How to get those electricity bills down

(Or not make them worse)

In my volunteer work with Wind Concerns Ontario, a coalition of community groups, individuals and families concerned about the impact of industrial-scale wind power generation in Ontario, I was pleased to be asked by Global TV News to provide an opinion on what needs to be done to help the citizens of this province with their electricity bills.

Here is our contribution to the feature, published on Global’s website:

The following is by both Parker Gallant, a retired banker who now analyses Ontario’s energy sector and is the author of the blog “Energy Perspectives” as well as Jane Wilson, the president of Wind Concerns Ontario.

The Ontario government undertook its program to add renewable power without proper cost-benefit or impact analysis.

Now we have electricity bills that are the fastest rising in North America. The rich contracts awarded to huge corporate wind power developers are a factor.

Here’s what we suggest:

Immediately cancel Large Renewable Procurement (LRP) II that is currently “suspended.” With its target of acquiring 1,000 megawatts (MW) of more renewable capacity — it’s not needed and will further add to consumers’ power bills.

Cancel the five wind power contracts awarded in 2016 under LRP I and save electricity customers about $65 million annually or $1.3 billion over 20 years. Cancellation costs will amount to a small fraction of the annual cost. Cancelling approved but not yet built wind power projects and the new FIT 5.0 program will also save money.

Cancel “conservation” spending of $400 million annually. Ontario has already cut back on power use by more than 12 per cent since 2005 when consumption was 157 tWh to 2015 when it had fallen to 137 tWh. Do this and save immediately on electricity bills.

The Ontario government’s about face

September 21, 2016

Recent events in Ontario present an interesting way of looking at things. First was a request from the Ontario government (It looks like a petition) aimed at getting voters “to support lower hydro bills for Ontarians.”  The request is also being supported by letters written by Liberal MPPs addressed to “Dear friends” followed by, “I am pleased to share with you that our government has announced important action to reduce the cost of electricity bills for families and businesses, in addition to reducing northern, rural and remote bills even more.”

The immediate reaction is, hey, weren’t you the energy ministers, and their leaders Dalton McGuinty and Kathleen Wynne the ones that increased the rates in the first place? And didn’t you do this via the Green Energy Act (GEA)? Didn’t you issue more than 100 directives to the Ontario Power Authority (now merged with IESO), the OEB, Hydro One, IESO and OPG telling them what to do?

So why the about face? Unless it is meant to place the blame on all those foregoing entities when the truth is, oppressive management and the GEA decreed how the bureaucrats should behave while removing democratic rights from municipalities.

The second event that caught my attention was the proroguing of the Legislature so Premier Wynne could present her case for how to resolve the energy “crisis.” (Never mind her recently appointed Energy Minister Glenn Thibeault denied it was a crisis in a recent interview with Shirlee Engel of Global TV.)

Minister Glenn Thibeault’s current behavior is interesting. Several years ago when he was Executive Director of the United Way of Sudbury he said this about poverty in Ontario:  “Every year, right before school starts, our phone at the United Way office starts ringing off the hook.We have mothers and fathers calling us, some crying, as they need to decide whether to buy food or buy a backpack and school supplies for their child. That isn’t right and I’m glad our donors and many of our community partners have stepped up to the plate so we can help a few hundred children.”

Now here we are with families having to choose whether to buy food or heat their homes, and former NDP, former United Way exec Thibeault is the Minister of Energy. I’m sure he has heard cries from mothers, fathers and seniors about energy unaffordability since he commenced drinking from the “fire-hose” he suggested is the Ministry of Energy portfolio during his interview with Global TV.

So why is he not speaking up now for the poor?

Parker Gallant

Ontario’s present and future lashed by electricity bills

Building Ontario Up

“Building Ontario Up” — a PR slogan doomed to failure

August 21, 2016

On July 18th Premier Kathleen Wynne bragged about Ontario’s  2016 first quarter GDP growth outpacing Canada, the U.S. and all other G7 countries via news release.  The Premier said,  “Our economic plan is working, and we are building a strong and prosperous future for our province.”

Three weeks later, StatsCan announced Ontario suffered job losses in July of 36,100 — almost 19,000 of them were full-time jobs.  In fact, Ontario’s job losses exceeded total job losses in Canada of 31,200 net jobs.  Needless to say, that didn’t merit a news release from the Premier’s office or Finance Minister Sousa either, about how the Ontario Liberal government might not be “building Ontario up”.

The StatsCan announcement also didn’t signal a change in Ontario’s unemployment rate which is mired at 6.4%. Compare that to the U.S. unemployment rate (June 2016) of 4.9%, or New York’s at 4.7%, and Michigan’s at 4.6%.

Why New York and Michigan love Ontario: cheap power

New York and Michigan are the two neighbours who are the major beneficiaries of Ontario’s management of its electricity system. In 2015, we exported 8,571 gigawatts (GWh) to New York and 10,248 GWh to Michigan at an average price of 2.36 cents per kilowatt hour (US $1.82 cents/kWh). Those sales generated revenue of $444 million but cost Ontario ratepayers $2.3 billion. The loss on those exports of almost $1.9 billion was included on our hydro bills.

That 18,819 GWh of power sold at huge costs to Ontario ratepayers. Here are the facts.

  • The power sold at a loss was enough to have supplied 2 million “average”1. residential ratepayers with power for a year
  • The losses on those exports could have paid the “Total dollar amount of arrears for eligible low income customer accounts in arrears at year end” December 31, 2015 for 146 years
  • The “total dollar amount ($172.6 million) of arrears for residential customer accounts in arrears at year end” could have been paid over 11 times
  • The “total dollar amount ($106 million) of arrears for Hydro One residential customer accounts in arrears at year end” could have been paid over 18 times
  • The power sold represented enough money2. to cover the full annual cost of 766,000 Hydro One, low-density “average” ratepayers

It is impossible to know what the generation sources were for the exported power, but with combined wind (10,765 GWh) and solar (3,026 GWh) generation representing 13,791 GWh in 2015, one must assume a lot of wind and solar power traveled to New York and Michigan. Evidence of that was highlighted in a recent study from the Canadian Nuclear Association: “Wind makes up 34% of the provincial night time surplus.”

Without those surplus exports, one could assume the Hourly Ontario Energy Price or HOEP would have been higher in that trading market, resulting in reduced costs to Ontario’s ratepayers.

Looking back to 2009 at the posted OEB average electricity price at the end of that year (6.07 cents/kWh) and comparing it with the average electricity price at the end of 2015 (10.70 cents/kWh), the annual increase was 12%.

It is worth noting that distribution rates have also increased as much (or more) for some distributors such as Hydro One.

If one examines U.S. residential electricity prices, we find the average all-inclusive (generation, transmission, delivery, state taxes) price in the U.S. at the end of 2009 was 9.82 cents/kWh and at the end of 2015 had increased to 12.67/kWh for residential clients. This suggests the average annual increase in the all-in price of electricity in the U.S. was 4.8% annually versus the Ontario 12% increase for just the “electricity” line.

Ontario has managed to raise the price of the raw commodity (electricity) almost three times faster than the U.S. has increased all-in rates.

It’s costing us a fortune, so —let’s buy more!

What does Ontario plan to do? The government continues to push ahead with their agenda to acquire more unreliable and intermittent wind and solar generation, with a new bid process beginning in 2017. That’s in spite of pricing Ontario out of the market to attract new industry, and creating “energy poverty” that now affects 12.4% (566,902 as reported by the OEB) of ratepayers. Many were in arrears on their electricity bills at the end of 2015.

 

Recently appointed Energy Minister Glenn Thibeault told Shirley Engel of Global TV News “I’m not using the word crisis” when asked about the massive response of emails and phone calls to Global following stories on painful electricity bills in Ontario.  Global was successful in getting the OEB to release the “arrears” statistics mentioned above.  In the “Backgrounder” to the release of those statistics, the OEB opened with this statement: “The Ontario Energy Board is the regulator responsible for protecting energy consumers in Ontario.”

Why has the OEB failed to protect energy consumers, in essence failing to do its job? You would be obliged to point the finger at the Ontario Liberal government for its their passing the Green Energy Act, and the more than 100 directives given to the Ontario Power Authority (merged with IESO January 1, 2015), IESO, Hydro One, OPG and the OEB by past and present Energy Ministers going back to Dwight Duncan.

Premier McGuinty and now Premier Wynne believe they know far more than the people running those organizations and have ensured their dictates are followed.

“Building Ontario up” is a PR slogan. Its realization is condemned to failure, mostly because of the damage done to a province that once could claim some of the cheapest electricity rates. With the most expensive electricity rates in North America now, the only thing the Ontario Liberal government can claim they are “building up” are the number of ratepayers living in energy poverty.

Parker Gallant

1.The OEB defines an average residential ratepayer as one consuming 750 kilowatt hours (kWh) per month.

2.The OEB’s “Bill Calculator” tells you the monthly cost is $206.64 so annually it is $2,479.68.