Wind power and reliability: 180 degrees apart

An article posted on my blog on February 17, 2019 was related to IESO’s release of grid-connected (TX) 2018 Electricity Data. It disclosed the cost of electricity for the average Class B ratepayer had fallen ever so slightly from 2017, reducing costs by about $5 annually.  The savings on the electricity portion of the average bill may have been eaten up by additional delivery and/or regulatory charges, so was probably not even noticed by most ratepayers.

As I noted then, what caused rates to drop was that we consumed more in 2018 than 2019, resulting in less wasted generation. In 2018, Ontario’s total demand was 137.4 TWh (terawatt hours) — up from 2017 when we consumed 130.3 TWh, for an increase of 7.1 TWh or 5.4%.  Nuclear and hydroelectric generation in 2018 generated 92.5% of total Ontario demand, not including spilled hydro or steamed-off nuclear which is paid for via the GA (Global Adjustment).

As an example of less wasted generation, OPG reported in 2018 that due to SBG (surplus baseload generation) they spilled 3.5 TWh, whereas in 2017 they spilled 5.9 TWh. That was 2.4 TWh less wasted hydroelectric generation we didn’t have to pay for!

Since IESO’s release of the grid-connected data, we are now able to see exactly where all Ontario generation came from, including both grid (TX) and distribution-connected (DX) due to the recent release of the OEB report “Ontario’s System-Wide Electricity Supply Mix: 2018 Data”. The OEB report indicates total Ontario generation of 154.4 TWh in 2018 up from 2017 when it was 150.75 TWh.

About the same time as the OEB released their report, the Ontario Energy Report was also released and it includes both TX and DX generation in detail. It also includes specific information on our exports and imports of electricity plus individual capacities of our generation sources.

Looking at some of the specifics causing our electricity rates to soar since the advent of the Green Energy Act (GEA) in 2009, it is relatively easy to see the principal causes. Wind and solar generation’s inability to deliver power when needed, despite its “baseload” designation, has factored in rising costs in two ways. The first is its detrimental effect on the HOEP and the second is its preponderance to create surplus generation that must be exported, curtailed, spilled or steamed off.

The HOEP in 2017 was the lowest ever, averaging 1.58 cents/kWh increasing to 2.43 cents/kWh in 2018. That means our exports of 18.591 TWh in 2018 generated revenue of approximately $451.8 million ($24.3 million per TWh) but cost ratepayers around $2.138 billion.

That means we lost almost $1.7 billion. The bulk of our exports (15.531 TWh) were sold to New York and Michigan so $1.4 billion of the $1.7 billion in ratepayer costs went to provide cheap power to those two US States.

The further driver to increased costs can be blamed on what we pay wind** and solar generators. For wind it averages $135/MWh and for solar $445/MWh. In 2018 TX plus DX wind generation was 12.3 TWh and curtailed wind was 1.9 TWh for which we pay $120/MWh. Total wind generation costs in 2018 therefore were about $1.888 billion. Solar generation in 2018 from DX and TX connected plants was 3.5 TWh and cost $1.55 billion bringing costs for the two intermittent sources of “baseload” generation to $3.438 billion or about 22 cents/kWh.

The combined cost of losses on exports plus the costs of wind and solar was $5.1 billion.   Is it any wonder our rates are so high?

Perhaps the time has come for all energy ministries to recognize wind and solar are not “baseload” power as defined due to their intermittent and unreliable nature.

Wind and solar power’s designation should logically be changed from “baseload” power to “abstract” or “symbolic” power! That change would better reflect their ability to deliver power when needed.

 

PARKER GALLANT

*Includes both the GA and the HOEP (hourly Ontario energy price).

**IESO suggests we can only count on wind to produce at a level of 13.6% of its capacity.  For solar it’s at about the same level suggesting solar is (in IESO’s view) actually more dependable!

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Ontario Power Generation: where more means less

Back in late 2013, I noted that Ontario Power Generation or OPG had become the whipping boy for the Ministry of Energy. Now, it’s almost six years later, and not much has changed.  Just before my article appeared on Energy Probe, OPG had applied for a change to their “unregulated hydro”. They wanted it changed to “regulated hydro” which they got approved.  What that meant was they no longer would be dependent on receiving just the HOEP (Hourly Ontario Energy Price) market price for unregulated hydro.  The HOEP by then, had fallen due to the Liberal Government’s creation of the GEA (Green Energy Act) and the climb of the Global Adjustment which fell outside of the HOEP market price.

OPG recently released their 1st Quarter 2019 results. Both revenue and generation were up, marginally, by $19 million (1.3%) and .3 TWh (1.6%) respectively.  Nuclear generation was down, but regulated hydro was up with the latter increasing from 7.7 TWh to 8.2 TWh.

Those 8.2 TWh were produced by OPG’s 7475 MW of hydroelectric capacity in service. If one looks back to their 2008 1st Quarter* it indicated OPG had 3,332 MW of regulated hydro and 3,640 MW of unregulated hydro. In 2008 they generated 9.1 TWh; that means the 6,972 MW in service operated at 59.9% of their capacity and in the 2019 comparable quarter they operated at only 50% of their capacity.

In 2008 there was no spilling of hydro reported, but in 2019 they reportedly spilled 0.3 TWh. Producing less hydroelectric generation with a higher capacity seems strange. OPG spent $2.6 billion increasing capacity on the Mattagami River system and another $1.5 billion to increase generation capacity via “Big Becky” on the Niagara River system.  So, an additional 500 plus MW of clean hydroelectric capacity costing $4.1 billion was added but resulted in less generation (0.9 TWh less) than 2008.

Why?

The higher generation of hydroelectric power in 2008 had nothing to do with water levels as peak levels that year reached 75.3 metres versus 75.9 metres in 2019. In other words, there was no shortage of “fuel” for OPG’s hydroelectric plants in either 2008 or 2019.

What really happened was back in late 2008 former Premier McGuinty bragging about how the Melancthon EcoPower Centre (199.5 MW of wind capacity) had vaulted Ontario up to the point where it had 617.5 MW of wind capacity in operation. The following year Energy Minister George Smitherman rammed through the GEA (Green Energy and Green Economy Act) which led to the 2010 Long Term Energy Plan (LTEP), released by then Energy Minister, Brad Duguid. The LTEP sought 10,500 MW of renewable energy (7,500 MW of wind plus 2,500 MW of solar and the balance in biomass). The LTEP promised utopia with the creation of 50,000 permanent jobs. Duguid also promised us electricity rates would increase by 3.5% per annum and to help defray that increase they gave residential ratepayers a 10% reduction referenced as the OCEB (Ontario Clean Energy Benefit) which has since ended and was sort of replaced with the Fair Hydro Plan. We now know how those plans and events turned out!

As an example if one looks at the May “off-peak”** rate in 2008 and compare it to 2019 you would note it jumped from 2.7 cents/kWh to 6.5 cents/kWh which is a 140.7% increase and almost five times what Duguid told us rates would increase.

The advent of wind and solar contracts granted “first to the grid” rights at astronomical prices drove up the costs of electricity and their intermittent and unreliable nature required excess generation (generally gas plants) to sit at the ready for when the wind wasn’t blowing or the sun wasn’t shining. Those changes drove up the costs of electricity and coupled with the requirement to grant those “first to the grid” rights to wind generation meant hydro was, and still is, treated as “less qualified” renewable energy.

Ontario could have considerably more clean hydroelectric generation if we were devoid of expensive, above market wind and solar contracts! Instead, because of the lack of a cost benefit analysis by the previous government, Ontario’s ratepayers are stuck with expensive electricity until those contracts expire. At the same time, the taxpayer owned entity OPG suffers from revenue shortfalls for the $4.1 billion it spent to increase their hydro capacity, yet we ratepayers must still pick up the costs of that spending without any of the benefits.

The time has come to let OPG use their full hydroelectric capacity!

PARKER GALLANT

 

*The year before the GEA was passed and the recession occurred.

**Off-peak averages approximately 66% of most residential bills.

Hydro One customers take it on the chin–again

Delivery charges ballooning, according to recent financial report

Hydro One released their first Quarter results on May 9, 2019: reported revenue was up 15.4 % ($183million) compared to the first Quarter of 2018.  The higher revenues were “driven by higher distribution revenues [up 30.5% from the comparable quarter] primarily due to OEB’s decision on the 2018 and 2019 distribution rates.”

With that in mind and, as a Hydro One customer who just received the monthly bill, I checked the relative percentage costs of their “delivery” charge. It was 45% of the bill (before taxes). Another quick calculation by simply dividing the delivery costs by the monthly consumption indicated a cost of 7.31cents/kWh for Hydro One’s delivery charges.   Electricity costs were 52% of the bill (8.5cents/kWh) and “regulatory charges” represented the balance.

Intrigued with these findings, I then calculated Hydro One’s comparative delivery costs for the same quarters in 2018 and 2019 to determine how the two rate increases granted by the OEB for their distribution business affected the same calculation—cost per kilowatt hour! Hydro One’s quarterly report provides the details on both GWh (gigawatt hours) distributed and the cost of “Purchased Power” so the basic calculation is the same as that for my bill.

For the first Quarter of 2018, Hydro One reported their distribution was 7,406 GWh which produced gross revenue of $1,145 million, and the cost of Purchased Power (PP) was $751 million, meaning “Distribution Revenue” net of PP was $394 million. Dividing that $394 million by the 7,406 GWh distributed indicates the average distribution cost was 5.32 cents/kWh.

For the first Quarter of 2019, Hydro One reported their distribution was 7,738 GWh (+4.5%) producing gross revenue of $1,321 million (+15.4%) and the cost of PP was $807 million (+7.5%) producing net Distribution Revenue of $514 million (+30.5%). Dividing that $514 million by the 7,738 GWh distributed indicate the average distribution cost was 6.64 cents/kWh.

So, based on these calculations, what do we get? Average delivery costs for Hydro One customers increased from 5.32 cents/kWh in 2018 to 6.64 cents/kWh in the comparable 2019 quarter which equates to a 24.8% increase year over year. That far outpaces the cost of living increase year over year!

Despite the 15.4% ($183 million) increase in revenue compared to the first Quarter of 2018, Hydro One’s net income fell from $222 million to $171 million as operations, maintenance and administration (OMA)  costs jumped by $146 million.  Interestingly enough, of the $146 million OMA increase, the financial statements attribute $140 million of it to the cost of the failed Avista acquisition.  In an attempt perhaps to appease shareholders, the quarterly financial statements suggest “Adjusted net income attributable to common shareholders” was $311 million.  If they earned that for the ensuing three quarters, net income would be $1.244 billion.  If one measured that income on an equity base of $9,622 million (Hydro One’s year-end equity December 31, 2018) it would represent a 12.9% ROE (return on equity).

The current OEB (Ontario Energy Board) allowed ROE is 8.98% which suggests the OEB either treats Hydro One as “special” or sets the ROE without enforcement. The first point under the OEB’s “Mandate” is “Establishing rates and prices that are reasonable to consumers and that allow utilities to invest in the system.”

Perhaps it’s time for the OEB to follow their mandate, as a 12.9% ROE exceeds the current allowed ROE by a wide margin. All ratepayers should be aware Hydro One has five distribution rate applications outstanding with the OEB according to their latest quarterly report!

Let’s all hope the OEB has a serious look at those applications and actually allows rates to be set that are “reasonable to consumers”!

PARKER GALLANT

How Ontario’s “little” electricity customers help out the big ones (with billions)

Class B Ontario ratepayers support Class A ratepayers–$6.2 billion and growing

It was almost six months ago when the Ontario Energy Board’s (OEB) Marker Surveillance Panel (MSP) released a review of the Industrial Conservation Initiative (ICI). The review looked at the impact it had on pricing since its launch in September 2011.

The ICI came into being after extensive lobbying for a reduction in electricity pricing by the Association of Major Power Consumers of Ontario (AMPCO) when Brad Duguid held the position of Minister of Energy.

The ICI model simply requires the “A” Class user to pick five “peak demand” hours over a year in order to gain a sizable discount to the price they pay.

An article written by yours truly, appeared shortly after the review’s release and pointed out the cost to Class B ratepayers, namely, residential and small/medium sized businesses. The article noted the failure by the OEB to act on its role which is: “The OEB supports and guides the continuing evolution of the Ontario energy sector by promoting outcomes and innovation that deliver value for all Ontario energy consumers.” The article noted it took the OEB seven (7) years to realize “the ICI as presently structured is a complicated and non-transparent means of recovering costs, with limited efficiency benefits.”

One should wonder if the recognition was a reflection of a change in government or, a realization the “value” didn’t apply to “all” of Ontario’s ratepayers the OEB is supposed to consider in its innocuous decisions!
The support of Class B to Class A ratepayers as of the end of 2017 “has shifted nearly $5 billion in electricity costs from larger consumers to smaller ones. In 2017, the ICI shifted $1.2 billion in electricity costs to households and small businesses—nearly four times greater than the amount in 2011.”

Almost six months have transpired since issuance of the MSP review and nothing has changed. Another year has gone by (the review reflected cost transfers to the end of 2017) and 2018 duplicated the shift of 2017 so add another $1.2 billion and push the total transfer to $6.2 billion since mid-September 2011.

What that represents is an average subsidy to Class A ratepayers of over $1,200 for each of the approximately 5.1 million Class B ratepayers over the 7 ½ years since the ICI came into existence.

The Market Surveillance Panel made several observations on how the ICI could be made more efficient and/or enhanced to make it fairer. The Panel’s first two observations would help to reduce the burden on Class B ratepayers so perhaps its time the OEB and/or the Ministry enable those changes which are:
*Costs that are not related to the fixed capacity costs of needed generation are removed from the Global Adjustment and recovered by other means.
*Only the cost of peaking generation is recovered based on consumption during peak demand hours; the cost of non-peaking generation should be allocated such that all consumers that benefit from that capacity pay for that capacity.”

Almost a year ago, many in Ontario voted for the Ontario Progressive Conservative Party, handing them a majority government. One of the chief reasons the Liberals were defeated was their mishandling of the energy file. Based on the foregoing, most voters anticipated the new Ford-led government would have tackled the file with all the might one would expect with the election promise that “help is on the way” followed by the declaration of Premier Ford in his victory speech stating; “My friends, help is here.”

The opportunities to demonstrate the “help” are there for all to see such as those recommended by the MSP.

The government could also use regulations to enforce noise controls (audible and inaudible) on industrial wind turbines, they should insist the UNIFOR wind turbine in Saugeen Shores be removed, they could cancel the 100 MW Nation Rise project to save future ratepayers hundreds of millions, and they could insist the OEB reflect its “vision” which claims it is responsible for: “promoting outcomes and innovation that deliver value for all Ontario energy consumers.”

Ontario’s Class B ratepayers are waiting for “help” to arrive and see the OEB deliver actual value!

Oh, and a thank you from the Class A ratepayers would be nice too!

PARKER GALLANT

Record profits for Ontario Power Generation

(but there’s a catch…)

Ontario Power Generation or OPG reported their results for the year ended December 31, 2018 on March 7, 2019 and for the fourth year in a row profits were up.

Net income after taxes attributable to the “shareholder” set a record* coming in at $1.195 billion versus $860 million in 2017.

Both 2017 and 2018 net income were affected by the sale of OPG’s properties. Their Head Office sale generated a 2017 after-tax gain of $283 million, and the sale of the Lakeview property generated an after-tax gain in 2018 of $205 million.

Putting aside those one-time gains, the increase in net income of $335 million (up 39%) from 2017 to 2018 is attributable to the $379 million in additional revenue generated by OPG’s nuclear fleet and was, co-incidentally, their total revenue gain, raising OPG’s revenue from $5,158 million in 2017 to $5,537 million in 2018. The increase in nuclear generation year-over-year was nominal, rising from 40.7 TWh (terawatt hours) to 40.9 TWh.

While this may be good news for the province, there is a “catch” : this all means ratepayers will eventually have to pay for the bulk of increased revenue when the Fair Hydro Act ends. The revenue gain came about principally because the OEB granted OPG a substantial rate gain on their nuclear generation amounting to approximately one cent per kWh or about $9/MWh.**

Other good news in the financial report was the OMA (operations, maintenance and administration) costs remained relatively flat as did fuel expenses.

Looking back:                                                                                                                                                    As noted above, OPG achieved record profits in 2018, but revenue was still not a record.  If we look back and compare 2018 with their results for 2008, we find that revenue was actually higher, coming in at $6.082 billion or $545 million (9.8%) higher.  In 2008 however net income was affected by a substantial increase in income taxes and by the recession which affected bond and stock markets (down by 35%) and OPG’s income from the $9.2 billion “Nuclear fixed asset removal and nuclear waste management funds”.

The year 2008 is the year prior to introduction of the GEA and the FIT and microFIT programs which drove up the cost of power in the province and affected OPG’s ability to increase its revenue and net income. First-to-the-grid rights granted to FIT and MicroFIT participants (wind and solar) meant OPG suffered the effects of the HOEP (hourly Ontario electricity pricing) in respect to their unregulated hydro.

In subsequent years the HOEP fell, resulting in OPG’s appeal for that capacity (3,631MW) to become regulated. The appeal was granted!

Another aspect affecting hydro generation profitability is fuel costs which were $254 million for the 2008, 36.4 TWh generated and climbed to $334 million for the smaller 29.8 TWh generated (not including the 3.5 TWh spilled) in 2018. OPG were forced to write-off their fossil fuel (coal) plant costs in 2004, but in 2008 they were still contributing to Ontario’s energy needs supplying 23.2 TWh out of a total of 107.8 TWh from OPG’s generating sources.

If one looks at a simple pricing cost per kilowatt hour, in 2008, dividing OPG’s gross revenue of $6.082 billion by the 107.8 TWh generation the per kWh cost for ratepayers was 5.6 cents/kWh. Doing the same simple calculation for 2018 using gross revenue of $5.537 billion for the 74 TWh generated provides a cost of 7.5 cents/kWh for a 1.9 cents/kWh (up 33.9%) increase. Over the ten years, in simple terms, the average annual increase is approximately 3% and above the inflation rate; however, without the GEA and the FIT/microFIT programs, it is likely that OPG’s costs would have been much closer to annual inflation rates.   The foregoing is borne out if one looks at the IESO year-end reports for 2008 when they state the cost per kWh averaged 5.8 cents/kWh compared to 2018 when their year-end report shows a cost of 11.5 cents/kWh.  That translates to a 5.7 cent/kWh increase — a jump of 98.3% over the same 10-year period, or triple OPG’s costs.

In retrospect one wonders if the proponents for renewable energy (industrial wind turbines, solar panels and biomass) such as Gerald Butts, who held sway over George Smitherman (former Ontario Minister of Energy) and former Ontario Premier Dalton McGuinty seriously contemplated the results of their pilgrimage?

Did the damage done to the province benefit or hurt peoplekind?

You be the judge!

PARKER GALLANT

*Page 5: Financial and Operational Highlights

**Page 4: Annual Information Form

Hydro One latest financials look positive — until you look beneath the surface

Lots of “spin” in a recent news release. 2019 doesn’t look so rosy

On February 21, 2019 Hydro One issued a press release announcing their fourth quarter and year-end 2018 results.

The market shrugged.

That was in spite of the spin of the release titled “Hydro One Reports Positive Fourth Quarter Results”. Some media reports echoed the Hydro One press release without, I presume, looking at the financial statements.

Because if one were to examine their results for the quarter, it is obvious why the market shrugged. Revenue (net of purchased power) was up by $41 million (5.3%) due to higher demand for electricity for the transmission (up 2.5%) and distribution (up 3.2%) businesses. Offsetting the increased demand and related revenue, was a year over year $64 million increase (26.2%) in OMA (operations maintenance and administration) costs for the comparable 2017 quarter.

The jump in after-tax net income to $162 million from$155 million, attributable to shareholders, was up $7 million or 4.5%. However, if it hadn’t been for a huge drop in income taxes (from $38 million in 2017 to only $1 million in 2018’s fourth quarter), Hydro One’s results would have been upsetting to shareholders.

If Hydro One had taken the hit related to the “termination fee” (US$ 103 million) payable to Avista shareholders on the failed acquisition of that company, Hydro One would have reported a loss for the quarter. This is based on Note 4 which stated: “On February 1, 2019, Hydro One entered into a credit agreement for a $170 million unsecured demand operating credit facility (Demand Facility) for the purpose of funding the payment of the termination fee payable to Avista Corporation as a result of the termination of the Merger Agreement and other Merger related costs.”

The first Quarter results of 2019 will presumably reflect the unaccounted-for cost of the termination fee.

While year-over-year results report a favourable trend with revenues (net of purchased power) up 6.5% or $204 million, it was mainly driven by higher demand for distribution customers (revenue up 2.1 %) and higher peak demand for transmission clients (revenue up 11.1%).  If Hydro One had taken the Avista “termination fee” hit of $170 million, net income for shareholders would have been below 2017’s reported $658 million instead of the $778 million (up 18.2%) claimed for 2018.  It’s all about the spin!

Needless to say, scanning the notes to the financial statement indicates Hydro One received rate application approvals from the OEB (Ontario Energy Board) that will affect both their distribution and transmission customers on a go-forward basis. Additional rate applications await rulings from the OEB.

It would appear Hydro One may well experience a decline in profitability in 2019 due to the $170 million Avista termination fee. Additionally, the possibility of reduced demand may surface as ratepayers will not see a repeat of the 25% Fair Hydro Act’s deferral which may have played a role in increased consumption.

We shouldn’t expect the Ford government to deliver the other 12% reduction promised leading up to their election in June 2018 as their accomplishments so far, on this file, have been quite disappointing. They failed to cancel wind and solar contracts that will impact future rate increases.

It appears the former Hydro One CEO has impacted shareholders and possibly ratepayers considerably more than the “Six-Million-Dollar” cost suggested by Premier Ford. While the current Hydro One’s Board of Directors has agreed to restrict the pay to a new CEO to a maximum of $1.5 million per annum it would take 35 years to recoup just the Avista termination costs. An unlikely event!

An ongoing concern is the possible effect on ratepayers, should Hydro One submit a request for a rate increase to the OEB (Ontario Energy Board) to cover the above Avista termination fee and other (already expensed) related costs for the boondoggle.

Ratepayers should hope — and expect — the Minister responsible (Greg Rickford) will issue a clear directive to the OEB instructing them to not grant a rate increase to cover those costs! He should do that despite the province still being a 47% shareholder of Hydro One.

PARKER GALLANT

Is the IESO finally trying to get it right?

The baby’s not happy… are his parents being scammed?

One of the IESO’s responsibilities is to ensure Ontario ratepayers are billed fairly. That’s been a challenge with more than 100 “directives” from the former Liberal government. First in a series

July 30, 2018

Ontario’s Independent Electricity System Operator (IESO) is responsible for monthly settlement (dollars in and dollars out) with all LDC (local distribution companies), transmission companies (Hydro One) and with thousands of generators of various stripes connected to the TX (transmission gird) and DX (distribution grid).

In order to capture the vagaries of what the monthly settlement encompasses, the IESO have a 164-page market manual entitled, “Settlements Part 5.5 Physical Markets Settlement Statements Issue 69”.  Its effective date was March 7, 2018, the fifteenth update of the manual over the last three years!

I’m confident the 15 recent updates were a result of directives emanating from the desks of former Liberal Ministers of Energy, namely Messrs. Bob Chiarelli and his successor Glenn Thibeault, and include the actions related to the Fair Hydro Act and the rebate of the 8% Provincial portion of the HST.

The directives and the changes they entail indicate the IESO is trying to “get it right” in their responsibility in dealing with the variables. Those variables were created by the Liberal government as it toyed with the energy portfolio over the last 15 years in so many ways via those directives (117 to OPA/IESO alone).  As an example, IESO in 2017 was responsible for settling about $16 billion related to the costs of generating electricity (what the public is charged for the combination of the HOEP (hourly Ontario electricity price) and the GA (Global Adjustment).

Ensuring ratepayers are correctly billed and generators are paid no more than they deserve places a lot of responsibility on IESO to ensure ratepayers are not being scammed!

On the latter point it is worth noting a CBC article from just seven months ago stated:  “Hydro customers shelled out about $100 million in ‘inappropriate’ payments to a natural gas plant that exploited flaws in how Ontario manages its private electricity generators”. The article said “gaming” of the system was discovered by the Ontario Energy Board (OEB) and contained this statement about the IESO: “the investigation found IESO did little checking into the details of Goreway Power Station’s billings.

Data not audited

That is somewhat disconcerting. When I recently asked IESO about the Fair Hydro Plan’s “variance account” for the month of May 2018 being very high ($309.9 million), they answered “Please note that settlement data submitted to the IESO by the LDCs is not audited by the IESO (audit responsibilities reside with the OEB) and is processed as submitted.”

In viewing IESO’s December 31, 2017 financial statements, their independent auditors (KPMG) attempt to capture their responsibilities, listing 30 of them as if they were simply the Ten Commandments. The one directing the activities associated with the money movement related to the FHP (Fair Hydro Plan) says: “engaging in activities related to making payments to and receiving payments as contemplated under the FHP and related settlement activities”.

The disconcerting part of this is that the Fair Hydro Plan alone will (according to the Financial Accountability Office of Ontario) amount to approximately $1,750 million on an annual basis — the 8% HST provincial rebate will add another $1 billion annually.  That certainly leaves the taxpayers and ratepayers of the future exposed to any one of the LDC “gaming” the system, or inadvertently submitting incorrect information.

Can we current and future ratepayers trust that Hydro One and all of the other LDC will submit correct “data” to IESO and that it will be properly audited by the Ontario Energy Board?

Stay tuned!

Second installment to appear tomorrow