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Tag Archives: cost-benefit analysis renewables

10 years of “irrational” energy planning in Ontario

03 Tuesday Jun 2014

Posted by ottawawindconcerns in Renewable energy, Wind power

≈ 1 Comment

Tags

Auditor General Ontario, cost-benefit analysis renewables, Dalton McGuinty, electricity bills Ontario, Green Energy Act, Ontario, Ontario Hydro, Ontario Power Authority, Parker Gallant, power costs Ontario, wind energy

Here from former banker Parker Gallant, an analysis of what has gone wrong on the energy file in Ontario over the last 10 years.

Ontario’s Power Trip: Irrational energy planning has tripled power rates under the Liberals’ direction

Parker Gallant, Special to Financial Post | June 2, 2014 | Last Updated:Jun 3 8:17 AM ET

Dalton McGuinty's Liberals claimed the province’s electricity sector was in a mess when they took over in 2003. Look at it today.

Ontario Hydro may well have been a mess. But it was a mess that produced less expensive electricity

In the summer of 2003, just before Dalton McGuinty’s Liberals gained power in Ontario, 50 million people in the U.S. Eastern Seaboard and Ontario suffered an electricity blackout caused “when a tree branch in Ohio started an outage that cascaded across a broad swath from Michigan to New England and Canada.” Back in 2003 Ontario’s electricity prices were 4.3 cents a kilowatt hour (kWh) and delivery costs added 1.5 cents per kWh. An additional charge of 0.7 cents — known as the debt retirement charge to pay back Ontario Hydro’s legacy debt of $7.8-billion — brought all-in costs to the average consumer to 6.5 cents per kWh.

The McGuinty Liberals claimed the province’s electricity sector was in a mess when they took over in 2003. The Liberals’ first Energy minister, Dwight Duncan, said then that he rejected the old Ontario Hydro model. “It didn’t work. We’re fixing it. We’re cleaning up the mess.”

Fast forward 11 years. Today, Ontario electricity costs average over 9 cents per kWh, delivery costs 3 cents per kWh or more, the 0.7-cent debt retirement charge is still being charged, plus a new 8% provincial sales tax. Additional regulatory charges take all-in costs to well over 15 cents per kWh.. The increase in the past 10 years averaged over 11% annually. Recently, the Energy Minister forecast the final consumer electricity bill will jump another 33% over the next three years and 42% in the next 5 years.

Summing up: Whatever mess existed in 2003 is billions of dollars worse today. The cost of electricity for the average Ontario consumer went from $780 on the day Dalton McGuinty’s Liberals took power to more than $1,800, with more increases to come. The additional $1,020 in after-tax dollars extracted from the province’s 4.5 million ratepayers is $4.6 billion – per year!

Why?

First, the Liberal Party fell under the influence of the Green Energy Act Alliance (GEAA), a green activist group that evolved into a corporate industry lobby group that adopted anthropogenic global warming as a business strategy. The strategy: Get government subsidies for renewable energy. The GEAA convinced the McGuinty Liberals to follow the European model. That model was: Replace fossil-fuel-generated electricity with renewable energy from wind, solar and biomass (wood chips to zoo poo). In the minds of those who framed the Liberal’s energy policies, electricity generated from wind, solar, biomass – green energy – was the way of the future.

The plan was implemented through the 2009 Green Energy and Green Economy Act (GEA), a sweeping, even draconian, legislative intervention that included conservation spending and massive subsidies for wind, solar and biomass via a euro-style feed-in-tariff scheme. The GEA created a rush to Ontario by international companies seeking above market prices, a rush that pushed the price of electricity higher. The greater the increase in green energy investment, the higher prices would go.

At the same time, Liberals forced installation of smart meters, a measure that added $2-billion to distribution costs. Billions more were needed for transmission lines to hook up the new wind and solar generators. At the same time, wind and solar generation – being unstable – needed back-up generation, which forced the construction of new gas plants. The gas plants themselves became the target of further government intervention, leading to the $1-billion gas plant scandal.

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To force adoption of often unpopular wind and solar plants, the GEA took away municipal rights relating to all generation projects, stripping rural communities of their authority to accept or reject them.

To pay for the rising subsidies to wind and solar, the Liberals adopted an accounting device that would spread the cost over all electricity consumers. The device was called the “Global Adjustment.” The Global Adjustment draw on consumers grew fast and will continue its upward movement. In effect, the Global Adjustment is a dump on ratepayers for energy costs that are above market rates. During 2013, the total global adjustment was $7.8-billion. Of that, 52% went to gas/wind/solar/biomass.

The GA for 2014 is expected to rise to $8.6-billion, adding another 2.9 cents per kWh for each electricity consumer.

To oversee all this, the Liberals established the Ontario Power Authority to do long-term energy planning (LTEP) and to contract renewable generation under the feed-in tariff (FIT) program that guaranteed wind and solar generators above-market prices for 20 years or more. In 10 years Ontarians have seen four versions of the so-called long-term plan, suggesting there is nothing long-term or planned. The Auditor General’s report of Dec 5, 2011, disclosed that no cost/benefit analysis was completed in respect to those feed-in tariff contracts.

Whatever mess existed in 2003 is billions of dollars worse today

The numerous Liberals who have sat in the Energy Minister’s chair have had a penchant for believing how the sector should function, issuing “directives” from the cabinet. The directives created the most complex and expensive electricity sector in North America. The Association of Major Power Consumers issued a “Benchmarking” report in which they stated: “Our analysis shows that Ontario has the highest industrial rates in North America. Ontario not only has the highest delivered rates of all these jurisdictions; the disparity in rates also is growing.”

The almost 100 directives over the past 11 years from Liberal energy ministers have instructed the OPA, the Ontario Energy Board, Ontario Power Generation and Hydro One on a wide variety of issues from building a tunnel under Niagara Falls to paying producers for not generating power, subsidizing industrial clients for conservation while subsidizing other industrial clients for consumption. Numerous new programs have been created that support clients in Northern Ontario, urban clients for purchasing EVs (electric vehicles), homeowners for purchasing CFL light bulbs and a host of other concepts without weighing the effect on employers or taxpayers.
Aside from the burden on consumers, Ontario’s Power Trip has cost jobs as companies – Caterpillar, Heinz, Unilever and others – closed Ontario operations while others, such as Magna, failed to invest in Ontario due to high electricity prices and high taxes that would have created private sector jobs.

Were “green energy” jobs created? Government claims hit 31,000 in a press release in June 2013 but since then no mention of green job claims appears in releases. The recent budget of Finance Minister Charles Sousa reported 10,100 jobs in the “clean tech” sector, a far cry from earlier claims.

Ontario Hydro may well have been a mess a decade ago. But it was a mess that produced electricity priced to consumers at 6.5 cents a kWh. Current prices of 15 cents a kWh will rise to over 20 cents a kWh by 2018/19, forcing the average Ontario ratepayer to pay an additional $700 annually. By that date the cost of “renewable energy” to Ontario’s 4.5 million ratepayers will result in an annual extraction of $8-billion to satisfy the perceived benefits of wind, solar and biomass. Over the 20 years of the FIT contracts, $160-billion in disposable income will be removed from ratepayer’s pockets to access a basic commodity, all in the name of “global warming” and renewable power without use of a cost/benefit analysis.

Perhaps it is time for a change in the governing of Ontario and particularly the way the electricity sector is overseen.

Parker Gallant is a former Canadian banker who looked at his local electricity bill and didn’t like what he saw.

Read the full opinion and comments here.

Email us at ottawawindconcerns@gmail.com

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Wind power approvals pushing electricity bills higher

13 Thursday Feb 2014

Posted by ottawawindconcerns in Renewable energy, Wind power

≈ 1 Comment

Tags

cost of renewables, cost-benefit analysis renewables, Feed In Tariff Ontario, Green Energy Act Ontario, Kathleen Wynne, Ontario Ministry of Energy, wind power Ontario

Wind Power Project Approvals Driving Up Cost of Ontario’s Electricity

By Parker Gallant

The provincial government would have us believe it is taking steps to manage rapidly rising electricity costs. Meanwhile, in the background, they are pushing 55 wind turbine projects through the Renewable Energy Approval process, projects  that will add $1.1 billion per year to Ontario’s electricity costs.  The impact of these turbine projects is 20 times the cost of the gas plant relocations. 

The 230-megawatt  (MW) Niagara Region Wind Project proposed for West Lincoln and Wainfleet in the Niagara Region alone will add $78 million annually to Ontario’s electricity costs when approved.  The cost over its 20-year contract is $1.6 Billion.  Rather than declining or delaying these 55 projects, the provincial government continues to issue approvals and increasing electricity costs to levels that Ontario household and business users cannot afford. 

In fact, wind power projects continue to be approved almost weekly despite Ontario’s current surplus of electricity.  Some operators of existing wind power generation facilities are actually being paid not to produce electricity, and neighbouring jurisdictions like New York and Michigan are being paid to take Ontario’s surplus power, which they in turn use to attract jobs away from Ontario with cheap electricity.  To create capacity on the grid for the expensive power generated by wind turbines, Ontario is also idling the Niagara hydro plants which in the past have powered Ontario’s economy by supplying cheap clean electricity.

The truth is that wind is not a reliable source of electric power.  In Ontario, wind turbines generate most of their electricity at night, and in the fall and winter months—exactly when we don’t need it. To provide the electricity needed by the province during the day, and in the hot summers, Ontario has had to supplement wind turbines with gas plants to provide electricity when the wind is not blowing.  This means that the average Ontario electricity user will not only pay about $220 annually for the cost of the wind turbine contracts but also another $200 annually to pay for the base costs of the gas plants needed to back them up.  Ontario electricity ratepayers could do a lot with that $420.

While the government argues that it has no option but to proceed with these projects, Ontario court have confirmed that the Feed-in-Tariff contracts issued for these projects only allow the proponent to enter a “complex regulatory process that might have led to approvals” and that the Environmental Project Act gives the Ministry of the Environment Director “broad powers to issue, reject, or amend Renewable Energy Approvals.”  The known impacts of existing wind power projects on communities in rural Ontario give the Ministry of the Environment Director a basis for rejecting or delaying these projects.  The Ontario government is pursuing wind power without a proper cost-benefit analysis, as was pointed out by the Auditor-General in 2011; no analysis was done before launching into the wind power program, or since. Citing benefits to the environment, is not an appropriate rationale:  with the coal plants closed, there is no need for concern about pollution from them, and there are also valid concerns about environmental damage and harm to wildlife from wind power plants.

For example, the government’s own Environmental Review Tribunal revoked approval to construct the Ostrander Point project last July because the project would cause “serious and irreversible harm” to the endangered Blanding’s turtles native to the area.  Rather than accepting that decision, however, the Ministry of the Environment partnered with the wind industry in January to appeal this ruling in the Ontario Superior Court of Justice in Toronto; the Ministry is trying to overturn the decision to protect the turtles.  Similarly, the Ministry continues to support the Wainfleet Wind Energy project, despite the obvious dangers presented to users of the nearby Skydive Burnaby facility.

Electricity costs in Ontario are now among the highest in North America. Ontario households and businesses have reached the limit of their capacity to pay for this Green Energy experiment. It is time for the Ontario government to stop approving more wind turbine projects, like the Niagara Region Wind Project, that will drive up the cost of electricity in the province for the next 20 years while generating electricity we do not need. 

Parker Gallant is a former vice-president with the TD Bank, a former director with Energy Probe, and currently an energy analyst and commentator. He is vice-president of Wind Concerns Ontario.

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

26 Sunday Jan 2014

Posted by ottawawindconcerns in Ottawa, Renewable energy, Wind power

≈ 4 Comments

Tags

cost-benefit analysis renewables, electricity bills Ontario, Green Energy Act, James Bradley Ontario, job loss Ontario, Minsitry of the Environment Ontario

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

There is audio for this story.
MP3 - click to open click to open MP3 version
or click the play button to listen now.
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.

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

16 Thursday Jan 2014

Posted by ottawawindconcerns in Ottawa, Renewable energy, Wind power

≈ 1 Comment

Tags

Bob Chiarelli, CBC Ottawa Morning, cost of electricity to business, cost of electricity to farms, cost of wind power Ontario, cost-benefit analysis renewables, cost-benefit analysis wind power, electricity bills Ontario, Ottawa electricity bills

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.

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