One spring day just cost you millions

A happy day for power importers south of the border. For you? Not so much…

April 9, 2017 was a perfect day to demonstrate the mess the current Ontario government could have expected if they had simply done a cost-benefit study of the electricity sector prior to imposing the GEA (Green Energy and Green Economy Act).

The April 9th IESO generator report and Daily Market Summary provide highlights of many of the mistakes the Liberal government has made, as does my friend Scott Luft’s “Daily Electricity Supply Estimates.”  IESO’s report fails to provide details of distributor connected (DX) generation (principally solar and wind) whereas Scott estimates those along with the curtailment of wind, solar, hydro and nuclear generation. His estimates have proven to be on the conservative side in the past.

IESO’s “Market Summary” shows Ontario Demand was only 294,600 MWh (megawatt hours) which Scott noted was the “3rd lowest Ontario Demand day in the history of the market” and that day, along with five other recent “lowest Ontario Demand” days have all occurred within the past 12 months.   How low is demand? Scott says the six low demand days were lower than any day during the massive blackout of 2003.

Seriously.

Demand in Ontario on April 9th of 294,600 MWh could have been easily supplied by nuclear generation (236,400 MWh including 14,800 MWh steamed-off) and hydro generation (101,900 MWh including 1,200 MWh spilled, and 2,600 MWh from DX).  Those two clean, emission-free power sources could have delivered 338,300 MWh, leaving 43,700 MWh available for sale to our neighbours.  The 338,300 MWh should have cost Ontario ratepayers $20,554,000 based on what we pay on average for nuclear and hydro generation.  That would equate to 6.1 cents per kilowatt hour (kWh) combined!

As it happened, Sunday April 9 saw 51,400 MWh of net exports (exports less imports) sent to our neighbours in Michigan, New York and elsewhere, along with an average payment of $3.08/MWh. They gladly took those free MWh along with our payment of $158,312.00.

Sunday April 9th also saw Ontario’s ratepayers pick up the bill for transmission (TX) and DX-connected wind of 25,700 MWh and another 46,300 MWh of curtailed (one of the highest curtailed days ever) wind at a total cost of $9.290 million.  If we calculate the cost for just the accepted wind generation (25,700 MWh,) the cost per MWh becomes $361/MWh or 36.1 cents/kWh.

Ontario ratepayers also picked up the bill for the 10,533 MWh of solar generation (DX and TX) and the 667 MWh of solar estimated as curtailed. Solar’s costs were $5.280 million, which means the delivered generation cost last Sunday was $501.28/MWh or 50.1 cents/kWh.

Meanwhile, those same ratepayers picked up a $4.143 million bill for gas generators who delivered 5,773 MWh (TX and DX) at a delivered cost of $717.12/MWh or 71.7 cents/kWh. Scott Luft noted the 5,773 MWh delivered to the system by the gas plants set a record low.*

The cost of unnecessary power for ONE DAY?

The total cost of the unneeded supply of power on April 9th coming from wind, solar, gas and biofuel ($368,000) plus the payment made to export ($158,312.) came to over $20 million.

What that means is, this one day of generation, Ontario’s ratepayers are obliged to pay for, was $40.8 million or 13.6 cents/kWh yet the 294,000 MWh they actually consumed was produced at a cost of $17.9 million (not including the $2.7 million loss on exporting).

Premier Wynne has admitted her government has made mistakes on the energy file. The “mistake” on that Spring day turned out to be a burden on all of Ontario’s ratepayers (rich and poor) with the extra cost of over $20 million in order for the Minister of the Environment and Climate Change and Premier Wynne to be able to claim the “cap and trade” tax is driving down emissions in the energy sector, by reducing generation from fossil fuels (gas).

They are not likely to mention that anyone using electricity from Ontario’s generators would have had to more than double — 13.8 cents/kWh instead of the 6.1 cents/kWh — so they could make that claim!

* Lower gas generation will allow Glen Murray, Minister of the Environment and Climate Change to claim the “cap and trade” tax is working.

How much did Premier Wynne’s hydro “mistake” actually cost?

Five months ago, Premier Kathleen Wynne admitted to the delegates at the annual Ontario Liberal Party convention her government “made a mistake” allowing electricity rates to rise so high.  Those rates have actually soared, increasing by 80.9% from 2009.

Comparing Ontario electricity rates to other indicators such as inflation, shows just how bad the situation is. Comparing the IESO (Independent Electricity System Operator) Monthly Summaries for January and February 2009 with the same two months in 2017, the combined costs of HOEP (hourly Ontario energy price) plus the Global Adjustment (GA) show costs per kilowatt hour (kWh) have increased from 5.85 cents/kWh to 10.58 cents/kWh. That is an 80.9% increase.  Average inflation over the same time-frame has increased about 14%.   (The reader should note the 2009 and 2017 costs are before HST so the 8% reduction commenced January 1st has had no effect on contracted or regulated electricity rates.)

So how bad? The cost of the basic commodity has increased by almost six times the inflation rate!

Commodity cost is way up

Reviewing the IESO Monthly Summaries for the two-month periods in 2009 versus 2017 also shows Ontario demand fell by 7% or 1,713,000 MWh (1.7 TWh). The Summary reports indicate the 24.43 TWh representing Ontario demand in 2009 cost $58.49 million/TWh or $1,429 million for January and February. The 22.7 TWh of Ontario demand in 2017 cost $105.78 million/ TWh or $2,330 million for the same two months.  That represents an increase in the commodity cost of electricity of $901 million for 7% less electricity — an average monthly increase of $450 million.

So, why?

Exports

One of the reasons was the drop in the market price as the HOEP fell from an average of $51.93/MWh in 2009 for the two months to $21.56/MWh in 2017 while the GA jumped from an average of $6.56/MWh in 2009 to $82.27/MWH in 2017. What that means is, the loss on exports from Ontario in 2009 cost Ontario ratepayers $13.1 million and in 2017 cost ratepayers $174.2 million as the GA costs are not included in the sale of exports via the HOEP.

OK, of that $900+ million increase, we have $174 million found … $727 million to go!

Wind power

Another obvious cause of the big jump was generation and payment for curtailment of power from industrial wind turbines (IWT). Back in the early part of 2009, Ontario had approximately 800 MW of IWT capacity; in the early 2017 we have about 4,550 MW of capacity.   According to my friend Scott Luft, who uses IESO data to estimate the generation and curtailment of IWTs,  in 2009 the turbines delivered almost 395,000 MWh in January and February. In 2017, it’s a different story: generation and curtailment combined jumped to about 2,926,000 MWh.

The contracted wind power prior the passage of the Green Energy Act is estimated to be at the rate of $90/MWh, whereas wind power contracted for after the Act was at $135/MWh (plus a cost-of-living annual increase) meaning they currently are estimated at $140/MWh. The math on the 2009 generation therefore shows a cost of $35.5 million and the 2017 generation/curtailment cost becomes $409.6 million.  The increased cost of wind from 2009 is ($409.6 million less $35.5 million) $374 million.   Deducting the $374 million from $727 million leaves $353 million to find to get to $901 million!

Gas

Since 2009, more than 3,300 MW of gas plant capacity has been added to the Ontario grid. Its addition was basically to back up the wind and solar capacity (which is unreliable and intermittent) to ensure sufficient generation is available during renewables’ failure and high demand periods.  The private sector companies investing in those plants are paid for their capital investments amortized over their life span. When generating electricity they receive fuel costs plus a nominal markup. Payments details are not available in the public domain, but it is understood payments contracted are per MW of capacity, and  estimates given are $8/15,000 per MW per month.  Assuming the 3,300 MW of capacity secured since 2009 is at the mid-range ($12,000 per MW) the cost to ratepayers is $79 million (3,300 X $12,000 X 2 months).

That $79 million means we are still looking for $274 million.

Consuming less but paying more

IESO shows ratepayers consumed 1.7 TWh less in the first two months of 2017 than in 2009, but paid more. That is evident in OPG reports.  As OPG has not released its 2017 1st Quarter report estimates are based on the 2016, 1st Quarter report.  First we estimate spilled (wasted) hydro was 1.2 TWh at a reported cost of $44 million/TWh so that cost ratepayers $53 million.   The 21.0 TWh produced by OPG in the 2016, 1st Quarter generated average revenue per TWh of $70.4 million.  Estimating the first two months of 2017 generation at 14 TWh results in a cost of $985.6 million.  In 2009 OPG generated 25.6 TWh at an average of $57.8 million/TWh. Again estimating the total cost of the 17 TWh generated by OPG in the first two months produces a cost of $982.6 million so adding the $3 million to the spilled water cost shows an increase of $56 million.  Subtracting $56 million from $274 million means we are looking for the last $218 of the increase.

Solar, conservation, bio-mass and sundry

We assume the balance of the increased 2017 versus 2009 costs came from solar and bio-mass with a portion from the conservation program. Based on Figure 23 “Total Global Adjustment by Components” of the IESO Summary report we can estimate the costs of each of those for the two months.  It appears conservation spending (absent in 2009) represented about $50/55 million for the first two months of 2017 and bio-mass (incented by the FIT and MicroFIT programs) generated costs of around $40 million.  Solar (low during winter months) generated a minimum of $100/$120 million in costs for the two months based on the IESO Figure 23.  While those are “best” estimates to get to the increase of $901 million for the two months, we have not included increased costs from the IESO and OEB budgets which have both increased.

“No checks” in the system

An article recently appeared in the Globe and Mail written by George Vegh, former general counsel to the OEB.  This paragraph is perhaps why Premier Wynne admitted to her “mistake”

“Generation procurements are determined entirely by the government. The system operator – the Independent Electricity System Operator (IESO) – implements government directives. Neither the Ontario Energy Board nor any other independent regulator reviews these procurements. There are no independent criteria, no cost-benefit analysis, no consideration of the need for the procurements, and no review of alternatives. In short, there is virtually no check on the power to procure supply.”

 

What we have in Ontario is a “mistake” that will continue to cost Ontario ratepayers and taxpayers billions for years to come.

Admitting a mistake is one thing, doing something about it is another: Premier Wynne needs to recognize the Ontario Liberal government’s error, kill the Green Energy Act, and halt continued procurement of power from unreliable and intermittent wind and solar generators!

Ontario Power Generation report: good news and bad news

Ontario Power Generation (OPG) just released its annual report for the year ended December 31, 2016.

It’s a mix of good and bad news.

For example, gross revenue (net of fuel expenses) increased by $137 million and $34 million of that increase found its way to the bottom line, for a $436 million profit.

Generation from 2015 increased slightly from 78 terawatt hours (TWh) to 78.2 TWh, with nuclear generation increasing by 1.1 TWh and hydro decreasing by .9 TWh, which was further exacerbated (see next paragraph) by spillage due to surplus base-load conditions.

The bad news was that 4.7 TWh of hydro was “spilled” or wasted in 2016, up from 3.7 TWh in 2015. Those wasted 4.7 TWh of power could have supplied more than 500,000 (approximately 11% of all residential ratepayers) average Ontario homes with electricity for the full year.

The spillage by OPG didn’t affect their revenue, however, as they are paid for spillage at an average of about $44/MWh or $44 million/TWh. That means they received $207 million for wasted power and paid the Ontario Ministry of Finance the “water rental” fee for the spillage (although the latter wasn’t disclosed in the report).

Other “good/bad” news indicates OPG sold their Head Office on University Avenue in Toronto with closing scheduled for the second quarter of 2017. They expect the sale will generate an after-tax profit of $200 million.  The bad news is, OPG is obligated to turn over the profit to the Consolidated Revenue Fund. The land, building and maintenance costs fell to the ratepayers of Ontario to pay for via the electricity rates, yet the profit generated on its sale will be tossed into the bottomless pit of the Finance Ministry, instead of going towards reducing OPG’s costs of generation which could have benefited ratepayers.  That $200 million won’t even pay the interest on Ontario’s debt for a week!

SOLD! But the money won’t help you ..

The previous Energy Minister Bob Chiarelli on June 9, 2016 (four days before he was replaced by Glenn Thibeault) also issued a “declaration” to OPG instructing them: “to transfer, sell, dispose of or divest all of the Corporation’s interest in the Lakeview Site, comprised of the Municipal Park Lands and the Uplands”.  The Lakeview site is 67 acres running along the Lake Ontario shoreline and the Municipal Park Lands are the remaining 110 acres of the Lakeview Site.  Any excess revenues associated with the sale is to be transferred to the Government (Consolidated Revenue Fund), again rather than going to reduce electricity rates.

Ontario’s ratepayers absorbed the impairment costs of closing the coal plants in 2003, absorbing a “loss of $576 million as a result of the termination of cash flows from these stations after 2007.” The ratepayers of the province deserve to benefit from any recovery resulting from the write-off of the plant closings!

All this is more evidence of the “shell game” being perpetrated on Ontario ratepayers and taxpayers and the continuing legacy of the McGuinty/Wynne-led governments.

More to come …

Outrageous: Ontario’s electricity CO 2 reductions cost

January 16, 2017

Ontario Premier Wynne: not to be outdone  (Lucas Oleniuk/Toronto Star via Getty Images)
Ontario Premier Wynne: not to be outdone

Prime Minister Justin Trudeau announced on October 3, 2016 he would put a price on carbon starting in 2018, if the provinces have not put one in place. He also announced the price would start at $10 a ton and rise to $50 per ton by 2022.  As Ontario residents may already know, as of January 1, 2017 the Premier Wynne-led government already moved in that direction imposing a “cap and trade” tax they claim will burden us with a cost of $13 per month via a tax on gasoline and one on our home heating source of natural gas.

This new tax comes on top of one ratepayers in this province should already be aware of as we have been paying for carbon reduction for some time via our electricity bills.

A website providing the Ontario Energy Report states at the bottom it “was first produced in Q3 2014” and uses IESO as its data source.  The quarterly reports contain lots of information; however, they are generally not available until the end of the quarter following the one being reported on.  The reports provide: generation achieved from the TX (transmission connected) market and details on the capacity of both TX and DX (local distributor connected) sectors.  The report is also specific in terms of both exports of surplus electricity and imports and their respective destinations (exports) or sources (imports).  Contained in the 16 pages are many charts and graphs providing information on other facts such as the average hourly electricity price (HOEP), the Global Adjustment (GA) by ratepayer class (A and B), conservation initiatives, etc.

The report also has a graph specific to CO2 emissions from Ontario’s electricity sector starting in 2007 and identifies, by year, the Megatonne (MT) emissions.   If one looks at 2009, which is the year the Green Energy and Green Economy Act (GEA) was passed, total emissions were 16 MT. In 2015 emissions had dropped to 7 MT.  The 7 MT in 2015 were flat measured against 2014’s emissions and, based on results available for the first three quarters of 2016, it appears set to a level that will be around 5.5 MT!  The drop of 10.5 MT since 2009 suggests the Ontario electricity sector reduced CO2 emissions by 10,5 million tons.

How much have Ontario electricity customers paid?

Ontario ratepayers should suspect the foregoing results have been achieved via our electricity bills as they have climbed at multiples of inflation to accommodate renewable energy in the form of wind, solar, biomass, etc.   So, how much have we have paid, and continue to pay, for that achievement, and what does that translate to on a cost per ton basis?

That question can be answered in part by the Ontario Auditor General (Bonnie Lysyk) report of late 2015. That report noted ratepayers paid $37 billion more than necessary from 2006 to 2014 for contracts negotiated by the Ontario Power Authority, and they will pay another $137 billion more by 2032 to satisfy those and other contract obligations through to their expiries.

That brings the cost to $170 billion.

The AG’s report noted wind and solar contracts were estimated to have been paid $9.2 billion over the actual market value, due to prices that failed to reflect the drop in a competitive environment.

So, using the $170 billion to calculate the cost per ton to reduce the 10.5 million tons of CO2 emissions, it appears ratepayers are paying about $16,000 per ton.   Using only the $9.2 billion (wind and solar) the cost per ton of reducing CO2 emissions comes in at over $835 per ton.  The latter cost does not account for the intermittent and unreliable nature of wind and solar which requires back-up from gas plants and easily doubles the costs, raising the emission reduction cost to over $1,600 per ton.

What the ratepayers of Ontario have been paying to reduce emissions in the electricity sector makes the Prime Minister’s upcoming carbon tax of $10 a ton in 2018 and $50 per ton by 2022 look like chump change!

If he really is intent on driving the Canadian economy into the ground, he needs to take a lesson from Ontario’s Premier Wynne and her predecessor, Premier McGuinty.

Energy ministry dodges questions on hydro bill relief

The government has promised to get the electricity bills down…but at what cost? Where is the money coming from? The answer is simple: taxpayers and ratepayers are picking up the costs.

Ontario Energy Minister Thibeault: not forthcoming with the facts on electricity bill "relief"
Ontario Energy Minister Thibeault: not forthcoming with the facts on electricity bill “relief”

Last fall, Energy Minister Glenn Thibeault announced that the 8% provincial portion of the HST would be rebated to “residential, small business and farms as of January 1, 2017”.

The Energy Minister’s press release went further stating the government would be “Providing eligible rural ratepayers with additional relief, decreasing total electricity bills by an average of $540 a year or $45 each month”.

That was somewhat ambiguous in several areas so I looked for clarification from the Ministry.

After several phone calls and e-mails with messages left for the Ministry’s media spokespeople, and even a phone call to the Minister’s office, I received no response other than to confirm (via e-mail): I had “reached out to us [the ministry media contact] in regard to one of our September press releases”.

So, with no actual clarification, here’s what I get from the press releases, a mail insert from Hydro One, and a search on the Ontario Energy Board’s “bill calculator”.*

What is the real hydro bill relief? 

Energy Minister Thibeault’s September 13th press release suggested an average savings of $130 per year for the rebate, and also announced “eligible” rural ratepayers would see “additional relief” amounting to $540 a year.  My query to the Ministry asked, what were the requirements for “eligible” rural ratepayers, and how many were there?  I also asked what the estimated overall cost of the 8% rebate would be for the province, and where the money was coming from to cover the lost revenue.   Those questions remain unanswered by the government, so here are my estimates in respect to the anticipated costs of the 8% relief.

►Out of one pocket into the other

The Ontario Energy Board’s 2015 Yearbook of Electricity Distributors indicates Ontario had 4,564,835 Residential Customers and 434,999 General Service (50kW) Customers, 54,295 General Service (50-4999kW) Customer and 124 Large User (5000kW+).   The “General Service” customers consist of farms and the small and medium sized businesses.

Gross revenue for the year including delivery costs was reported as $17,526 million, so rebating 8% would represent approximately $1.4 billion.

About $600 million would be earmarked for “Residential” Customers. Based on the specific information received from Hydro One, whose media team were responsive to my questions, the only group listed but not on the “rebate” list is the 124 Large Users who would consume (estimated) 5.2 terawatts (TWh) of the 124.6 TWh reported as “supplied” in the OEB report. Again, based on an estimate, the value of that 5.2 TWh would be approximately $735 million of gross revenues (including delivery) and reduce the rebate of the provincial portion of the HST by only $60 million to $1.340 billion.  It is assumed the difference of $740 million would represent the rebate to the small businesses and farms.

The full $1.340 billion cost will be picked up by the Ontario taxpayers!

►Out of ratepayer’s pockets into ratepayer’s pockets

That same press release also said, “Providing eligible rural ratepayers with additional relief … by an average of $540 a year”.  The Hydro One application filed with the OEB notes the total additional amount required under the RRRP (Rural or Remote Electricity Rate Protection Program) is $116.4 million (rounded) for 334,500 (rounded) Hydro One “low-density” customers. That works out to $29.19 per customer each month and annually to $350.28, not the additional $540.00 Minister Thibeault claimed in the press release.  Even if you add the 8% PST rebate to the rural ratepayer relief it comes to $500.40  in total so is below the $540 claimed by Minister Thibeault.

The $116.4 million cost of the “additional relief” via the RRRP will be a part of the “regulatory” line on all ratepayers’ bills, increasing that cost.  All ratepayers share in the payment of the RRRP which with this increase now totals approximately $280 million.

►Northern spin

Thibeault’s quote at the end of the press release said “Many rural and northern customers would receive significant rate relief”.  Yet there is nothing additional proposed in this press release for “northern customers.”  The rate relief for them appears to be the same as the rest of the province, except for those who are “low-density” Hydro One customers.

►Total spin

The spin of the press release is captured in the first sentence: “Ontario is taking action to reduce electricity costs and intends to introduce legislation that, if passed, would rebate the provincial portion of the HST from the electricity bills”.

Very nice sentiment, except we know that funding to “reduce electricity costs” is from taxpayers who will pick up the costs of the 8% rebate and ratepayers who will pick up the costs of the “eligible rural ratepayers” reduction.

Almost $1.5 billion shifted to make government look good

The almost $1.5 billion was not obtained from a reduction in spending or by instructing the OEB to reduce the return on capital of the power generators or the local distribution companies—it’s coming from the pockets of taxpayers and ratepayers. The “action” being taken does nothing to defer future rate increases by canceling wind and solar contracts or by taxing them — it simply passes the costs to those who have been affected by the steady and unrelenting rise in the cost of electricity.  To claim, as the press release does, that “consumers will be positively impacted” is pure spin!

Had the Wynne government been brave they would have reduced the TOU rates on the first 750 kWh of consumption by a significant amount. As it is those residential ratepayers who have been most impacted by the price climbs will not reap the monetary benefits of residential ratepayers who use more energy — 8% of a $150 monthly bill is $11 versus $24 for a $300 monthly bill.

This cost shift of almost $1.5 billion looks amazingly like another “mistake” by Premier Wynne.

 ————————

* The OEB “Bill calculator” fails to note any reduction in the “delivery” line for Hydro One’s “low-density” ratepayers but does highlight the 8% reduction in the HST.

 

Solar power: how much does it cost Ontario?

Solar: it costs plenty, too and has environmental "downsides" [Photo: IESO]
Solar: it costs plenty, too and has environmental “downsides” [Photo: IESO]
December 12, 2016

Earlier I deal with the question: “How much is wind power really costing Ontario?” Since then many have asked the same question about solar.

The actual generation of solar power is much harder to pin down on an hourly, daily, weekly or monthly basis as most of it is LDC (local distribution company) connected (DX), and the IESO (Independent Electricity System Operator) doesn’t report it.

There appears to be only a single report, “Ontario’s System-Wide Electricity Supply Mix: 2015 Datawhere one can find solar information. That report is from the Ontario Energy Board and only produced annually. The OEB report for 2015 (dated July 21, 2016) doesn’t provide actual generation; instead it gives a percentage of its contribution (grid-connected and LDC-embedded) to total generation which then can be utilized to determine solar contribution to the supply mix. First, one must determine, via IESO, what actual generation was from all sources in Ontario.

The OEB report for 2015 indicates solar (grid-connected plus embedded) contributed 1.9% to Ontario’s total generation of 153.7 terrawatts (TWh). The 1.9% noted by the OEB would suggest combined generation for grid and LDC connected solar was 2.92 TWh for 2015.

The average price paid for solar (roof-top and ground mounted) is approximately $448.00/MWh or $448 million per TWh — that means the 2.92 TWh generated in 2015 cost ratepayers about $1.3 billion.

Not environmentally perfect

Unlike wind power projects, solar installations don’t appear to suffer a requirement to ensure either their decommissioning or recycling; the cost of either (or both) will presumably be a burden that eventually falls to taxpayers. A National Geographic article from November 2014, “How green are those solar panels, really?” had this to say: “As the world seeks cleaner power, solar energy capacity has increased sixfold in the past five years. Yet manufacturing all those solar panels, a Tuesday report shows, can have environmental downsides.”

When Energy Minister Glenn Thibeault recently suspended LRP II (the second phase of Large Renewable Procurement), trade association CanSIA (Canadian Solar Industries Association) expressed their disappointment: “…it represents a significant back-step from previously committed renewables procurement in the Province that we believe will be required to deal with supply and GHG emission risks, such as delayed nuclear refurbishment schedules, un-met conservation targets, or increased demand as a result of electrification to meet the province’s climate change targets.”

Needless to say, Ontario’s ratepayers were not disappointed. We would like to see Minister Thibeault fully “cancel” both LRP II and contracts awarded under LRP I, and any other contracts that have missed their agreed start dates.

13% of the costs for 1.9% of the power

The $1.3 billion for 1.9% of solar generation represents approximately 13% of the 2015 total Global Adjustment pot of $9,962.6 million and drives electricity costs up by almost $1 billion annually.

Further installations of solar generation in the latter part of 2015 and throughout 2016 such as the 100-MW Kingston Solar on 1,000 acres of land will add to the generation costs, increase our surplus generation, and further drive up the cost of electricity for ratepayers.

Parker Gallant

Premier Wynne’s mistake: no real fixes ahead

November 25, 2016

A recent press release from Environmental Defence announced the launch of yet another effort to “green” Ontario via an organization formed by the usual cadre of environmental non-government organizations (ENGO).

This one, the 100% RE or Renewable Energy, pushes the insanity of suggesting Ontario’s “next energy plan should empower citizens and communities to join the global movement toward 100 per cent renewable energy.” It suggests Ontario “should follow the lead of communities, such as Oxford County, that are transitioning to clean and healthy 100 per cent renewable energy”.

It is apparent that the people at Environmental Defence — the same ENGO that was a participant in the creation of the Green Energy Act — somehow believe they are superior energy planners than those with qualifications. Beyond Environmental Defence, the 100%RE group includes the usual suspects such as the David Suzuki Foundation, Pembina, Greenpeace, the Ontario Clean Air Alliance, Physicians for the Environment, the Registered Nurses Association of Ontario and several lesser known names, including the Toronto Environmental Alliance and TREC. The latter were responsible for the Toronto Exhibition Place wind turbine used by countless Ontario Liberals as a photo-op but which generates almost no usable power and whose control now rests in the hands of Toronto Hydro. TREC have placed a plaque at the base of the turbine with the names of the people who invested in the turbine and have no hope of ever seeing a return on their money.  One of the names on the plaque is Dianne Saxe, the current Environmental Commissioner.  (It appears supporting industrial-scale wind turbines that kill birds and bats did not deter the Ontario Liberal government from appointing Ms. Saxe as commissioner of the environment.)

Now, with Premier Wynne’s recent mea culpa at the Ontario Liberal Party convention when she referred to Ontario citizens having to choose between heating their house or buying food, one has to wonder:  exactly why did it take her so long to admit to her mistake?  Maybe it’s because the Ontario media has recently noted rising electricity bills are causing energy poverty; the hard-luck stories in print and on TV are often heart-wrenching.  Those stories, and the relentless arrival of the monthly hydro bill, has had a lot to do with recent polling results showing that 67% disapprove of the job Premier Wynne is doing.

One of the obvious “mistakes” Premier Wynne made was not paying attention. When she was confronted by communities back in August 2013 declaring themselves “unwilling hosts” to industrial wind turbine developments, her response, as reported in the Ottawa Citizen, was to shrug it off: “Wynne has asked the Ontario Sustainable Energy Association to raise awareness in communities slated for the turbine projects about the benefits of hosting, including the financial gains that can come from being power generators in a cash-strapped economy.”

Was she so naive that she didn’t realize those “financial gains” would come from the pockets of average households, and that OSEA claimed responsibility for developing the Green Energy Act that had a role in rising electricity bills?

Her announcement on the repeal of the 8% provincial portion of the HST is at best comparable to sticking her finger in a dike to stop the flood.  It has apparently slipped her mind she was part of the team that placed the tax on our energy bills, while simultaneously blessing a 10% rebate known as the Ontario Clean Energy Benefit.

The net gain to households from those actions was a 2% reduction, at the same time as the Ontario Energy Board was approving rate increases for both the electricity and distribution lines on our bills that were multiples of the 2% net gain from the Liberal government actions.

The upcoming plan to add a “cap and trade” tax to households will quickly negate the latest 8% reduction.  On top of the new tax, Ontario Power Generation, which generates about 60% of the power we consume in the province, has submitted a rate application to the OEB that could add $63 to the average bill.

Premier Wynne’s “mistake” will continue to drive up our bills for some time. If she pays any attention to the dreamy musings of Environmental Defence and their ilk in the drive for 100% renewables, those heart-wrenching stories will become a daily occurrence.

Creating the Green Energy Act based on faulty ideology, and with no comprehensive cost-benefit analysis in place was a big mistake — one that remains fundamentally not corrected.

Look out Ontario: Premier Wynne is “helping” you again

Queen’s Park Hallowe’en announcement: trick or treat?

The morning after Wynne's Hallowe'en message: promises don't look so good
The morning after Wynne’s Hallowe’en message: promises don’t look so good

The press release issued by the Ontario government on October 31st (Hallowe’en Night) carried this headline:   “Helping Homeowners Cut Energy Bills.” As soon as I read it I thought, haven’t we heard this before?

The release inferred the government was going to help around 37,000 homeowners obtain “home energy audits and retrofits”.  The committed dollar amount was $100 million over three years from the “Green Investment Fund” (GIF).  The $325 million GIF was announced in the “2015 Fall Economic Statement” and again in the 2016 Budget and will come from the “cap and trade” tax we will shortly experience.  The GIF is already committed to spend almost $300 million of the total fund.  The upcoming tax is forecast to generate $1.9 billion annually; the bulk of the tax will come from the 4.5 million households in the province who were told the cost will be $5.00 monthly per household if you heat by natural gas, and an additional monthly cost of $8.00 for transport included in the fuel price.  The $13.00 per month per household should generate annual revenue around $700 million (4.5 million [households] X $13.00 X 12 [months] = $702 million).

The promise made in the press release is: “Thanks to this investment, Ontario homeowners can upgrade their homes, improve their energy efficiency, reduce their carbon footprint and, importantly, save money.”  Really.

Let’s recall former Minister of Energy Bob Chiarelli’s and his July 2013 message in which he told us we would save money by conserving electricity use: “Ontario has saved billions of dollars through conservation, and we have a clear opportunity to do more. By investing in conservation before new generation, where cost-effective, we can save ratepayers money and give consumers new technology to track and control energy use.”

Chiarelli’s July 2013 forecast, when the average cost of a kilowatt hour (kWh) of electricity was 8.4 cents, was wrong. Very wrong.

Three years later, the average cost is 11.1 cents/kWh, up 38%, costing the average ratepayer $250 more a year, and yet we did conserve!   With that in mind, we should expect the same thing to happen in respect to the natural gas file. Energy ministers have consistently failed to complete a cost/benefit study and have actually lied to Ontarians about savings.

Current plans offering financing for natural gas expansion of $230 million to extend gas pipelines to rural areas will surely raise the distribution costs for existing and future homeowners heating with natural gas. Building transmission lines to carry intermittent unreliable wind and solar electricity generation to the grid did, so we should expect the same!  Coupled with the “cap and trade” tax to be levied on natural gas distributors, the expansion will push the cost of heating with gas higher.

In the meantime, the MOECC (Ministry of the Environment and Climate Change) also announced their plans to hand out the new “cap and trade” tax to individuals who purchase an electric vehicle as per a June press release: “Cash back: When you buy or lease a green plate eligible electric vehicle, you can receive an incentive of up to $14,000. You may also receive an incentive of up to $1,000 for the purchase and installation of a Level 2 home charging station. Ontario will also work with the federal government to explore ways to eliminate the HST from new and used EVs by 2018.”

And, “Great perks: You get a green licence plate that identifies you as an EV owner and allows you to drive in all provincial high occupancy vehicle (HOV) lanes, even with only one person in the vehicle, and will provide free access to high occupancy toll (HOT) toll lanes in the future. You’ll also get free fuel under Ontario’s overnight charging program between 2017 and 2020.”

The Ontario citizens who heat their homes with natural gas or electricity, but can’t afford to purchase an EV should bask in the warmth of knowing by paying the “cap and trade” tax (hidden in your natural gas heating bill and via gasoline purchases) you are helping the rich people purchase an EV and also making sure they don’t have to pay for their fuel, or even the upkeep of the roads they travel on.

Now, doesn’t that make you feel better, knowing that the next time you see a Tesla automobile you’re seeing your tax dollars are hard at work?

In the meantime sit back and enjoy all the money the Premier Wynne-led government has saved you —just like she did on your electricity bill.

The Premier’s mandate letters: no sign of plans to resolve a crisis

Premier Wynne: just do what I tell you. Not sure it will work, but do it. (Lucas Oleniuk/Toronto Star via Getty Images)
Premier Wynne: just do what I tell you. Not sure it will work, but do it. (Lucas Oleniuk/Toronto Star via Getty Images)

Part I

September 26, 2016

Ontario’s Premier Kathleen Wynne just issued 35 “mandate letters” to each Cabinet Minister in the government on September 23, 2016. The letters range from three to six pages, and carry platitudes about ministerial accomplishments and directions as to what she expects them to accomplish in the next two years under her premiership. (“Mandate” is defined as an authoritative command.)

One such platitude can be found in her six-page mandate letter to Finance Minister Sousa wherein she notes we (the collective we):  “Worked with the federal government to ensure the Ontario Electricity Support Program (OESP) would not be a taxable benefit.”

Any sensible person would say that money given to support low-income households in the payment of their electricity or other bills should not be a “taxable benefit.”   The OESP is levied as a charge to all of the non-qualifying ratepayers of the province via the Global Adjustment (GA) and becomes a cost of the basic commodity–electricity! So in effect, it is a charitable gift from other ratepayers who pay their escalating electricity bills every month.

Perhaps this “charitable donation” should be recognized by your local distribution company (LDC) who should be required to issue a charitable receipt that you can use when filing your tax return. The government should instruct the LDC to identify that on our monthly bills just as they tell us how much we have saved by not paying the debt retirement charge (DRC).

Interestingly, the same mandate letter to Minister Sousa notes another accomplishment: “Ontario will continue to fulfill its commitment to upload social assistance benefit programs, as well as court security and prisoner transportation costs, off the property tax base. This will ensure that municipalities have more property tax dollars to invest in local priorities.”

Electricity customers carrying the load?

That pronouncement should leave you shaking your head. In one paragraph Premier Wynne suggests the OESP isn’t a “social assistance benefit” but did require federal government approval to ensure it would not be a “taxable benefit,” and later the Premier brags about the wonderfulness of uploading social assistance benefit programs like court security and prisoner transportation costs from municipalities.  Is the reason the province could afford to “upload” those social assistance benefits  because the OESP is being paid by Ontario’s ratepayers without notice or consultation?

If the Wynne government is really looking for more money for municipalities, why didn’t the Premier instruct Sousa to tell MPAC to assess industrial wind turbines (IWT) at their real value rather than the $40,000/MW they are capped at now? Now, that would have increased property tax dollars for municipalities.

The fact is, if the costs of the OESP were properly allocated, they would be under the Community and Social Services Ministry, not the Energy Ministry.   As the ongoing news series from Global TV has noted, the number of people living in energy poverty in Ontario is growing at an alarming rate.

Premier Wynne has publicly noted the “crisis” in respect to the rising cost of electricity and the rise of energy poverty households, yet instructions to the Minister of Community & Social Services fail to respond to the crisis. Her mandate directs the Minister to: “Support the transformation of income-based and other benefit programs, with the Minister of Finance, Minister of Government and Consumer Services and human services system partners, focusing on client-focused delivery and information sharing.”

And in the Premier’s mandate letter to the Minister Responsible for the Poverty Reduction Strategy the instructions are:  “Support the transformation of income-based and other benefit programs, with the Minister of Finance, Minister of Government and Consumer Services and human services system partners, focusing on client-focused delivery and information sharing.”

It is very unclear how her mandated transformation designed to focus on “delivery and information sharing” will resolve poverty.

It is clear she depends on Ontario’s electricity ratepayers as the new charitable organization!

Parker Gallant

 

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