While Ottawa’s Bob Chiarelli, Ontario Minister of Energy, insists that paying high and selling low is a good economic strategy (meanwhile inflicting dramatic increases in bills to consumers), economic analysts don’t seem to agree. Here from Forbes. com is a view of Ontario’s handling of the electricity sector.
Ontario’s high electricity prices are bad for business
Jude Clemente, Forbes/Energy, March 30, 2016
“Ontario is probably the worst electricity market in the world,” Pierre-Olivier Pineau, University of Montreal
Ontario’s auditor general just reported that the province paid an extra $37 billion for electricity from 2006-2014, likely the most ludicrous energy story that I’ve ever read (here). Ontario has gone from having some of the most affordable electricity in North America to having some of the most expensive. From 2013-2015 alone, industrial electricity rates increased 16%.
- The Green Energy Act (GEA) “is costing Ontario over $5 billion annually but yields negligible environmental benefits,“and the plan has been 10 times more costly per year than an alternative coal retrofit plan examined in 2005.
- The GEA prioritizes wind, even though wind power generation is almost perfectly out-of-sync with consumption in Ontario, resulting in the dumping of surplus wind energy into outside markets. “Electricity exports cost Ontario taxpayers $200 million in June.”
- In 2003, the provincial government decided to phase-out coal-fired generation by 2007 (later extended to 2014), perhaps the most cost effective source of power.
- This necessitated investment in new sources of electricity. For example, more expensive wind has provided less than 4% of Ontario’s power but accounts for 20% of the cost of electricity. In January, Ontario Power Generation unveiled plans for a $13 billion refurbishment of four nuclear reactors, which could crush ratepayers to recover the total costs.
Read the full article at Forbes.com here.