Hard to see through the fog of Wynne government energy promises

On October 21, 2013 Premier Wynne wrote a letter “To the people of Ontario” with a few promises.

“We must also unlock public data so that you can help us solve problems and find new ways of doing things. I believe that government data belongs to the people of Ontario and so we will make government data open by default.”

and

“Our Open Government initiative will help create the transparent, accessible government that the people of Ontario deserve. Over the months and years to come, we’ll be bringing forward additional initiatives that will improve transparency, accountability, and connectivity.”

Almost a year later, possibly in an effort to augment her promise of “transparency” she wrote “mandate letters” to her Ministers. To her Minister of Energy, Bob Chiarelli she said, “We want to be the most open and transparent government in the country. We want to be a government that works for the people of this province — and with them. It is of the utmost importance that we lead responsibly, act with integrity, manage spending wisely and are accountable for every action we take.” [Italics mine]

Premier Wynne’s “mandate letter” to the current energy Minister, Glenn Thibeault, September 23, 2016 said nothing about transparency but does say:  “At this halfway mark of this government’s mandate, I encourage you to build on the momentum that we have successfully achieved over the past two years, to work in tandem with your fellow ministers to advance our economic plan”.

After almost three and a half years since Wynne’s letter to the people, perhaps it’s time to look at the promise to “unlock public data” and how the “Open Government” promise has delivered on  “transparency”!

  • Two months after Wynne’s letter to her Energy Minister Bob Chiarelli, in an appearance on TVO he claimed, “since 2008, the province of Ontario – and you can verify it with the IESO — has made a $6 billion profit on the trading of electricity.”
  • Current Energy Minister, Glenn Thibeault when asked in an interview with Global TV for information on how many ratepayers were behind in their hydro bills and how many had been disconnected, he had no idea! Neither did the OEB, or Ministry of Energy staff. Thibeault wouldn’t admit there was a crisis.
  • Less than two months after Thibeault refused to agree there was a crisis, Premier Wynne admitted rising hydro bills were “an urgent issue”. Loss of a critical byelection finally opened her eyes.

The IESO (Independent Electricity System Operators) website dazzles with the amount of data available. Search using the terms “transparency” or “transparent” you get 2,800 hits. Impressive, but as the saying goes, actions speak louder than words!

IESO fail to provide data on:

  • How much wind is curtailed or
  • How much water is spilled by hydro electric generators or
  • How much nuclear is “steamed off” by Bruce Nuclear or
  • How much wind or solar distributor connection energy was produced or
  • How much money was generated from sales of surplus exported power to our neighbours and
  • How much that exported power cost Ontario’s ratepayers

IESO is responsible for the financial aspects of settling (contracted and/or regulated) with each and every generator in the province either directly or via local distribution companies, and also must settle with the buyers and sellers of both our exported and imported energy. In effect they play a major role in determining the final cost of what each and every ratepayer are charged for the line on their bills reading either “electricity” and “GA” or Global Adjustment.

They should be the purveyors of all the “public data” from the energy sector Premier Wynne referenced in her letter to us in September 2013 but as noted, they are falling short.

A recent event made that obvious.

On January 18, 2017, IESO issued a News Release, “ Ontario’s Independent Electricity System Operator Releases 2016 Electricity Data”. The release had a table summarizing Ontario’s transmission connected generator output by fuel type, listing the outputs as: Nuclear 91.4 TWh (terawatt hours), Hydro 35.6 TWh, and Wind 9.0 TWh respectively.   Two days later, those three “outputs” were suddenly different with Nuclear at 91.7 TWh, Hydro at 35.7 and Wind at 9.3 TWh.

No apologies, no explanations or even a mention they altered the original News Release. The .7 TWh added to the output represents a cost of about $70 million ratepayers will pay, yet no explanation was posted about the change.

In Ontario today, transparency is shrouded in fog, and “spending wisely” has been forsaken by this government, in the badly managed electricity sector.

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

Wynne government in panic mode

First in a series of three

In July, Energy Minister Glenn Thibeault was pressed by Shirlee Engel of Global TV on the rising cost of electricity bills. He said, “While I’m still not using the word crisis,” said Thibeault. “I know it’s important. For one family if it’s a hundred bucks out of their own pocket that’s a crisis for them and I get that.”

In September Premier Wynne mentioned the word “hydro” at an international plowing match, and was instantly booed.

Now it appears we have a government in a panic mode trying to deal with a crisis of their own making.

The Throne Speech held promises about getting rid of the provincial portion of the HST on electricity bills. Then on September 13, 2016 a press release from Minister Thibeault confirmed the 8% reduction reducing bills $130 annually, and announced other actions such as, “Providing eligible rural ratepayers with additional relief, decreasing total electricity bills by an average of $540 a year or $45 each month”.

The press release did not detail what constitutes an “eligible” rural ratepayer; however, if it is just the 329,000 or so who are Hydro One’s “low-density” ratepayers the annual cost will be approximately $150 million. The press release went on to say: “Empowering businesses to reduce their bill by up to 34 per cent through the expansion of the Industrial Conservation Initiative” (ICI). 

Neither the Throne Speech nor the press releases say where the government is getting the money to pay for those initiatives, but removal of the 8% provincial portion of the HST will be on the backs of the taxpayers.

The electricity sector in the province is a $20-billion (before HST) business. That means $1.6 billion previously allocated to other ministries will now be unavailable, or the government will need to forgo balancing the budget or raise taxes/fees, etc. to cover off the lost tax revenue.

Minister Thibeault issued another press release in September related to “Empowering businesses to reduce their bill”.  This one had a “Customer Impact Example”:

“With more than a thousand new businesses soon eligible for ICI, cost impact across sectors and industries will vary. As an illustrative example of the impact, a plastics manufacturer with an average peak demand of 2 MW that participates in the ICI program could see its electricity price reduced from $154 per MWh to as low as $102 per MWh. This would result in energy cost savings of up to $42,000 per month.”

If you do the quick math on the above and assume each of those 1,000 plus businesses save $42,000 a month the reduction may be $500 million but once again, there is no indication where the funds will come from to cover those costs.

The above electricity bill reductions promised by the government total almost $2.2 billion and considerably more than the $1.5 billion in funds allocated to balancing the budget currently in dispute between the Ontario Auditor General and Liz Sandals, Ontario’s Treasury Board President.

So exactly how the governing party plans to pull off these bill reductions is not known.

Perhaps to create confusion amongst voters/taxpayers and inattentive media, Minister Thibeault issued another press release  September 27th announcing the “suspension” of LRP II to acquire 1,000 MW of renewable energy, principally in the form of wind, solar and biomass.  The press release declared  “This decision is expected to save up to $3.8 billion in electricity system costs relative to Ontario’s 2013 Long-Term Energy Plan (LTEP) forecast. This would save the typical residential electricity consumer an average of approximately $2.45 per month on their electricity bill, relative to previous forecasts.

It is unclear if Minister Thibeault is suggesting suspending future rate increases will somehow cover off the costs of his promises to reduce our electricity bills by $2.3 billion.

Or is it somehow related to the accounting dispute the government is engaged in with the Auditor General?

Parker Gallant