station and unrelated to earnings from power generation.

Power generation was 77.8 TWh (terawatt hours) in 2019 versus 74 TWh in 2018 and gross revenue climbed by $485 million from $5,537 million to $6,022 million.  Payments, in lieu of taxes, were $190 million versus $141 million in 2019. All-in, the province will be able to include $1,316 million as revenue.  That, as Scott Luft points out, is a long way from covering the $5.5 billion in costs for the “Ontario Electricity Rebate”* (OER) for the upcoming March 31st year-end budget.

Noted in the financial report is the following: “The Enterprise Total Generating Cost (TGC) per megawatt hour (MWh) was $50.82 for 2019, compared to $53.24 for 2018.”  While it appears the claim in this statement is the cost of generating a MWh decreased on a year over year basis, OPG do not define what is included in the “TGC” calculation.  One should suspect a number of substantial costs, paid by ratepayers, are not included in the TGC!

This writer’s preference is to calculate the actual costs per MWh by simply dividing gross revenue by actual generation.  If one does that calculation for 2019 for OPG; the per MWh cost is simply $6,022 million (total revenue) divided by 77.8 TWh (generation reported).  Resulting from this calculation; the cost per MWh for 2019 was $77.40/MWh or 7.74 cents/kWh (kilowatt hour).  Ratepayers in the province would be happy if that was the average of TOU (time-of-use) rates, but ratepayers know, other factors played a role in increasing costs.  Wind and solar generation have driven prices up over the past 10 years by over 100% due to above market, contracted prices and the inability of wind and solar to generate power when it is actually needed causing us to export surplus generation for pennies on the dollar to our neighbours.

Looking back in OPG’s past is interesting.  If one reviews their financial statements for 2009 (the year the GEA was passed) the same calculation as noted above indicates a per MWh cost of $60.97 (6.1 cent/kWh). That means we have seen an increase of $16.43 per MWh or 26.9% over the 10 years!   Ontario’s inflation rate over those same 10 years was 17.97% so the cost of OPG’s generation over that time-frame was slightly above Ontario’s inflation rate.

While we can commend OPG for keeping their costs of generation at reasonable levels it is unclear why they suddenly went south of the border to acquire a string of hydro electric generating stations at a cost of C$1.12 billion. The acquisition of Cube Hydro (merged with Eagle Creek Renewable Energy) adds 627 MW of (mainly) hydro electric capacity but does absolutely nothing (on its surface) to benefit Ontario ratepayers.  As a provincial crown corporation their focus should be to ensure the delivery of cheap reliable power to Ontario ratepayers!

We ratepayers will need to keep our eyes fixed on OPG to ensure they don’t loose sight of their mission which is noted on their website as “ Ontario Power Generation’s mission is to provide low-cost power in a safe, clean, reliable and sustainable manner for the benefit of our customers and shareholder.”

*The OER replaced the Wynne led governments “Fair Hydro Plan” subsidizing rates for residential customers.

The Canadian Institute for Climate Choices says it louder

Should one read a report titled; “Canada’s Top Climate Change Risks” issued July 2019 by the “Expert Panel” on “Climate Change Risks and Adaptation Potential” you would probably think the “Charting our Course” report recently issued by the Canadian Institute for Climate Choices (CICC) was an update but it wasn’t!  What a comparison of the two reports highlight is words spoken by the former Minister of the Environment and Climate Change, Catherine McKenna, who said: “if you repeat it, if you say it louder, if that is your talking point, people will totally believe it,”.  The latest CICC report exemplifies her quote and us taxpayers have provided the CICC with $20 million to ensure we “totally believe it”!

How many times can you flog a dead horse?

The first report’s “Expert Panel” are part of the “Canadian Council of Academies”. The council, launched in 2002, has managed to survive on $45 million of our tax dollars for the past 18 years. They are required to produce five reports annually when directed by the Federal Government.  Their report on Canada’s climate change risks came about as a result of a direction from the Treasury Board of Canada.  Seven (7) individuals on CCA’s “expert panel” and “workshop participants” are a part of CICC’s “expert” group and another eight (8) of those experts at the CICC were also cited as references in the CCA’s report.  One of those was Blair Feltmate, Chair of the Intact Centre at Waterloo University. Needless to say, both reports lean heavily on the insurance industries information about how “climate change” has increased insurance claims.  Catastrophes are forecast in both reports and similar comparisons are made to past events blaming them on “climate change”. The latter includes the Fort McMurray wildfires with estimated insurance claims of $1.4 billion. The CBC reported on the fire stating: “Provincial wildfire investigators have established that the fire was most likely the result of “human activity.”

On page 2 of the CCA’s report they have a map of Canada and have highlighted 10 of “Canada’s Top Climate Change Risks” and one of them is: “Lower Great Lakes water levels, affecting shipping, hydropower production, and recreation”.  As noted above the CCA report was published in July 2019 two years after Ontarians were told Lake Ontario had just experienced a “100-year flood”. Even worse flooding occurred in 2019 setting new records.  Apparently the “experts” involved in preparing the report failed to absorb the well-publicized news at that time and said nothing about “Plan 2014”!

Akin to the foregoing, CCA’s report contained statements such as: “Houses located in a floodplain, for instance, face greater risk due to their heightened exposure.”  Hardly enlightening news!

As if to excuse the diatribe spewed by the CCA expert’s report, their “Conclusions” had this to say:

Assessments of the risks posed by climate change are subject to many sources of uncertainty. Climate projections and modelling results provide an envelope of possible futures associated with different GHG emissions trajectories, but the exact path of global emissions and the full implications for the climate, combined with other natural and anthropogenic processes, remain unknown.

The CCA report therefore concludes with total disclosure they have no faith in anything contained in the prior 59 pages of their report.  Perhaps this is why former Minister McKenna took the next step to create the Canadian Institute for Climate Change and handed them $20 million of our tax dollars for a report supporting her views.

She obviously wanted her minions to “say it louder”!

Stay tuned for more.

The Canadian Institute for Climate Choices is “Charting our Course”

The first in this series provided a glimpse of how the Canadian Institute for Climate Choices (CICC) came to be, via a $20 million taxpayer grant by the Federal Ministry of the Environment and Climate Change and disclosed how it had issued its first report titled, “Charting our Course”.

If one bothers to Google “Charting our Course” (the name of the first report from the CICC), you get over 24,000 hits and one of them is a Newfoundland and Labrador Provincial report from 2011 which was their Climate Change Action Plan 2011.  Included in it was a big push for the Muskrat Falls project which is in process of being built but is more than double the original $6.2 billion budget (current estimate is $12.7 billion).  As a result, recent media articles have noted the federal government is stepping up to bail Newfoundland out but no firm details have been forthcoming as yet.

One should hope the title choice of the first report by the CICC will not result in the same effect on Canada as the 2011 report had on Newfoundland but don’t count on it.

We shouldn’t try to become the Venezuela of the G7 because of recommendations that will be made by the CICC but from the rhetoric in their version of “Charting our Course” they appear determined to reduce or eliminate our oil and gas output at a high cost.

Needless to say, there is lots of scary stuff in this report but they have missed or distorted facts such as: “Canada will not be immune. Our coastal cities will be swamped by rising seas, threatening property and infrastructure. In the face of more frequent and more severe fire and floods, insurance premiums are poised to rise dramatically, making home insurance unaffordable for many Canadians.” Looks like they are setting us up for rising insurance costs from those rising seas and severe fires.

Hmm, surely its simply co-incidental the CEO of CICC, Kathy Bardswick, is the former President and CEO of The Co-operators Group Ltd., (5th largest Canadian property/casualty insurance company) and Blair Feltmate sits on the CICC “Expert Panel”.  Feltmate is Head, Intact Centre on Climate Adaptation,  University of Waterloo; funded by donations from Intact Financial Corporation, the #1. Canadian property/casualty insurance company as noted in a recent Insurance Business Canada magazine.  As another coincidence, Feltmate was called out for his remarks on CBC radio about distorted flood claims by the CBC’s Ombudsman who noted “the CBC report had “failed to comply with journalistic standards” in assessing and reporting on the industry’s claims.”

The CICC report delves into the economics of the UNIPCC forecasted temperature increase in an obtuse way presumably meant to obscure its intent on shutting down the oil and gas sector. As an example, the report notes: “Much of Canada’s economy—and the prosperity it generates—depends on sectors that export emissions intensive products and commodities, such as oil and gas and cement.”  While oil and gas are major exports (at present) it should be noted 2018 cement exports were an unimpressive $536.6 million. Total exports in 2018 were $521.5 billion so cement was 1/10th of 1% of total exports.  To put the foregoing in context, Canada’s coal exports in 2018 were $7.5 billion (97% metallurgical) and automobiles and parts exported were over $60 billion.  One would think all those “experts” signed on to the CICC could locate a better “emission” related addition to oil and gas.

As if to make the foregoing argument ironic, the report claims the cleantech sector would benefit stating; “Meanwhile, conventional sectors, such as mining and forestry, could benefit from an unprecedented increase in global demand for raw materials.”  This would suggest they believe the mining and forestry sector are “cleantech” and somehow “emissions free”.  A strange claim!

Another part of the report says: “Fewer deaths due to extreme cold are offset by more deaths from extreme heat.” A little research on the part of the authors and peer reviewers of this claim would have found a fact based study that unequivocally states the opposite:  The following chart from the Lancet Study from 2015 shows the CICC claim to be completely false!

Figure thumbnail gr2

Fraction of all-cause mortality attributable to moderate and extreme hot and cold temperature by country

The foregoing study, completed by 22 individuals with doctorates stated: “We analysed 74,225,200 deaths in various periods between 1985 and 2012.“ As the chart notes the analysis covered 13 countries and the results clearly show moderate and extreme cold are responsible for 15 to 20 times more deaths than moderate or extreme heat.

Why do the “experts” associated with the CICC distort and ignore facts unless their sole purpose is to convince us we need a higher “carbon tax”!

This “unparalleled collaboration of experts from across the country” seem unwilling to identify facts but are happy “Charting our Course” to economic disaster while utilizing our tax dollars!

Will the eventual outcome result in Canada becoming Canazuela?

NB:  Stay tuned for more on the CICC’s report.

 

Ontario electricity ratepayers paid up big-time to reduce emissions

The “Ontario Energy Quarterly” is a report containing a myriad of information related to the Ontario electricity sector and seems to be a collective production of the Province, the OEB and IESO.  It includes a chart tracking Ontario’s electricity sector emissions from 2010.  The report always appears six or seven months after the actual reporting date.  Their recent report indicates as of the end of the 2nd Quarter of 2019 Ontario’s emissions had fallen from 20 megatonnes (MT) in 2010 to only 2 MT by June 30, 2019

To put the foregoing in perspective the Ontario Environment Commissioner in 2016 indicated Ontario’s emissions peaked at 208 MT in 2000 and according to the Federal Ministry of the Environment and Climate Change Ontario’s emissions in 2017 had fallen to 158.7 MT.  So, Ontario’s emissions fell 49.3 MT meaning the 18 MT drop in emissions from the electricity sector represented 36.5% of it. At the end of the 2019 2nd Quarter, emissions from the electricity sector represented only 1.25% of total Ontario emissions in 2017 versus 11.5% in 2010 when total Ontario emissions were 174.1 MT.

The above was achieved without a “carbon tax” but it’s been an expensive proposition for ratepayers.

Costs of reducing 18 MT of emissions in the Ontario electricity sector

Many reports and articles related to reduction of emissions in Ontario’s electricity sector suggest wind and solar generation was responsible for eliminating coal generation in Ontario.  Those purveying the claims avoid the facts and fail to mention costs. The decade beginning in 2010 was the advent of above market contracts signed under the GEA for wind and solar that began to appear on our landscape.  Those contracts drove electricity costs up generating unreliable intermittent generation necessitating back-up from gas plants* including the TransCanada Oakville gas plant move which cost $1 billion.

Looking at generation for the past decade (2010-2019) from wind and solar is a relatively simple task as Scott Luft using IESO data, posted generation by source and estimated costs in charts (complete with text) starting with 2008.  He also charts our exports and its revenue over the same time period.

Wind: Let’s start with industrial wind turbine generation which in the ten-year period (2010-2019) resulted in accepted wind of 83.3 TWh and 10.5 TWh of curtailed wind.  The combined cost of the generation and curtailment was $12.760 billion representing an average cost per kWh of 15.32 cents.

Solar: Over the decade solar panels generated 21,9 TWh with most generation delivered to local distribution companies.  The costs of those 21.9 TWh was $10.504 billion or 48 cents/kWh.

Spilling water: As if to make matters worse, as Ontarians reduced their demand for electricity dropping it from 139 TWh in 2010 to 135.1 TWh in 2019 the generation coming from wind and solar created numerous situations causing SBG (surplus baseload generation) and IESO instructed OPG and other hydro generators to spill water rather than generate clean hydro power.  Once again Scott Luft has summarized available data and estimated the cost of the SBG for just OPG over the past five years. The cost was almost $500 million and was billed to ratepayers.

If one accepts the premise, wind and solar are responsible for the 18 MT reduction, then one must accept the emission reduction represented a cost to Ontario ratepayers of $23.764 billion including the $500 million from hydro spillage. That translates to an emission reduction cost of $1,320/tonne, well above the current carbon tax of $20/tonne and the one proposed by the Ecofiscal Commission of $210/tonne.

Exports: Over the past 10 years, IESO were busy selling our surplus power to NY, Michigan and other provinces and states.  In total, 182 TWh went south, east and west to our neighbours for the market price (HOEP).  Funds lost from those sales (net of transmission costs recovered) were the GA (Global Adjustment) costs of almost $12.5 billion or 6.8 cents/kWh.

It is worth noting; exports of 182 TWh were 173% of the 105.2 TWh of accepted wind and solar generation so, exporting less could have saved us that loss of $12.5 billion.

The foregoing clearly demonstrates the 83.3 TWh wind generated plus the 21.9 TWh solar generated power over the past 10 years wasn’t needed to reduce emissions in Ontario’s electricity sector!  We needed less intermittent unreliable generation as our nuclear and hydro generation (supported by less gas plant capacity) could have supplied our needs and we could still have exported 76.8 TWh.

Ontario Premier Doug Ford should demand the federal government recognize the above “facts” and reimburse the province’s ratepayers by either issuing 182 million tradeable “carbon credits” or pay the province the $23.7 billion we have paid to reduce our emissions. Either one would prove beneficial and when applied to the sector would serve to reduce Ontario’s electricity rates making the province more competitive, thereby improving our economic future.

Failing the above we residential ratepayers should all be looking forward to receipt of our rebate cheque even its only 90% of the $1,320 per tonne we have paid over the past 10 years!

*Gas plants generated 160.6 TWh from 2010 to 2019 at an estimated cost of $19.726 billion or about 12.3 cents/kW.

 

Ontario’s three Classes of electricity ratepayers

The title above is intentionally misleading.

Ontario has only two classes of ratepayers which are: large industrial users referred to as, Class A and the rest as simply Class B!

Class A’s do have sub-categories related to their peak demands and in order to obtain lower rates, they must pick the “high five” hours of the year when Ontario’s demand reaches its highest level(s).  Picking those hours and reducing their demand (by firing up a diesel generator) allows them to achieve significant savings. Reference to IESO’s report for 2019 detailing Class A consumption and the cost of the GA allocated, indicates the average cost of the GA (Global Adjustment) was 5.89 cents/kwh. That GA cost plus the average HOEP of 1.83 cents/kWh for 2019 produced an average cost of electricity for Class A ratepayers of 7.72 cents/kWh.  The substantial all-in lower cost of electricity for Class A ratepayers is due to the allocation (subsidy) of the GA costs being charged to Class B ratepayers.

The Ontario Liberal Party during its time in power piled up electricity costs by signing contracts well above market rates for intermittent and unreliable power from wind and solar which needed back-up power from gas plants.  The combination of the three sources of power drove rates up resulting in large industrial customers making the point: Ontario’s cost of electricity made them uncompetitive.  The result was the Liberals simply reallocated costs to residential and small/medium sized companies.

The all-in Class B rate (GA plus HOEP) for 2019 was 12.63 cents/kWh.

Recently, not all Class B ratepayers had to pay the foregoing average rate, as “residential ratepayers” * now receive a taxpayer subsidy, appearing on our electricity bills as the “Ontario Electricity Rebate”.   A “rebate” of 25% off of the electricity line on our bills was initially referenced as the “Fair Hydro Plan” and enacted by the Wynne led government mere months prior to the last provincial election.  The Liberal government, under Wynne, noted voters were extremely upset with electricity rates climbing by over 100% in just several years. They felt it would affect the outcome of the election without the rebate.  Despite the rebate Ontario’s Liberal Party felt the wrath of the electorate and lost party status.  The Ford government moved the rebate to taxpayers and added other allocations such as:  conservation spending ($400 million annually), low income support programs ($200 million annually), Northern Ontario tax credit ($120 million annually) etc. to the taxpayer pot.  As a result (based on the writer’s calculation) taxpayers are now picking up almost 40% of the GA allocated costs for residential ratepayers under the “Electricity Cost Relief Program” recently estimated to cost $5.5 billion.

Second class, Class B ratepayers

The small and medium sized businesses** in Ontario are still bearing the full brunt of the increased electricity costs as they get no relief.  They are treated as second class citizens of Class B which are already regarded as second class citizens by our electricity operator. A significant factor affecting them is related to Ontario’s time-of use rates with the highest costs (20.8 cents/kWh during On-Peak hours) applied to when most small/medium sized businesses are operating and consuming electricity.

A recent occurrence allowed me to review an electricity bill for a company with just under 100 employees.  Their electricity costs were 18.9 cents/kWh.  A comparable company operating in the USA would pay (average of all US states) 10.8 cents/kWh according to the US Energy Information Administration.  The net difference of 8.1 cents/kWh would have saved the company almost $200,000 annually which may have resulted in the hiring of additional staff.  Those employees would have produced additional taxes for the Provincial and Federal coffers.

Bear in mind this is only one of the hundreds of thousands of small/medium sized businesses in Ontario.  Imagine what would have happened if we had not contracted at those above market rates for the intermittent and expensive power generated by those many foreign wind and solar generators that rushed to Ontario to take our hard-earned dollars.

The time has come to treat Ontario’s largest employers with the respect they deserve by axing the Global Adjustment and the time-of-use pricing mechanism!

We should surmise those small/medium sized companies are not in favour of subsidizing large industrial complexes or those greenhouse operators producing marijuana!  Let’s level the playing field!

*Full disclosure! I calculated my average electricity line cost from my recent bill (adjusted for the “Electricity Cost Relief Program”) and it worked out to 9.11 cents/kWh

**The CFIB in a 2016 report stated Ontario had 1.4 million small/medium sized businesses.