Ontario’s electricity export tariff

Special to The PostMedia Network, June 14, 2018

BY PARKER GALLANT, GUEST COLUMNIST

Former Energy Minister Chiarelli and his claim of a $6B profit on surplus electricity exports. “You can verify it.” No, you can’t.

Many will recall Bob Chiarelli, when in the position as Ontario’s Minister of Energy, was questioned on the costs of exporting our surplus electricity on TVO and stated: “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.”

Needless to say Minister Chiarelli was called out by the media and opposition parties for making such a spurious claim.

Let’s look at Ontario’s 2017 electricity exports and see what he would claim about them. The U.S. Energy Administration Information (EIA) in a recent release, had the following information posted from data supplied by Canada’s National Energy Board (NEB):

“Electricity accounts for a small, but locally important, share of bilateral trade. In 2017, the value of U.S. imports of electricity from Canada increased for the second straight year, reaching $2.3 billion*. The United States imported 72 million megawatt hours of electricity from Canada in 2017 and exported 9.9 million megawatt hours, based on data from Canada’s National Energy Board.”

As it turns out, Ontario’s exports of 19.1 million megawatt hours (MWh) in 2017 represents 26.5% of the 72 million MWh reported as exported by the NEB and those 19.1 million MWh generated “revenue” of $496.6 million (approximately) made up of the $15.80/MWh of the yearly average HOEP (hourly Ontario energy price) as reported by IESO and another $10.20/MWh for transmission** costs.

The implied revenue generated represented 16.6%* of total Canadian electricity revenue versus 26.5% of total Canadian electricity exports. The Ontario based generators of that 19.1 TWh of power were paid a yearly average of $115.5 million/TWh (yearly average includes HOEP plus global adjustment based on the IESO’s December 2017 monthly summary.

That means the cost to Ontario ratepayers for exported power was $1,709.5 billion and the credit (net of the monies to Hydro One of $194.8 million for transmission) resulted in Ontario’s ratepayers picking up the missing revenue of $1,507.7. Anyone with a small math knowledge would not refer to that as a profit as it would represent a cost of about $300 per Ontario household.

Export tariff?

The cost to ratepayers of electricity exports in 2017 at over $1.5 billion and prior years played a significant role in driving up electricity rates and represented almost 10% of total generation costs. To put that in current context, Ontario’s ratepayers were slapped with an “export tariff” by our Ontario government of 88% which greatly exceeds the US tariffs recently announced by the US government on Canadian manufactured steel and aluminum.

Getting slapped with only a 10% or 25% tariff would be a net benefit to Ontario’s ratepayers.

*Presumably US dollars so would represent approximately $3 billion CDN dollars at a $1.30/$1.00 exchange rate.

**A large part of these revenues ($194.8 million estimated) went to Hydro One who control about 99% of all transmission in the province.

Energy Minister doles out lumps of coal to Ontario power customers Christmas Day

Ontario ratepayers, good and bad, had a disappointing Christmas Day

A quick review of IESO data for Christmas Day 2017 shows our Energy Ministry delivered lumps of coal to all Ontario’s electricity ratepayers, whether they were good or bad.  Those lumps of coal can be seen as a gift from all past and present Energy ministers who signed contracts for the industrial wind turbines liberally sprinkled throughout the province.

This year, the IESO data shows about 54,327 MWh^* was curtailed (paid for but not delivered to the grid) and paid $120/MWH. That means wind power corporations were paid over $6.5 million  ($6,519,240 to be more precise) for NOT delivering that power.

The curtailed or wasted power was enough to supply almost 2.2 million average homes with power for the day, free.

Meanwhile, the IESO accepted about 25,680 MWh, so the curtailed/suspended generation was actually 2.1 times as much as grid-accepted wind power. Wind power corporations were paid $135 per MWh — that’s another $3,467,800 so the total bill for wind power for the day was $9,987,040.

What you paid them: 39 cents a kWh

Here’s what else it means: the 25,680 MWh of power actually accepted by IESO into the grid cost $388.77/MWh* or 39 cents a kWh!  And, that 39 cents a kWh doesn’t include the costs of gas plant backup, spilled hydro or steamed-off nuclear, all of which applied on Christmas Day.

What you got paid: 1.9 cents

That’s not all: at the same time, the IESO was busy exporting surplus power to our neighbours in New York and Michigan at an average of 1,993MW (net-total exports less imports) per hour. We practically gave away 48,000MWh (rounded) at a cost to Ontario ratepayers of over $4 million.  So, Christmas Day, the day of giving, ratepayers coughed up $14 million for unneeded power whether they could afford it or not! That $14 million raised the cost to electricity customers by about $40/MWh or 4 cents/kWh.

Christmas Day is supposed to be a day of joy and giving. In Ontario though, it was a day when the result of government energy policies and mismanagement furthered hardship for many.

(C) Parker Gallant,

December 27, 2017

 

* Calculation is simply $8,083,200 + $3,467,800 = $11,551,000/25689 MWh = $449.80/MWh

The secret is out: wind power costs plenty

This past weekend’s stats are not kind to the wind power cheerleaders

The wind power trade association, the Canadian Wind Energy Association or CanWEA, uses every opportunity to push for more wind power development, and often uses “selective facts” to promote their claims.   One of the latest relied on investment firm Lazard by stating:  “A December 2016 report from the U.S. investment firm Lazard found that wind energy is the lowest cost option for new supply in the United States without any subsidies. Wind energy costs continue to fall, offering an attractive electricity source to provinces seeking to clean and diversify their electricity systems.”

That statement is included in CanWEA’s recently released brochure “The Secret is Out, Wind is in”.

Had the unknown author(s) at CanWEA simply looked at the Ontario Energy Board’s (OEB) semi-annual Regulated Price Plan they would have noted Table 2 on page 21 of the April 20, 2017 report that the cost of a wind-generated kilowatt hour (kWh) in Ontario is shown as 17.3 cents ($178/MWh), as the cost of “curtailed” (not added to the grid) wind is also included as a cost input.

Had the author(s) also simply looked at IESO data they might also have noticed that maybe wind energy costs are not continuing to fall!   Saturday, November 25^th was an example: it was a very windy day in Ontario with an especially windy night. Unfortunately for the wind power cheerleaders, our demand for power from 12 AM until 7 or 8 AM was relatively low, but the wind was really blowing. That meant the 4,200+ MW of wind capacity were running at 90% (approximately) of their capacity, at the same time as Ontario’s demand for power was hovering mid-way between 11,000 and 12,000 MW. That’s very close to what our nuclear plants can provide on their own without help from other generation sources.

As a result, IESO ordered wind’s curtailment, hydro’s spilling and nuclear steam-off. At the same time, they were exporting whatever the market would take.

So, all together on November 25, the IESO curtailed 35,600 MWh of grid-connected wind and accepted 30,600 MWh into the grid, while scrambling to prevent brownouts or blackouts by exporting about 50,000 MWh over the day.

Industrial-scale wind power developers get paid $120/MWh for curtailed wind and $135 MWh for grid-accepted wind.

Quick math on all that means:

Ontario’s ratepayers picked up the costs of almost $8.6 million for curtailed and grid-accepted wind power produced when it wasn’t needed.

The cost of the grid-accepted wind (30,600 MWh) was therefore just over $280/MWh or 28 cents per kWh or, 10.7 cents more than the OEB reported back in April. On top of that, we ratepayers also ate the costs of spilled hydro, steamed off nuclear and the losses on the 50,000 MWh exported at a price close to zero.

Now if that author or authors who cranked out the latest CanWEA “selective facts” brochure were brutally honest, they would immediately change the title to:

“The Secret is out: wind is horribly expensive, intermittent and unreliable!”

Wind power peaks match power use lows

Once again, the numbers show: wind power shows up when it’s not needed, adding to consumers’ electricity bills

The IESO/Independent Electricity System Operator just released their October 2017 Monthly Market Report.

As usual, it was full of bad news.

Ontario power consumption was down 2.6% from October 2016 and was the third lowest consumption month of the 10 so far in 2017.

October 2017 was also the fourth highest month for curtailed wind* in 2017 with 37.9% (481,243MWh [megawatt hours]) curtailed, compared to May’s record curtailment of 49.3%, April’s of 42.6% and June’s curtailment of 38.1%.  History has shown wind’s generation levels in Ontario tend to always be higher in the Spring and Fall months, so this was no surprise.  What it does underscore, again, is that the months of lowest power consumption line up with wind power’s best days on the job. Power when its not needed!  Curtailment of wind in October cost Ontario ratepayers about $58 million.

On top of the wind power curtailment, Ontario also was busy exporting surplus power to our neighbours in New York, Michigan, etc. providing them with cheap power subsidized by the ratepayers of Ontario.  Net exports (exports minus imports) averaged 1,438 MW per hour so 1,069,872 MWh were delivered elsewhere.  Based on the record Global Adjustment (GA) for the month of $125.63 and the very low HOEP (hourly Ontario electricity price) of $8.75 MWh (0.088 cents.kWh) the cost to Ontario ratepayers; after recovery of the HOEP, transmission and congestion charges was approximately $107 million.

In summary, Ontario ratepayers picked up costs of curtailed wind of $58 million plus lost revenue from exports of $107 million for 1,550,000 MWh (rounded) generation of no value to them.  Those 1,550,000 MWh were enough power to have supplied 172,000 average households with power for a full year or almost 2.1 million average households with power for the full month of October.

No doubt we also spilled cheap clean hydro and steamed off emissions free nuclear while paying for idling gas plants, at the ready; to ensure power when clouds passed over solar panels and the wind refused to blow.

This all adds up to very Un-Fair Hydro Plan!

Parker Gallant

November 23, 2017

Note: “constrained” means the power was not needed so not added to the grid … but paid for anyway.

* Thanks to Scott Luft for his invaluable data!

Wind power myths busted on one fall weekend

Beautiful … but costly. All that “free” wind power. [Photo: The Weather Network}

October 21 and 22 was a beautiful fall weekend in Southern Ontario with lots of sunshine, beautiful colours, mild temperatures and gentle breezes. That combination meant low electricity demand: power demand for the two days was slightly less than 603,000 MWh (megawatt hours) for all types and classes of Ontario ratepayers according to IESO’s (Independent Electricity System Operator) “Daily Summary Reports”.  As a result we exported surplus generation to New York, Michigan, etc. at an average two-day price of $2.65 per MWh, but at the same time, that cost Ontario’s ratepayers about $120/MWh*.

So, the “Net Exports” (exports less imports) of just under 98,000 MWh sold to our neighbours recovered about $260,000, but cost Ontario’s ratepayers almost $11.8 million … even more if we attribute it all to wind generation.

It turns out, the blame can easily be allocated to industrial wind turbines as they could have generated about 107,000 MWh, but were partially curtailed by IESO. As the weekend unfolded, 38,000 MWh were curtailed and 69,000 MWh were delivered to the grid.   Ontario’s ratepayers picked up the tab for the curtailed wind at $120/MWh and $135/MWh for the grid-delivered generation, bringing the weekend wind costs to almost $14 million ($13.875 million).  You should note curtailed and grid-accepted wind generation exceeded our net exports by 9,000 MWh — that’s enough to power 10,000 average households for a full year!

As it turned out, we didn’t need wind generation at all and we normally don’t. A look at our generation capabilities on the weekend via the IESO’s “Generators Output and Capability Reports” also shows IESO were busy controlling the grid to prevent blackouts or brownouts, and frequently did so by getting Bruce Nuclear to “steam off.” It must be assumed that OPG were also required to “spill hydro,” our cheapest form of generation!  Needless to say, we ratepayers were also paying for that!

Once again, the past weekend demonstrates power generation from industrial wind turbines wasn’t needed.

But the way the Ontario Liberal government has negotiated the contracts with wind power developers means Ontario’s ratepayers are required to pick up the bill for the unreliable and intermittent nature of power that often winds up creating a surplus of unneeded power that is exported at a substantial cost.

It is clearly time to end the charade — kill the GEA and cancel any outstanding unbuilt wind contracts.

 

* Due to the nature of grids, it is impossible to determine what source of generation was actually exported so the suggested cost reflects (approximately) the GA (Global Adjustment) plus the HOEP (hourly Ontario electricity price) of all types of generation either contracted or regulated.

Sickening: Wellington Times editorial on Ontario’s wasted power

Rick Conway of the Wellington Times in his editorial of August 16th has done a great job at highlighting the way the current government of the province have messed up the electricity sector and how they are trying to increase the mess.

He points out how we are exporting our surplus power, in part due to the unreliability of wind and solar generation.

He has kindly referenced yours truly in the article and it is much appreciated.

Find the “Dots” article here: http://wellingtontimes.ca/dots/

One (megawatt) is the loneliest number

On one day recently, for one hour, Ontario’s thousands of towering wind turbines delivered just one megawatt of power. And still, Ontario  had a surplus that was sold off cheap.

May 27 was a Saturday which is usually a “low demand” day for electricity in Ontario, compared to weekday power demand and assuming weather patterns are close to average. The temperature on the recent May 27 was slightly below historic averages in Toronto; as people woke up and set about their activities that day, the demand for electricity built slowly.

According to the IESO’s (Independent Electricity System Operator) Daily Market Summary, Ontario demand peaked at 14,069 MW and averaged 12,751 MW (total Ontario demand was 306,024 MWh for the whole day).  If anyone checked IESO’s “Power Data” page at, say, just after 11 AM, they would have noted demand was 13,208 MW at 10 AM and the HOEP (Hourly Ontario Energy Price) was indicating a negative price of -$4.00 /MWh.   If one had also looked at the “Generator Output and Capability” and scrolled down to “Wind Total” they would have seen that under the heading “Output” the number appearing on the screen was “1”!

As in, one single megawatt of power.

About half the capacity of one ordinary wind turbine.

So, at 10 AM on May 27, 2017 the approximately 4,500 MW capacity of the more than 2,000 wind turbines installed throughout the province by the McGuinty/Wynne governments with lucrative, 20-year contracts, were delivering one megawatt of power.

And yet, to the best of my knowledge, Ontario didn’t experience a blackout or brownout because intermittent wind power generation was almost completely absent, nor did our emissions increase, as we got all the power needed from nuclear and hydro resources.   In addition, the almost 9,000 MW of gas generation was idling, operating at an average of about 2% of capacity almost all day.

Despite wind only producing an average hourly output of 75 MW for the day and just the “1” for hour 10, Ontario still exported 43,584 MW of power at a cost to ratepayers of $5.6 million*.

Despite the lackluster performance of industrial wind turbines May 27 and on many other occasions, a visit to the home page of CanWEA still claims:  “Wind is delivering clean, reliable and low-cost electricity”!

Sure!

Perhaps with another 4,500 MW of capacity in Ontario, the industrial wind turbines may have delivered TWO MW of power at 10 AM on May 27?

 

*Cost estimate assumes the second IESO estimate of May’s Global Adjustment of $127.76 holds up.

CanWEA wants to “reap” more “benefits” from wind energy

The wind industry association claims wind power is the “least-cost” option. The numbers tell a different story [Photo: IESO]

The past few days presented a couple of conflicting news events that made you want to scratch your head in wonderment.

First was a CTV news item June 5 headlined “Wasted green power tests China’s energy leadership”. The article stated: “In western China’s Gansu province, 43 per cent of energy from wind went unused in 2016, a phenomenon known in the energy industry as ‘curtailment.’ In the neighbouring Xinjiang region, the curtailment figure was 38 per cent and in northeast China’s Jilin province it was 30 per cent. The nationwide figure, 17 per cent, was described by Qiao’s organization as ‘shockingly high’ after increasing for several years in a row.”  It went on to say: “The problem threatens to slow China’s progress in clearing its air and controlling the greenhouse gas emissions that make it the top contributor to climate change.”

A CanWEA blog (Canadian Wind Energy Association) by Brandy Giannetta, also on June 5,  was headlined:  “Adding more wind to the Ontario grid: no problem!”

Ms. Giannetta made these claims:  

“Ontario could reliably integrate about 16,000 megawatts of wind energy (which would be able to meet more than a third of electricity demand in the scenario studied).

The additional amount of electricity generation reserves required to back up that 16,000 MW of wind (beyond the reserve capacity already in the system) would be as small as 196 megawatts, or 1.2 per cent of the wind energy capacity.

Wind energy, which is now the least-cost option for new electricity generation available in Ontario, would avoid about $49 per megawatt-hour of production costs within the electricity system if it supplied 35 per cent of Ontario’s electricity demand.”

The claims made on the blog supposedly used information from a partially taxpayer-funded, three-year study released in July 2016 co-sponsored by CanWEA and Natural Resources Canada and carried out by GE Energy Consulting, a subsidiary of General Electric. (GE’s website claims  “Our portfolio of turbines feature rated capacities from 1.7 MW to 3.8 MW (Onshore) and 6MW (Offshore), we are uniquely suited to meet the needs of a broad range of wind regimes.”)  As one would expect there is a “legal notice” (disclaimer) at the start of the report which names CanWEA as their client.

Needless to say, the report is extensive but looking at the 62-page Section 1, Summary Report, I noted the following, suggesting CanWEA suggest the small “reserve capacity” of  only 196 MW is required to back up the 11,000 MW of new wind capacity and could be integrated:

“1.11.9 Reduced Reserves from Conventional Generation    — This sensitivity examined the impact of reducing the level of spinning reserves obtained from conventional generation resources (thermal and hydro). Instead the reserves could be obtained from demand response, storage devices, or other nonconventional resources. This approach could reduce curtailment during periods where conventional generation resources are dispatched to their minimum output limits.”

The suggested CanWEA small 196-MW “reserves” being all that would be needed is a huge “stretch goal” (to use a phrase once favoured by the ruling Ontario government) and highly improbable!  It suggests dispatching existing “conventional generation resources” will allow wind to contribute a lot more of its intermittent and unreliable generation.

The same section contained a stumbling block in respect to containing further cost increases as it notes: “Production simulation results show no significant reduction in curtailment. This indicates that the system is not constrained by the commitment of conventional generation units for reserve services.”

What that means is, curtailment will remain as is, as long as ratepayers pick up the costs of constraining conventional generation. It infers industrial wind generation be treated as “base-load” with “first to the grid” rights!   Somehow, CanWEA view the expensive: “demand response, storage devices or other nonconventional resources” along with dispatch of conventional generation as an unrelated cost ratepayers must pay for unreliable and intermittent generation from industrial wind turbines, yet they claim “wind is now the least-cost option”.  This appears to be CanWEA’s contribution to the “Fair Hydro Plan” kicking wind’s integration costs to the ratepayers bills!

Now with two conflicting perspectives about IWT curtailment from China and CanWEA, let’s look at recent Ontario history sourced from IESO and Scott Luft’s Monthly Wind data.

IESO reported in their 2016 Year-End Data they dispatched 2,244,230 MWh  “representing 19 per cent of the total amount of wind energy produced in the province.” So, 2% more than China’s “shockingly high” amount garnered no attention in Ontario!   Dispatched wind in 2016 added approximately $270 million to the GA for undelivered power, and no doubt caused nuclear steam-off and spilled hydro adding additional costs to the GA pot.

Scott’s files contain TX (transmission connected) and DX (distributor connected) wind generation as well as what has proven to be relatively conservative estimates of “curtailed” generation. For the first five months of the current year, curtailed wind was 1,580,629 MWh, which represented 22.3% of grid delivered and curtailed wind. It looks like the current year will easily surpass the record amount dispatched in 2016 in MWh and percentage terms.

Combining the average costs of wind generated MWh along with dispatched MWh suggests an average cost of a kWh from industrial wind turbines for the first five months of 2017 was 17.5 cents /kWh and for May 2017 was 23.4 cents /kWh.

Those costs to Ontario ratepayers makes it relatively easy to understand Ms. Giannetta’s closing paragraph on her blog where the “we” in the following sentence suggests she is clearly speaking for the members of CanWEA!

“It’s increasingly obvious that we are only beginning to reap the benefits of wind energy in Ontario.”

© Parker Gallant

Free power is really expensive!

Stumbling over the IESO weekly summary* for May 24^th to May 30^th came with a shocking discovery that the HOEP (Hourly Ontario Electricity Price) for the week had descended to a low of $1.05 /MWh (megawatt hour) or 0.11 cents /kWh (kilowatt hour).

As it turns out, there is probably nothing you could buy for eleven one hundredths of a cent except for what was surplus to Ontario’s electricity demand for the week.

If you were looking to buy power from Ontario while living elsewhere it was much better than a Boxing Day or Black Friday sale! During that week IESO exported 278,712 MWh to NY, Michigan, Quebec, etc., which could have supplied 1.6 million average Ontario households with their electricity needs for the whole week for 19 cents.   Yes, you read that right!  The 278,812 MWh cost Ontario ratepayers the GA (Global Adjustment) which IESO’s 2^nd estimate for May suggests will be $127.76/MWh (12.8 cents /kWh)!

What that means is, Ontario’s ratepayers will pick up $35.6 million in GA costs reducing electricity rates for our neighbours. Our neighbours can use that cheap power to lure small and medium sized businesses to their state or province. The businesses being lured away provide employment for many Ontarians.

Now, so surprised was I by the foregoing I fired off an e-mail to my friend Scott Luft about the meager amount of the HOEP for that week. Scott quickly responded suggesting a look at the prior week which he said was even more egregious.  So egregious, that the HOEP for the week of May 17^th to May 23^rd was negative at -0.48 /MWh or -0.5 cents /kWh.  He closed with the thought provoking “free power is really expensive” alluding to wind and solar as a fuel having virtually no cost!

It turned out the 308,616 MWh exported to NY, Michigan, etc., for the week commencing May 17^th required Ontario ratepayers to pick up almost the full costs of our surplus and unneeded** generation and to also pay our neighbours to take it off our hands.  The cost of the latter was $148,134. and the cost of the generation based on the second IESO estimate of the GA for May was $39.4 million!  Those exported 308,616 MWh were equivalent to the “average” consumption of 1.8 million Ontario ratepayers for one week.  Those 1.8 million ratepayers if they lived in Ontario, unburdened by the GA costs, would have been paid .83 cents for their average weekly consumption.

Instead of a benefit, those ratepayers were obliged to pay 12.8 cents /kWh for power they didn’t consume and also pay $20.00 for their own “average” consumption of 172 kWh for the week.

Conclusion

In just two weeks of May Ontario ratepayers subsidized the generation and export of 587,328 MWh at a cost of $75 million (excluding costs of curtailed wind, spilled hydro, etc.) to ensure our grid was stable and not cause blackouts or brownouts.

What the foregoing highlights is the complete mess our various Ministers of Energy have made of Ontario’s electricity system by catering to the whims of the many unqualified environmental groups who have led our government down the path of contracting for intermittent and unreliable wind and solar generation at high rates to save the world without even so much as a cursory cost/benefit analysis.

Just those two weeks of May 2017 make it obvious: Free power is really expensive!

Parker Gallant,

June 6, 2017

* IESO’s weekly summaries commence Wednesday running to Tuesday of the following week.

**Unneeded generation costs include: spilled hydro, curtailed wind, steamed-off nuclear and idling gas plants.

Ontario’s cyclonic wind costs keep heading higher

Compare power output from wind and the cost to consumers between 2010 and 2016 and we learn this: we’re paying more for intermittent wind power, produced out-of-phase with demand

More wind=more cost [Photo: Dorothea Larsen]

In 2010, industrial wind turbines (IWT) in Ontario represented total installed capacity of approximately 1,200 megawatts (MW); they generated 2.95 terawatt hours (TWh^*) of transmission (TX) and distributed (DX) connected electricity.  The power from wind cost Ontario’s ratepayers about $413 million for those 2.95 TWh, about 2.1% of total 2010 consumption.  The cost of IWT generation in 2010 was 3.1% of total generation costs (Global Adjustment [GA] + Hourly Ontario Energy Price [HOEP]) and represented 33.5% of “net exports”^** of electricity to our neighbours in Michigan, New York, and others.

Wind was over 90% of exported power

Jump to 2016: wind turbines represented installed capacity of almost 4,500 MW, and generated and curtailed*** TX and DX connected electricity totaling 13.15 TWh.  The cost to Ontario’s ratepayers jumped to $1,894.3 million — about 12.2 % of total generation costs.  The 13.15 TWh of generation was 7.9% of Ontario’s total consumption but 94.9% of net exports.

The cost per kilowatt hour of electricity generated by wind in 2010 was 14 cents and in 2016 it had increased to 17.5 cents, despite downward adjustments to the contracted values between 2010 and 2016.   That cost doesn’t include the back-up costs of gas generation when the wind doesn’t blow and we need the power, nor does it include costs associated with spilled hydro or steamed off nuclear, but it does include the cost of curtailed wind, which was 2.33 TWh in 2016 and just shy of total wind generated electricity in 2010.

In the seven years from 2010 to 2016, Ontario’s electricity ratepayers picked up total costs of $7.746 billion for 56.9 TWh of grid-accepted and curtailed (4.9 TWh) wind-generated electricity.   The actual value given to those 56.9 TWh by the HOEP market was just shy of $570 million meaning ratepayers were forced to pick up the difference of $7.166 billion for power that wasn’t needed.  The foregoing is based on the fact we have continually exported our surplus generation since the passing of the Green Energy Act and contracted for IWT generation at above market prices.

During those same seven years, Ontario had “net exports” of 85.95 TWh while curtailing wind, spilling hydro and steaming off nuclear. And, at the same time, we were contracting for gas plant generators that are now only occasionally called on to generate electricity yet are paid considerable dollars for simply idling!

Refinancing wind payments

As noted above the cost of wind generation in 2016 was almost $1.9 billion and represented 15.3% of the Global Adjustment pot. That cost was close to what was inferred in an Energy Ministry press release headlined: “Refinancing the Global Adjustment” but suggesting it was taxpayer owned “infrastructure”:  “To relieve the current burden on ratepayers and share costs more fairly, a portion of the GA is being refinanced. Refinancing the GA would provide significant and immediate rate relief by spreading the cost of electricity investments over the expected lifecycle of the infrastructure that has been built.”

What’s really being refinanced is a portion of the guaranteed payments to the wind and solar developers who were contracted at above market rates! So, what is being touted as a 25% reduction includes the 8% provincial portion of the HST and a portion of annual payments being made to wind and solar developers for their intermittent (and unreliable) power.

Premier Wynne’s shell game continues!

(C) Parker Gallant

May 22, 2017

Note: Special thanks to Scott Luft for his recent chart outlining the data enabling the writer to complete the math associated with this Liberal shell game!

*    One  TWh equals 1 million MWh and the average household in Ontario reputedly consumes 9 MWh annually, meaning 1 TWh could power 111,000 average household for one year.

**   Net exports are total exports less total imports.

*** Ontario commenced paying for “curtailed” wind generation in September 2013.