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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