Big Becky cost overruns: how come nobody got fired?

28 Tuesday Jan 2014

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Parker gallant on Big Becky: what is THAT going to cost you?

BigBecky

The big hole where your money goes

 

In February 2010 an article penned for the Financial Post I disclosed that the Ontario Power Generation’s OPG) new Niagara tunnel (“Big Becky”) was not only running late but had incurred substantial cost overruns—in excess of $600 million, in fact.
The effects of that overrun have not affected our electricity prices yet, but the writing is now on the wall based on the OPG application of September 27, 2013.  The increases requested in that rate application by OPG, if approved, will increase electricity rates by at least $6-7.00 per month ($72-84.00 annually) for the average 800-kilowatt (per month) consumer.   According to the submissions to the Ontario Energy Board (OEB), all of OPG’s “regulated” hydro rates will increase from 3.9 cents per kilowatt hour (kWh) to 4.4 cents per kWh due to the costs of the tunnel.  One-half a cent doesn’t sound like much, but when you consider that in 2012, OPG produced 18.5 billion kWh of unregulated hydro, it is time to bring out the calculators.
That overrun effectively means OPG is seeking to recover about $96 million annually for the cost of “Big Becky” for the next 50 years (amortization period), which equates to $4.6 billion for a tunnel originally estimated by OPG in the business case presented to their Board of Directors in 2005, to cost $873 million. It has cost 70% over that amount.
OPG is seeking approval for the foregoing as a rate increase for their “regulated” hydro as Big Becky is classified; that means it is considered “baseload” generation and its cost of production will be close to 10 cents a kWh.  At the same time they are also seeking approval for an even larger increase in their “unregulated” hydro which could generate as much as $300 million and was the cause of the media focus when they discovered the application.  The “anti-nuclear” lobby painted it as a rate increase related to OPG’s nuclear refurbishment plans, which was a false premise.
What the cost overrun on “Big Becky” demonstrates is that oversight at Queens Park is sadly lacking in the energy portfolio.   It is disconcerting to realize that this project was $600 million over budget, yet to the best of the writer’s knowledge no OPG employee or Board member was castigated or lost their job. A private sector firm would investigate and allocate “cause” to one or several individuals in the event a project of this size exceeded budget by a factor of 70%.
Perhaps it is time to privatize the electricity sector as the private, but regulated, natural gas sector has demonstrated they can do a much better job.
©Parker Gallant                                                                                                                                           January 25, 2014
The views expressed here are those of the author.
Reposted from Wind Concerns Ontario windconcernsontario.ca

London School of Economics study finds property value loss near wind power

26 Sunday Jan 2014

Posted by in Ottawa, Renewable energy, Wind power

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Research in Ontario on values of properties neighbouring wind power projects show a a range of loss on the order of 20-48%, as has been reported here.

The London School of Economics is about to publish a study based on transaction for properties near 150 wind “farms” studied over a 12-year period, which finds significant value loss.

Property value loss has been a hot-button issue for the wind power lobby, probably because it is proveable, and is a negative side effect of wind power projects, which can be very invasive in communities. The study is a sharp contrast to studies done by Ben Hoen in the United States, usually at the behest of and with funding from the wind power lobby. Mr Hoen famously produced a study claiming to have looked at over 7,000 properties—that was roundly criticized by people who know something about real property (Sunak & Madlener, Wilson, more).

This is just a preliminary news story; we look forward to reading the whole study on its release.

Property value loss in North Gower due to the proximity of the huge wind turbines (over 500 feet in height) to 1,000 homes, is estimated to be $134 million.

Donations to help us with legal advice are welcome; send to PO Box 3, North Gower ON  K0A 2T0

Proof wind turbines take thousands off your home: Value of houses within 1.2 miles of large wind farms slashed by 11%, study finds

  • Study by LSE found value of homes close to wind farms slashed by 11%
  • Home that costs £250,000 would lose £27,000 in value
  • Homes as far at two-and-a-half miles away could be reduced by 3%

By Sanchez Manning

PUBLISHED: 23:59 GMT, 25 January 2014 | UPDATED: 15:45 GMT, 26 January 2014

The presence of wind turbines  near homes has wiped tens of thousands of pounds off their value, according to the first major study into the impact the eyesore structures have on house prices.

The study by the London School  of Economics (LSE) – which looked at more than a million sales of properties close to wind farm sites over a 12-year period – found that values of homes within 1.2  miles of large wind farms were being slashed by about 11 per cent.

This means that if such a wind farm were near an average house  in Britain, which now costs almost £250,000, it would lose more than £27,000 in value.

Homes located within 1.2miles of wind farms can decrease in value by up to 11 per cent, a study has discovered

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Homes located within 1.2miles of wind farms can decrease in value by up to 11 per cent, a study has discovered

In sought-after rural idylls where property prices are higher, the financial damage is even more substantial. In villages around one of Southern England’s largest onshore developments – Little Cheyne Court Wind Farm in Romney Marsh,  Kent, where homes can cost close to £1 million – house values could drop by more than £100,000.

The study further discovered that even a small wind farm that blighted views would hit house values.

Homes within half a mile of such visible turbines could be reduced in value by about seven per cent.

Even those in a two-and-a-half-mile radius experienced price reductions of around three per cent.

Homes within a two-and-a-half mile radius could see reductions of up to three per cent

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Homes within a two-and-a-half mile radius could see reductions of up to three per cent

The report’s author, Professor Steve Gibbons, said his research was the first strong evidence that wind farms are harmful to house prices.

MORE ‘GREEN C**P’ TO BE CUT AS CARBON TAX IS SLASHED

Green taxes are set to be frozen to reduce soaring energy bills.

Whitehall sources say the Government is preparing to put the brakes on the ‘carbon tax’ on greenhouse-gas emissions, with an announcement expected in the Budget in March.

Prime Minister David Cameron has reportedly instructed aides to ‘get rid of all this green c**p’ to reduce energy bills, which currently average £1,350 a year.

Prof Gibbons, director of the LSE’s Spatial Economics Research Centre, said: ‘Property prices are going up in places where they’re not visible and down in the places where they are.’

The study, which is still in draft form but is due to be published  next month, focused on 150 wind-farm sites across England and Wales. It compared house-price changes in areas that had wind farms, were about to see one built  or had seen one rejected by the  local authority.

Last night Chris-Heaton Harris, MP for Daventry, said: ‘There’s plenty of anecdotal evidence – especially in my constituency – of house-price reductions near wind turbines. The question is, will anybody be liable for these losses in future?’

And Bob Ward, policy and communications director at the Grantham Research Institute on Climate Change and the Environment at the LSE, said: ‘These results are not really surprising as it is already known that people place a value on countryside views.’

A Department for Energy and Climate Change spokesman said: ‘Developments will only get permission where impacts are acceptable.’

A spokesman for Renewables UK, which represents the wind industry, said: ‘We will be analysing the conclusions closely when the final report is issued.’

Green Energy Act the most important issue for rural, small town Ontario

26 Sunday Jan 2014

Posted by in Ottawa, Renewable energy, Wind power

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With a possible provincial election in the spring, and a municipal election in October, this story will be of interest to political hopefuls: the Green Energy Act has been a disaster for rural/small-town Ontario.  While concerns about the GEA were at number one, worries about jobs came in second–we propose that the two are closely linked, as Ontario’s soaring power bills drive businesses away, and make it difficult for businesses to compete. Jobs are being lost, not created.

Wind Turbines a Concern for Rural Ontario

Sunday, January 26, 2014 2:41 PM by Fadi Didi
Bayshore Broadcasting poll reveals listeners and readers worried about Green Energy Act

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Bayshore Broadcasting News asked you what you think the biggest concern is for rural Ontario in 2014, and the Green Energy Act spun out at number one.

Thirty-six percent of respondents feel the Green Energy Act or environmental sustainability is a major worry for those living in the province’s country lands.

The poll results follow a year rich with wind turbine controversy, including 78 towns, municipalities, and counties declaring themselves unwilling to host turbines.

Ontario’s Progressive Conservatives refused to support the act, stating they would not support the GEA until a Health Canada study ruled winds turbine do not negatively effect health.

Just trailing the concern over Green Energy at thirty-three percent is the worry of employment opportunities in rural Ontario.

Respondents worried that the few jobs in country areas do not pay very well, and that even those jobs are scarce.

Farm revitalization and transportation improvement were of the least concern to respondents, each coming in at six percent.

Germany: not the coolest kid on the block

23 Thursday Jan 2014

Posted by in Health, Renewable energy, Wind power

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The Ontario government and the gigantic wind power lobby group have routinely pointed to Germany as the shining example of how green energy works, and especially wind power. Apparently, things aren’t so lovely in Germany where, by the way, there are community groups opposed to siting wind power projects too close to people.

Here is the story from The Telegraph.

Ostrander Point appeal: citizens vs government in court next week

17 Friday Jan 2014

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Final chapter

Fair-Fight

PECFN and APPEC are represented by Eric Gillespie and Natalie Smith. The MOE is represented by Sylvia Davis and Sarah Kronkamp. Gilead Power’s case will be argued by Doug Hamilton, Chris Wayland and Sam Rogers of Mc- Carthy Tetrault.

Ostrander Point victory to be tested in appeal court next week

There are many people will be nervously watching developments in a Toronto courtroom beginning next Tuesday. It is here that likely the last chapter of the industrial wind turbines on Ostrander Point is to be written.

HOW WE GOT HERE
In 2009, the Green Energy Act was made law. The sweeping legislation comprised an array of measures designed to ease the development of more renewable energy projects in the province. It reduced or eliminated regulations and processes used by its safeguarding agencies, including the Ministry of Environment, the Ministry of Natural Resources and the Ontario Energy Board. It replaced several regulatory appeals with one—the Environmental Review Tribunal.

Politicians, such as former MPP Leona Dombrowski, assured anxious rural Ontario residents, communities and their local leaders that the ERT, or Tribunal, would be independent, thorough and their conclusions would be final. Many residents were unsettled by the assurances—viewing the ERT as merely the last checkbox for a developer to tick before being released to plunder the provincial treasure and lay waste to the rural countryside. It was viewed as a cynical contrivance by a government fixated on seeing thousands of industrial wind turbines spinning in the provincial countryside. It would be Premier Dalton McGuinty’s legacy to Ontarians.

To ensure ERT adjudicators weren’t being led astray by sympathetic arguments by those defending their communities, livelihoods and natural environment, the Green Energy Act dictated that the legal test for the ERT would be impossibly high.

To be successful an appeal to this panel would have to prove “serious harm to human health” or in the case of birds, animals and their habitat the requirement is to prove “serious and irreversible harm.”

OSTRANDER POINT
Late in 2011 the Ministry of Environment issued a Renewable Energy Approval to Gilead Power Corporation, enabling it to proceed with its plan to erect nine industrial wind turbines, each soaring 423 feet into the flight path of the millions of birds that migrate through the region each spring and fall. It granted the approval on Crown Land—essentially industrializing a rugged and largely wild bit of the south shore of Prince Edward County.

Two appeals were made to the province’s ERT.

The Alliance to Protect Prince Edward County presented witnesses who described the damaging effects of living near industrial wind turbines. They presented scientific and medical evidence to support their position that wind turbines were hurting Ontario residents and that no other project should be permitted until a thorough and independent study of the health effects was conducted and shown to be safe.

The Prince Edward County Field Naturalists presented expert evidence on the rare and sensitive alvar habitat at Ostrander Point. Evidence showed that a number of endangered species of birds and animals shared this unique ecosystem, and that tipping the balance to industrial development would put the survival of endangered species in peril.

Read the full article here.

Minister Chiarelli: you need “better control” of your power costs

16 Thursday Jan 2014

Posted by in Ottawa, Renewable energy, Wind power

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As per our post on Monday, a panel consisting of a local business representative, a social assistance agency, and a farm owner were guests on CBC’s Ottawa Morning show, to discuss the impact of rising electricity bills. They all said that time-of-use had affected them significantly, and the increase in electricity rates was just going to be worse. The farm owner, Peter Ruiter of Black Rapids Farm, said his cows need to be milked at the appropriate times every day, and there was no time-of-use flexibility for his operation. He invited Energy Minister Bob Chiarelli to come and see for himself.

Mr Chiarelli was interviewed on the show yesterday: his appearance was, in our view, a shocking demonstration of partisan politics but worse, one of complete ignorance of the power situation in Ontario. His claim that Ontario Power Generation made $7B for the taxpayers of Ontario is false, for example. And his claim that power bill increases are just a “blip” is insulting. While interviewer Hallie Cotnam caught him out on that, there was no question as to why the province continues to approve multi-million-dollar deals with wind power developers, for power we don’t need.

The link to the entire interview is here.

The rumour is that Mr Chiarelli is going to retire and not run in the next provincial election. Given his performance in this all-important portfolio, we think that is a “smart” decision.

Ontario’s electricity bills: rising costs for everyone

13 Monday Jan 2014

Posted by in Ottawa, Renewable energy, Wind power

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Ottawa Morning

Here from today’s CBC show Ottawa Morning, is a panel discussion on the impact of Ontario’s rising electricity bills. The panelists include a representative from the Preston Street BIA, a representative of an agency trying to help people in need, and an Ottawa area dairy farmer.

The message is a powerful one: rising electricity bills will result in increased costs for everyone including for food, as well as job losses as business try to cope.

Dairy farmer Peter Ruiter of Black Rapids Farm says the province ought to have figured out how it was going to pay for its renewables progarm. He invited Energy Minister Bob Chiarelli to come to his farm.

Listen to the program here.

 

 

Senator Bob Runciman: Environment Ontario “derelict” in duty if Amherst Is power plant allowed

10 Friday Jan 2014

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NEWS RELEASE
Senator Robert Runciman>
OTTAWA, January 10, 2014 – It will be a dereliction of duty if the Ministry of Environment allows a major industrial wind turbine project to go ahead on Amherst Island, Senator Bob Runciman said today.

Runciman was responding to the news that the Ontario government has deemed complete a Renewable Energy Approval application by Windlectric for up to 37 giant turbines to be installed on Amherst Island, just west of Kingston. The government is now inviting public comment on the proposal until March 8.

The senator, who introduced a motion passed unanimously by the Senate two years ago calling for a moratorium on such projects in Important Bird Areas such as Amherst Island, has written the Ministry of the Environment objecting to this latest project. He noted that a similar project on Wolfe Island, also an Important Bird Area, has proven to be one of the deadliest for birds and bats in North America.

“The government is riding roughshod over local objections, including by the duly elected council of Loyalist Township, and ignoring that this is one of the most critical areas for birds in North America, and home to 34 species at risk,” Runciman said.

“If anyone came along with a proposal posing this kind of threat to birds and other wildlife in such a sensitive area, but it didn’t have the words ‘Green Energy’ stamped on it, there would be no question this government would put a stop to it,” Runciman said. “And if they didn’t, the environmental lobby would harass them until they did. But because it’s green energy, the environmental movement seems content to ignore the despoiling of the environment and the wanton killing of birds.”

The situation is even more tragic, considering that the expansion of renewables, which typically provide power at times when there is no demand, has resulted in a huge over-supply of electricity, meaning it is being sold to places like Michigan, Minnesota and Quebec at a fraction of the cost of generation.

“We are destroying the quality of life in rural communities to produce power we don’t need and then giving that power away to neighbouring jurisdictions at roughly 25 per cent of the cost we’re paying to generate it. Then those jurisdictions use that cheap power to compete with Ontario industries. Is it any wonder Ontario lost more than 39,000 jobs last month alone?” Runciman said.

For more information or to arrange an interview, please contact:
Barry Raison, Policy Advisor, Office of Senator Bob Runciman
(613) 943-4020 (office) or barry.raison@sen.parl.gc.ca

National Post: Ontario taxpayers don’t benefit from power exports

10 Friday Jan 2014

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Energy Minister Bob Chiarelli likes to crow about how much money Ontario is making when it sells its surplus power. The truth is something far different, even in Mr Chiarelli’s millions-equal-Tim-Hortons-coffees world of mathematics.

Scott Stinson: Ontario powers up electricity exports but taxpayers see little benefit

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Scott Stinson | January 9, 2014 6:58 PM ET
More from Scott Stinson | @scott_stinson

Jurisdictions that import electricity from Ontario pay close to the wholesale market price but consumers in the province pay much more.

Tyler Anderson/National Post
Jurisdictions that import electricity from Ontario pay close to the wholesale market price but consumers in the province pay much more.

At a time when Ontario has seen its manufacturing industry crater, the province has found that it can still do a booming business with one type of export: electricity.

Unfortunately for ratepayers, the business model is a little unsound. If energy were doughnuts, Ontario would still be expanding its dough supply, while sending ever more trucks full of discounted day-olds to places like Michigan, Minnesota and Quebec.

The province’s Independent Electricity System Operator on Wednesday released its year-in-review of the province’s energy data. Most of the numbers were as expected, with wind energy an increasing part of the supply mix, coal a decreasing part of it and nuclear energy remaining the backbone of the grid.

Energy exports, meanwhile, “rose to 18.3 TWh,” which is an awful lot of electricity: enough to power 300 billion 60-watt bulbs for an hour. The province’s exports have been on a steady upward trend; the 2013 total is a notable jump from 14.6 TWh in 2012 and from 12.9 TWh in 2011, according to figures released by the IESO last year. Exports have increased by almost 50% over that two-year period.

This would be a welcome development if the province and its ratepayers — which is to say, you — received a return for our electricity that was equal to, or ideally above, the amount that was paid to produce it.

But it does not. Jurisdictions that import electricity from Ontario pay something close to the wholesale market price of electricity, a number that changes hour by hour and is dependent on factors too numerous to list here. For 2013 the average wholesale price was between 2.5¢/kWh and 3¢/kWh. The cost paid to produce that electricity, again using the IESO’s own numbers, is on average about 8.5¢/kWh, or about four times the wholesale price.

Consumers pay, again depending on a host of factors, something much closer to the larger number, because built into the cost of our electricity is everything from capital investment to executive salaries to the payout for when gas plants are cancelled in the middle of election campaigns.

This trend, where Ontario ships excess electricity to its neighbours at steep discounts, is not new. In 2011, the province’s Auditor-General noted in a report that “the price Ontarians pay for electricity and the price it charges its export customers … have in recent years been moving in opposite directions.”

Read the full story here.