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Tag Archives: Brad Duguid

The collected wisdom of Energy Minister Chiarelli

29 Monday Sep 2014

Posted by Ottawa Wind Concerns in Renewable energy, Wind power

≈ 1 Comment

Tags

Bob Chiarelli, Brad Duguid, Charles Sousa, Dr Arlene King, Health Canada wind turbine noise study, health study turbine noise, Ontario, Ontario electricity bills, Ontario Liberal Party, Ontario Ombudsman, Parker Gallant, power system Ontario, wind power

Minister Chiarelli: words of wisdom

Ummm...uhhhh...er... [The musings of Bob Chiarelli]
Ummm…uhhhh…er… [The musings of Bob Chiarelli]

In the approximately one and a half years that Bob Chiarelli has been Energy Minister, he has made many observations about the electricity sector in Ontario. I thought it might be amusing to see a collection of them, altogether.

  • When Minster Chiarelli announced the end of the Ontario Clean Energy Benefit (January 1, 2015) he said: “The provincial government is trying to rejig hydro bills to ensure that customers aren’t hit with a sharp increase when the Ontario Clean Energy Benefit is phased out.”  And, “The plan was to also eliminate the debt retirement charge on hydro bills at the same time.”  The announcement of those simultaneous actions raised the average ratepayer bill by $100 annually but in Mr. Chiarelli’s wisdom that wasn’t a “sharp increase”!
  • Minister Chiarelli announced that “wind turbine developers” would be “paid to not produce power” and bragged it would save ratepayers $200 million annually!  He didn’t promise that rates would fall as a result of the savings, however, and he also failed to note that the money paid “to not produce power” would raise the per kWh cost of the actual power produced!
  • The Minister announced that the Samsung contract had been revised and would “save ratepayers money,”  $3.7 billion over the 20-year term.   Once again, no promise of rates falling, just that they wouldn’t increase as much as previously anticipated.
  • Minister Chiarelli told us that “over the next 20 years, rates would increase 3.4 % per year” (after the Samsung announcement) but this writer’s bill increased 9.1% in only one year, as have most ratepayers bills.  We are all looking forward to the 3.4% increase after 10 years of 10% increases.
  • Minister Chiarelli holds the record of the nine Liberal Ministers of Energy for issuing 22 “directives” to the OPA, surpassing Brad Duguid, the previous record holder at 19.  Apparently Liberal Energy Ministers know more than the “experts” running the electricity system!
  • The first directive issued by Minister Chiarelli on June 23, 2023 instructed the OPA to expand FIT and MicroFIT contracts; that was superseded by his most recent directive of August 29, 2014 telling them to scale back, even though they hadn’t achieved his original target.
  • Minister Chiarelli has been consistent in telling all Ontario ratepayers to “conserve” but he recently issued a new directive instructing the OPA to create a new program so large industrial companies would “consume more” at rates at a third of what the rest of us pay.
  • Minister Chiarelli referred to the cost of the gas plant move from Oakville as the “price of a Timmie’s coffee” and uses that analogy often when talking about increasing electricity rates.   Is this a new currency he plans on bringing in if he is appointed Finance Minister for the Province?
  • Minister Chiarelli in his “Minister’s Message” in his long-term energy plan, “Achieving Balance” says, “Ontario has adopted a policy of Conservation First,” and a chart in the plan “Forecast Energy Production (TWh) 2032” claims it willcontribute 30 TWh of energy efficiency by then.   I presume he noticed that 30 TWh of nothing won’t toast your bread!
  • The same Minister’s Message also says, “We will work with our agencies and the province’s local distribution companies to ensure they operate more efficiently and produce savings that will benefit Ontario’s ratepayers.”  Meanwhile, the largest and most costly large distributor in the province, Hydro One (owned by the province)is being investigated by Ontario’s Ombudsman for a billing system causing havoc for its 1.1 million ratepayers.  Ironically, the recent budget from Minister of Finance, Charles Sousa, talks about maximizing profits from it to increase revenues to help reduce the budget deficit.  That puts Minister Chiarelli in conflict with Minister Sousa!  Wonder who will win?
  • Minister Chiarelli wants us all to conserve but his “Achieving Balance” plan comes up short as it will actually increase emissions according to the Power Workers Union and the Ontario Society of Professional Engineers.  The Power Workers,  “the plan is short-sighted in its thinking, will leave the province vulnerable to supply shortages and willreverse the decline in greenhouse gas (GHG) emissions attributed to the successful restart of units 1 and 2 at Bruce Power by relying significantly more on natural gas generation when the Pickering Nuclear Station closes.”
  • Minister Chiarelli in an interview had this to say about engagement with municipalities:  “Our government wants to ensure that future renewable energy projects will be built in the right place at the right time.”  So, municipalities can have their “say,” they just can’t say “no.”
  • Minister Chiarelli in the same interview was asked a question about the possibility of a moratorium on wind projects until the federal health study was complete. He said, “Dr. Arlene King [former Chief Medical Officer of Health] undertook a review of the potential health effects of wind turbines. Her 2010 report stated that there is no scientific evidence to date to support claims that wind turbine noise cause adverse health effects.”   We know Dr. King’s report was nothing more than a “literature review,” is contentious and outdated, but our Energy Minister pretends it is the last word.

This is a quick review of Minister Chiarelli’s management of the Ontario electricity sector, highlighting his contradictory views, his conflicts, his approach to the addition of wind turbines to Ontario’s energy sector and  their mediocre potential to contribute to Ontario’s electricity needs.   A deeper review of Chiarelli’s performance and that of his predecessors would have turn up more results and more of egregious statements.

What stands out is that the Ontario Liberal government has contrived to make Ontario the most expensive market for electricity in North America, a major factor in Ontario’s mediocre economic performance.

©Parker Gallant

September 29, 2014

The views expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.

Re-posted from Wind Concerns Ontario

Ontario energy ministers’ hydro rate forecasts off

20 Wednesday Aug 2014

Posted by Ottawa Wind Concerns in Uncategorized

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Tags

Bob Chiarelli, Brad Duguid, electricity bills Ontario, hydro bills Ontario, Hydro One, Parker Gallant, wind power

Parker Gallant: Ontario’s energy ministers’ forecasts: don’t believe a word

Hydro One serves less than one-quarter Ontario customers, yet has more “costs”

In late 2009, with the advent of the Green Energy and Green Economy Act, then Energy Minister George Smitherman proclaimed that electricity rates would only rise by 1% per year.  The 2010 Minister of Energy Brad Duguid launched his personal version of the Long-Term Energy Plan (LTEP) and included a forecast that electricity rates would rise by an average of 7.9 %over the next three years.   In late 2013 Energy Minister Bob Chiarelli produced his LTEP. His forecast? Electricity rates would rise by 42% over the ensuing five years and by 33% over the next three.

George, Brad and Bob have a treat in store: the Ontario Energy Board’s 2013Yearbook of Distributors is now out, and actual results show that all their forecasts appear to have been grossly understated.

Comparing the “cost of power” (COP) for the year ended December 31, 2013 to that of 2012 shows the COP increased by over $1.6 billion (for less consumption) by Ontario’s ratepayers (not including Ontario’s large industrial users and exports) which translated to a 15% jump, well over forecasts of the past and present Energy Ministers.

$350 a year more to our bills

That $1.6 billion jump in the cost of power from 2012 to 2013 added about $350 annually to the typical ratepayers bill.

The Yearbook is a labyrinth of data to be mined for more interesting information.  For example, the OMA (operations, maintenance & administration) costs for 2013 increased by $97 million (6.4%) over 2012 for the 73 LDCs (local distribution company) reporting.  One could assume that the increase can be shared equally by all 73 LDCs, but no: $68 million or 69% of that increase came from Hydro One even though they only service 24.7% of Ontario’s ratepayers.

Looking back to the first Yearbook (2005 year end) and comparing average kilowatts (kWh) consumed per customer per month, you calculate that it has decreased by 11.2% from 2,378 kWh to 2,112 kWh.  At the same time Hydro One customers decreased their usage by only 5.6 % (104 kWh) but started at a much lower average level of consumption. This is surprising in that the OEB allows Hydro One to use a higher average consumption level when applying for a rate increase.  It may be a reflection on the inability of OEB staff to look at data in a different fashion instead of the “isolation” they appear to apply to each and every rate increase application.

In 2012 the OEB started collecting new data referred to as “Full-time Equivalent Number of Employees” (FTE) and if one totes up the numbers you find that the LDC sector had 10,022 FTEs at the 2013 year-end, of whom 3,291 (33%) are FTEs of Hydro One. Again, Hydro One serves just 24.7% of Ontario’s ratepayers.

Take those FTE numbers and use the data supplied in some of the other 102 Yearbook pages you can determine the average cost of each FTE  (adding up OMA costs for 2013, all staffing costs, and then dividing by the number of FTEs).  For 2013, if you deduct Hydro One’s OMA costs and FTEs you get  72 LDCs claimed costs at $1.001 billion and FTEs were 6,731 — so the “average” cost per FTE $148,760.  For Hydro One the OMA costs were $604.7 million for 3.291 employees making the “average” cost for a Hydro One FTE $183,744.  One has to ask, Are Hydro One workers worth the extra $35,000?

The other information that started appearing in the Yearbook a couple of years ago under “liabilities” was what is referred to as “Employee future benefits” (EFB) which one assumes is what the individual LDC has allocated towards pension and other retirement benefits.   For 2013 the EFB for the 72 LDCs (excluding Hydro One) was $468 million and if one simply divides that value by the FTEs (excluding Hydro One) you determine those EFBs average $69,529 per FTE or about $70,000 per employee to cover future pension and post retirement benefits.

Do that for Hydro One and you see they allocated $824 million (increased by $248 million, up 43% in just two years, from 2011) towards their EFBs.  Calculating what that is for each of their 3,291 employees you are better able to understand what the Leech Report highlighted about the unaffordability of the pensions and benefits at Hydro One, OPG, and the other electricity-related Crown corporations. Employees chip in $1 for every $4 of employer (in other words, you and me, the ratepayer) contributions.

Hydro One’s liability for “future benefits” represented almost 64% of the total of “Employee future benefits” at the end of 2013 — again to service just 24.7% of all ratepayers.

In fact, the liability per Hydro One employee of $250,000 at the end of 2013 was more than three times that of the other 72 local distribution companies.

More pain in the future

Ontario finished 2013 with slightly less than 1,200 MW of solar and 2,800 MW of wind in operation.  That amount of wind and solar played the major role in causing the extraordinary jump in the cost of power.  As of March 31, 2014 an additional 3,000 MW of wind generation and 1,000 MW of solar is either contracted for or under construction, which will double the sources of intermittent and unreliable  generation.  Those contracts will push up the cost of power by $350, or more, per annum, for the “typical” householder — in other words,  George, Brad and Bob all missed forecasts by a long shot.

Don’t expect to see the Ontario government tackle the rising costs of electricity caused by the incredibly generous salary and benefits programs and increasing amounts of wind and solar added to the grid. With billions of dollars destined annually for wind and solar developers, and huge shortfalls in the overly generous pensions and future benefits of the (mainly) provincial owned electricity entities, Ontarians will see continuing double digit growth in electricity costs.

Ontario ratepayers simply cannot believe what the Energy Ministers say.

©Parker Gallant

August 18, 2014

The views expressed here are those of the author.

Republished from Wind Concerns Ontario.

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