Tag Archives: electricity bills Ontario

Wynne government should cancel wind power contracts for hydro bill relief, says WCO

21 Monday Nov 2016

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NEWS RELEASE

November 21, 2016 

“Poverty is getting worse in Ontario,” says Wind Concerns Ontario president

 

Wind Concerns Ontario welcomes the acknowledgement by Premier Kathleen Wynne of financial hardship imposed by her government’s energy policies, and has sent six recommendations for action that will provide immediate relief.

“We know that energy poverty in Ontario is real and worsening under this government,” says WCO president Jane Wilson. “Hundreds of thousands of people are having difficulty paying their electricity bills, and many are having to choose between ‘heat and eat.’ Meanwhile, corporate power developers are getting paid huge profits in Ontario – this has to change, now.”

Wind Concerns Ontario sent the Premier a list of recommendations: 

  1. Immediately cancel LRP II renewable power program. Currently “suspended,” its target was to acquire 1,000 megawatts (MW) of power, even though the government says we have a “robust” supply of power for the future. The cost of this new capacity would go straight to Ontario’s electricity bills
  2. Cancel the five wind power contracts awarded under LRP I for 299 MW. This action will save ratepayers about $65 million annually and $1.3 billion over 20 years. Cancellation costs will amount to a small fraction of the annual cost, probably on the order of about $2 million, at most. In addition, cancelling approved but not yet built wind power projects, and the new FIT 5.0 program will also save money. Together, these cancellations can save ratepayers from future rate increases of nearly $4 per month.
  3. Cancel “conservation” spending of $400 million annually. This action would have an immediate effect on ratepayers’ bills, reducing them by $5.50 per month or about $70 a year. Ontario’s ratepayers have already reduced their consumption from 157 TWh in 2005 to 137 TWh in 2015, for a significant 12.7% decrease.
  4. Allocate the Ontario Electricity Support Program (OESP) to the Ministry of Community and Social Services. The OESP is essentially a social assistance program and it is questionable as to whether ratepayers should bear the burden of its costs. With an estimated annual cost of $200 million, the effect of this would be an immediate savings of about $4 per month on ratepayers’ bills, and an annual savings of $50. We recognize, however, that the move would impact the budgetary shortfall by a like amount so we recommend the following action.
  5. Levy a tax on wind and solar power generation on a per-megawatt basis starting at $10 per/MWh. This would result in raising sufficient revenues to offset the OESP costs. The effective rate could be held at that level or increased in the event the OESP costs exceed the forecast $200 million per annum. The Auditor General previously reported the award value per MWh of the 20-year contracts to wind and solar power developers exceeded those in other jurisdictions by a considerable margin. The tax would serve as a recognition of those excessive margins. (Note: the wind power contracts also contain cost of living increases of up to 20% over the term of the contracts.)
  6. Immediately reduce the Time of Use (TOU) off-peak rate. We recommend an immediate reduction in the TOU off-peak rate from 8.7 cents/kWh to 7.4 cents/kWh to encourage the shift of power consumption from peak to off-peak time in order to flatten daily demand.

“Poverty is a major factor in population health,” says Wilson, a Registered Nurse. “It is time Ontario takes action to help people now, and not cause further hardship for Ontario families.”

Wind Concerns Ontario is a coalition of community groups, individuals and families concerned about the impact of industrial-scale wind power development on the economy, on the natural environment, and on human health in Ontario.

http://www.windconcernsontario.ca

OTTAWA WIND CONCERNS NOTE: The contract for the “Nation Rise” wind power project in North Stormont, just south-east of Ottawa, will cost Ontario residents $430 million over its 20-year contract, for intermittent wind power we don’t need. Cancelling the power project, slated to be 100 megawatts and over 30 industrial-scale wind turbines, would cost no more than $600,000. Other projects in our area would be the much-contested Amherst Island project which will endanger birds and other wildlife species, and the White Pines project in Prince Edward County, also a danger to migratory birds and other wildlife. Cancelling these projects which are not yet built will save millions.

Power developer to hold open house Tuesday on North Stormont wind farm

22 Saturday Oct 2016

Posted by in Renewable energy, Uncategorized, Wind power

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EDP wind turbine and home at South Branch project, Brinston, Ontario. Photo by Ray Pilon.

EDP wind turbine and home at South Branch project, Brinston, Ontario. Photo by Ray Pilon.

October 21, 2016

Portugal-based power developer EDP Renewables is holding an Open House for its Nation Rise wind power project on Tuesday, October 25, from 4-8 PM in Finch Ontario, at the Finch arena.

The 100-megawatt power project is located completely in the Township of North Stormont; it was one of five to receive a contract from the Independent Electricity System Operator (IESO) earlier this year, and one of three projects to win a contract despite being proposed in an unwilling host community.

The contract is worth $436 million over 20 years.

In September, the IESO announced that Ontario has a surplus of power and that the new contract process scheduled for 2017 is now suspended. The IESO did not announce plans to cancel any of the contracts for more unneeded wind power announced a few months previous, despite IESO representative statements that the contracts are contributing to Ontario’s electricity bills.

Citizens of the area have formed a community group Concerned Citizens of North Stormont, and vowed to fight approval of the project, including legal action in future if necessary.

South Dundas councillors and staff, spokesmen from EDP Renewables and local residents chat about the proposed South Branch Wind Farm II project during an open house Aug. 5, 2015 at Matilda Hall in Dixons Corners. (Cornwall Newswatch/Bill Kingston)

People gather at EDP Renewables open house in August, 2015

Related news story.

 

More action needed on hydro bills, Ontario mayors tell Energy Minister

06 Thursday Oct 2016

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The Mayor of North Frontenac has written to Energy Minister Glenn Thibeault on behalf of all the 115 municipalities demanding change to the Large Renewable Procurement process. While relieved the next round of bids is “suspended,” he says, the municipalities say more can be done to stop the dramatic rise of Ontario electricity bills.

NorthFrontenac

October 5, 2016

Mayors across Ontario who united together as  a result of a resolution being supported to have municipal support mandatory for industrial wind turbines are relieved that procurement of future wind power has been cancelled for now. The Mayors still feel however that the government needs to take very aggressive actions to address the ongoing crisis caused by high electricity costs in this province. Taking steps to not add $2.45 per month in 2020 does not address the real hardship being felt by our residents now.  It is also not clear that the other measures announced by the government will even offset the ongoing increases in hydro rates that can be expected in the short term unless additional changes are made.

It was important that the Minster of Energy’s statement confirmed that the province has a “robust” supply of electricity and the procurement process could be cancelled without increasing greenhouse gas emissions.  This provides room for more aggressive actions that will address increasing costs. Our tracking of wind turbine contracts shows that there are still many wind turbine projects in the pipeline that will add at least another $7.9 billion to electricity generating costs.  This is equivalent to another $82 per annum for each Ontario electricity user. Seven of these projects are under construction but will not be connected to the grid until sometime this fall or in 2017.  Another five have not been issued ‘Notices to Proceed’ as they are, or have been until recently, involved in Environmental Review Tribunal proceedings or other legal appeals of Renewable Energy Approvals. The final six projects are in the pre-MOECC submission stage.  These include the five contracts issued in early 2016 plus one outstanding project from earlier FIT offers.

In all of these cases, the IESO has the option of terminating the agreement for any reason with very limited cost liabilities relative to the 20 year commitment to electricity that is not required.  We respectively ask that all industrial and solar wind projects be cancelled to avoid ongoing costs to our residents.

Ron Higgins

Mayor, North Frontenac

Councillor, County of Frontenac

Phone 613-884-9736

Email ron.higgins@xplornet.com

Twitter @HigginsRon

Facebook

 

See the letter sent to the Energy Minister, here. lettertoenergyminister-oct52016

 

Mayor Higgins (Photo CBC)
Mayor Higgins (Photo CBC)

Ontario suspends large renewable power project bid process

27 Tuesday Sep 2016

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Bids were to be accepted beginning early in 2017. But Ontario now says it has enough power and wants to take steps to reduce electricity bills, so it doesn’t need the new renewable power capacity.

September 27, 2016

Moments ago, the Wynne government announced it is suspending its controversial Large Renewable Procurement program for sources of power such as wind and solar.

“Ontario will immediately suspend the second round of its Large Renewable Procurement (LRP II) process and the Energy-from-Waste Standard Offer Program, halting procurement of over 1,000 megawatts (MW) of solar, wind, hydroelectric, bioenergy and energy from waste projects. …

On September 1, 2016, the Independent Electricity System Operator (IESO) provided the Minister of Energy with the Ontario Planning Outlook, an independent report analyzing a variety of planning scenarios for the future of Ontario’s energy system. The IESO has advised that Ontario will benefit from a robust supply of electricity over the coming decade to meet projected demand.”

Wind Concerns Ontario (and two Auditors General for Ontario) has been saying for years that a cost-benefit analysis of the renewable energy program was never done, and should have been.

“Now, the impacts of this program are clear,” says President Jane Wilson.”We have unsustainable and punishing rises in electricity bills for the people of Ontario, with a corresponding rise in rates of energy poverty, while there is no evidence of any environmental benefit. In fact, there are widespread concerns about the damage being done to the environment from this high-impact form of power generation.”

Wind Concerns Ontario says that in addition to suspending the Large Renewable Procurement program, contracts for power projects not yet under construction need to be cancelled immediately.

“The government admits it has adequate power,” Wilson says. “There is no need to continue this assault on Ontario citizens, on our economy, and on the natural environment for little or no benefit.”

Billion-dollar bungle: Ontario’s green energy disaster

03 Saturday Sep 2016

Posted by in Ottawa, Renewable energy, Wind power

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Billion-dollar burden: how Ontario bungled green energy

Wind turbines near SS Marie: power supply saturated by Ontario buying more wind. (National Post photo)
Wind turbines near SS Marie: power supply saturated but Ontario buying more wind. (National Post photo)

Worthy of a repost, from the National Post, this opinion from a renewable energy insider.

September 2, 2016

Ontario set an all-time peak electricity demand of 27,005 megawatts (MW) 10 years ago this summer. At the time, rising demand and plans to retire its coal-fired power plants dominated provincial energy policy. What followed was optimism for a new energy policy, focused on the ambitious procurement of large wind and solar installations. I felt great pride in helping to lead an industry that would make Ontario’s power system clean, responsive and cutting edge.

What a difference a decade makes. Intrusive policy and poor implementation are largely responsible for the energy market debacle Ontarians face today. But there is no excuse now for buying more mega-projects when our power supply is saturated and hydro bills are skyrocketing.

Coal-fired power generation effectively disappeared after 2010, by which time Ontario’s electricity demand had already started to plummet. Demand has fallen 13 per cent in the past 10 years, including consecutive reductions in each of the past five years. In 2016, Ontario will consume less electricity than in 1997.

Peak demand exceeded 23,000 MW only one day this summer, despite parts of the province seeing 35 days with temperatures above 30 C. Yet our installed capacity approaches 40,000 MW. The system will have reserves above extreme summer peaks well into the 2020s. The Independent Electricity System Operator (IESO) reinforced this point recently when it confirmed “Ontario will have sufficient supply for the next several years.”

Against this troubling background, the Ontario government is procuring an additional 1,300 MW of large wind and solar generation under the Large Renewable Procurement (LRP) program. This decision is indefensible. It makes the frequency of negative pricing (paying our U.S. neighbours to take Ontario energy during periods of low demand) and curtailment (paying wind developers for energy production even when the grid can’t use the power) even worse. These problems have become billion-dollar burdens for Ontario electricity customers.

Sweet contracts, painful electricity bills

Offering sweet contracts to large renewable energy developers while demand stagnates has helped push hydro bills higher. Electricity prices have increased by seven per cent a year since 2009. Costs have risen faster than Ontario’s inflation rate in each of the past several years. The province’s electricity rates are increasing faster than any other jurisdiction in North America.

It’s clear that change must begin with the renewable industry, since our industry alone benefits from the continued overprocurement of electricity. The fact is large wind and solar developers have been pampered by Queen’s Park for far too long. Although solar installation costs dropped 70 per cent in the past decade, the government froze prices for years at a time. When permitting delays enabled projects to be built as much as five years after contracts were awarded, multi-millionaires were created overnight.

Today, with no logical reason to build more wind and solar mega-projects in Ontario, renewable developers must confront the economic damage they are doing to their families, friends and neighbours, and to the next generation of citizens who will bear the brunt of this green corporate welfare.

Renewable energy companies must confront the economic damage they are doing.

We need to make four changes. First, Ontarians must demand a return to basic electricity policy principles: safety, reliability and cost effectiveness. Second, the government should revisit the IESO’s legal obligations associated with the current LRP process and exit this procurement process without paying the ransoms that characterized Ontario’s gas plant debacles. Third, the IESO should restrict renewable procurement to the smaller rooftop and distributed energy projects that actually benefit customers. Fourth, Ontario renewable energy firms must learn to export their pioneering expertise and target new domestic and international markets.

The global renewable energy revolution has just started. Solar energy is increasingly the cleanest, cheapest and most environmentally sustainable option. The advent of battery storage, smart grids and the Internet of Things will catalyze innovative economies that embrace change. Renewables have a bright future in this world, but we need to regain control of Ontario’s failing electricity policies — and do it soon — to ensure we seize the energy opportunities of the 21st century.

National Post

Jon Kieran is a Toronto-based renewable energy consultant. He is  a member of the Canadian Solar Industries Association’s board of directors. He declines LRP work from clients.

Ontario’s green energy fiasco about to get worse: Globe Editorial

01 Sunday May 2016

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Globe and Mail EDITORIAL, April 29, 2016

Late last year, Ontario’s Auditor-General put out a report detailing the extent of the provincial government’s mismanagement of the electricity system. According to Bonnie Lysyk, thanks to a misguided government policy of artificially pumping up the cost of producing power in the province, Ontarians had overpaid for electricity to the tune of $37-billion between 2006 and 2014, and will continue to be overcharged by another $133-billion by 2032.

The scale of the waste is so large as to be almost incomprehensible, which may explain why Ms. Lysyk’s report was a one-day news wonder when it landed last December. Once the count gets into the hundreds of billions, the mind goes numb. If the province announced construction of the Burning Money Biomass Plant, fuelled by bales of five and 10-dollar bills, it probably wouldn’t be capable of destroying $170-billion.

The size of the disaster in the province’s electricity system is hard to get your head around. But voters, consumers, businesses and especially the Liberal government should be rereading Ms. Lysyk’s report. Because a document leaked to The Globe and Mail this week suggests that the Liberals, who a decade ago broke the electricity system through a fatal combination of good intentions and a willful disregard of both expertise and experience, may be preparing to repeat the exercise with their next greenhouse gas reduction plan.

The thing is, Ontario needs a greenhouse gas reduction strategy. So does every province, and so does the federal government. To meet our international commitments, and to bend the curve on global warming, those carbon-reduction goals have to be ambitious. Ontario’s proposed Climate Change Mitigation and Low Carbon Economy Act aims to reduce the province’s 1990 emissions by 15 per cent by 2020, 37 per cent by 2030 and 80 per cent by 2050. The province is committing itself to substantial carbon reduction in the next decade, and a near-zero carbon economy in a generation.

Those are not impossible ideals. They’re doable – using the right tools. Dramatically reducing carbon emissions is not a crazy idea, but the way Ontario is proposing to get to a low-carbon economy almost certainly is.

Ontario went about it all wrong

A decade ago, the government of Ontario started driving up electricity costs with a simple objective in mind: It wanted to reduce greenhouse gas emissions from the production of electricity. This was the right objective. But the way it went about it was all wrong. Instead of encouraging the electricity sector to be as efficient as possible, the government essentially ordered it to become costly, inefficient and irrational. Some of this was motivated by fantasies of industrial policy – look, Ma, we’re subsidizing the Green Jobs Of the Future! – and some of it was driven by an insistence on ignoring basic economic advice, much of it coming from the government’s own experts.

The result is that the cost of generating electricity in Ontario has exploded, even as power costs plummeted elsewhere. Between 2004 and 2014, power generation costs in Ontario increased by 74 per cent, according to the auditor. This benefits no one. The higher prices don’t come from carbon taxes; they come from higher electricity production costs. And that imposes a heavy cost on the economy.

However, because prices were rising, Ontarians started using less energy. Power use dropped by 7 per cent between 2006 and 2014. But at the same time, thanks to subsidies to encourage greater power production from green sources, the province’s generation capacity grew by 19 per cent. As a result, the province is now a major exporter of electricity – sold at prices far below the cost of production. The more power the province exports, the more taxpayers and ratepayers lose.

Ontario could have chosen a different route. Instead of politicians completely remaking the electricity sector on a whim, introducing inefficiencies by deciding what power technologies to back and how much to subsidize them, Ontario could have done the opposite. It could have set a carbon-reduction goal, imposed carbon taxes on carbon-generating fuels – and left it to producers and consumers to figure out how to most efficiently respond by reducing their own costs and emissions. It should have taxed dirty power and let the market figure out the cheapest way to get to lower emissions levels.

More enthusiasm than knowledge

Nearly a decade later, this week’s leaked document on its upcoming greenhouse-gas strategy suggests Kathleen Wynne’s government has not learned from her predecessor Dalton McGuinty’s mistakes. Glen Murray, a minister with more enthusiasm than knowledge, is in charge of the environmental file; last time around, George Smitherman was the designated enthusiast.

Ontarians should be worried. …

Read the full story here

Missing the point of Earth Hour in Ontario

18 Friday Mar 2016

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Earth Hour: cruel irony in Ontario where government policy is actually causing poverty and hardship
Earth Hour: cruel irony in Ontario where government policy is actually causing poverty and hardship

Earth Hour 2016 is tomorrow, March 19, 2016 from 8.30 PM to 9.30 PM when all the world is encouraged to turn off their lights for an hour of symbolic action. Specifically the goal is: “Earth Hour aims to encourage an interconnected global community to share the opportunities and challenges of creating a sustainable world.”

This is an admirable objective – everyone wants to do their best for the environment – but the truth is, much depends on how sustainability is positioned by politicians.

In Ontario the OEB (Ontario Energy Board) noted in a 45 page report dated December 22, 2014:  “Using LIM1. as a measuring tool, and relying on Statistics Canada household data, Ontario has 713,300 low-income households. The OESP is estimated to reach 571,000. This estimate recognizes that not all low-income households in the province pay their electricity bills directly (i.e., utilities included in rent).” That report led to the introduction of the OESP or Ontario Electricity Support Program start-up on January 1, 2016, expected to cost between $175 and $225 million, paid for by those 3.9 million households who don’t qualify for the OESP.

So did the Ontario government simply not understand creation of the Green Energy & Green Economy Act (GEA) would result in so many low-income households? It is now apparent the advent of the GEA played a major role, by raising the cost of the production of electricity by well over 70% since its enactment. The push for renewables in the form of industrial wind turbines, solar panels, etc., which require back-up from gas plants due to the intermittent and unreliable nature of renewables, added billions in costs. The transmission builds to bring wind and solar power to the grid added billions more and, coupled with the other billions spent trying to convince us to conserve, added even more costs.

The addition of almost 10,000 MW (so far) of renewable generation at prices over market impacted disposable income for all Ontarians living at, or close to, minimum wage and for many others living on fixed incomes. The other result of adding renewable power is that Ontario is now in the position of having surplus power generated at the wrong time of the year and night when demand is low. This surplus must be either sold off (exported), curtailed (wind and solar) or steamed-off (nuclear). Additionally, ratepayers and taxpayers are charged for the ideasNB: related to conservation such as paying for grants for electric vehicles and their charging stations.

March 13, 2016 is an example: it was a day when the sun shone and the wind was blowing. Ontario demand was low reaching only 320,000 megawatt hours (MWh) while generation, coupled with curtailed wind, idling gas plants, spilled hydro and even curtailed solar along with all of the distribution connected (Dx) power (principally wind and solar) was about 463,000 Mwh2.. Ontario’s ratepayers needed only 68% of that 463,000 MWh, so the other 32% was either exported or curtailed (to avoid blackouts) while being billed to Ontario ratepayers. Production costs (without the other items tossed into the “Global Adjustment pot) were over $100/per MWh, meaning the 143,000 MWh surplus picked ratepayers’ pockets for more than $14 million or $2.85 per ratepayer for just one day. (Bob Chiarelli, our Minister of Energy, would probably say that was just the cost of a “Timmies”!)

In 2015, Glen Murray, Ontario’s Minister of the Environment and Climate Change, said Earth Hour “Every passing year it becomes more infectious. It’s actually really doing what it intended to do, which is to get into the popular culture.”

Minister Murray should note we have turned off the lights, not because we want to but because we can’t afford to “keep them on.”

It appears to this Ontario ratepayer that what is really “infectious” is the Ontario government’s ability to create “energy poverty” for hundreds of thousands of Ontario’s households and, instead of promoting sustainability, it has instead driven many to a situation where they now have to decide whether to “heat or eat”.

Hardly the lofty goal that Earth Hour aspires to, and clearly not what well-meaning citizens wanted to happen.

©Parker Gallant,

March 17, 2016

NB: Note to Minister’s Chiarelli and Duguid: If you can afford a $100,000 Tesla automobile you can afford a charging station!

  1. LIM stands for “Low-Income Measure” per Statistics Canada.
  2. Big hat tip to Scott Luft for his great “daily reports” which go well beyond what IESO (Independent Electricity System Operator) provide.

Re-posted from Wind Concerns Ontario

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

24 Ontario communities say NO new wind power contracts

02 Wednesday Mar 2016

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Ontario municipalities demanding no new wind power contracts now 24

wind contract banner

Huron-Kinloss and West Lincoln have joined 22 other Ontario municipalities supporting the Wainfleet Resolution; the total is now 24.

The resolution refers to the Auditor General’s 2015 report in which Bonnie Lysyk detailed the amount of money Ontario citizens have paid for renewable power in a program that never had  cost-benefit analysis. Ontarians paid twice as much for wind power as they should have, she said, with the result that Ontario consumers have seen their electricity bills skyrocket. Worse, she said, is the fact that Ontario is in a situation of surplus power generation, which means regular losses as power generators are paid to “constrain” production, and surplus power is sold off at bargain-basement process on the electricity market.

The Wainfleet Resolution asks that the province not give out any new wind power contracts; the IESO accepted bids for more than 2,000 megawatts of new wind power generation last year, and planned to let contracts for 300 megawatts of new projects, despite the surplus.

While Ontario has over 400 municipalities, only about 100 are rural/small-town communities vulnerable to wind power development. Wind power projects have also been proposed in Northern Ontario where there are no organized municipalities but “unorganized territories.”

(Re-posted from Wind Concerns Ontario)

How Ontario could have saved billions: by doing nothing with electricity

27 Saturday Feb 2016

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Wind turbines pockmark Ontario’s landscape, says Kelly McParland, producing excess power at marked-up prices, using heavy subsidies

“They fell for all that “green energy” stuff, can you believe it?”

Photo: Canadian Press

National Post, February 25, 2016

Ontario premiers have a weak spot for pithy little slogans they can use to brush away troublesome matters.

“There’s never a wrong time to do the right thing,” Dalton McGuinty loved to say whenever stuck for an explanation for some horrific mistake. Why did his government spend $1.2 billion to not build two power plants after repeatedly insisting the projects would go ahead come hell or high water? Well, “there’s never the wrong time to do the right thing.” Smile. Next question.

His successor, Kathleen Wynne, has adopted a catchphrase of her own. “The cost of doing nothing is much, much higher than the cost of going forward ,” she’ll say when confronted with questions about some expenditure that has heads exploding across the province.

She deployed it Wednesday while seeking to justify the new tax on Ontarians that will accompany her cap and trade plan. Gasoline prices are expected to rise 4.3 cents a litre, while natural gas bills will increase about $5 a month.

Just in case the increases annoy Ontarians, Wynne came prepared: “The cost of doing nothing is much, much higher than the cost of going forward and reducing greenhouse-gas emissions,” she declared.

That’s debatable, and it raised an obvious question: Wynne’s Liberals have been in power since 2003. If the province has been “doing nothing,” who, precisely is to blame? And why are motorists and homeowners expected to pay the price now?

The reality is that the Liberals have been doing a great deal — much of it expensive, wasteful, ill-considered and counterproductive. Windmills now pockmark vast stretches of the countryside, producing excess power at marked-up prices supported by heavy subsidies. An Ontario Chamber of Commerce report indicated demand for power has fallen 8% since the Liberals came to power, due to a stagnating economy, but generation has increased 13%, producing a surplus of unneeded electricity. Twenty percent of businesses say the soaring costs could force them to shut down within five years. Rates rose in October, and again in January.

Read the full article here.

Billions spent on electricity projects In Ontario with no oversight: CD Howe Institute

24 Wednesday Feb 2016

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Set Limits on Queen’s Park’s Power over Electricity Market

 

“It is remarkable that the expenditure of billions of dollars can be made with the stroke of a pen with virtually no oversight.”

February 24, 2016 – The government of Ontario should move away from controlling electricity planning, according to a new C.D. Howe Institute report. In “Learning from Mistakes: Improving Governance in the Ontario Electricity Sector,” author George Vegh argues that the government should face more checks and balances when spending electricity ratepayer money. The government should only set broad policy objectives and not make choices on which technologies and which suppliers should receive government contracts.

Over the last 10 years, the government has directed the expenditure of billions of dollars of public money on electricity projects with virtually no oversight or checks and balances. During this time, Ontario consumers have seen a large increase in electricity prices, with more to come.

“It is remarkable that the expenditure of billions of dollars can be made with the stroke of a pen with virtually no oversight,” commented Vegh.

In response to concerns about the rising cost of electricity and poor governance, most notably from the Auditor General’s report last December, the Ontario government has touted its proposed Bill 135 as the solution. However, far from solving the concerns about electricity-sector governance, the proposed Bill entrenches and expands the status quo and provides no role for oversight of government electricity directives.

The author proposes the following recommendations to improve the system:

  1. Move away from a central planning model towards a locally based supply obligation that aligns accountability with responsibility.
  2. Even if the government is to maintain its central role in setting outcomes, it can reduce its role in picking winners and losers. This requires increased reliance on market mechanisms, including requests for proposals, and capacity markets to meet operational and capacity needs based on demonstrable system requirements.

Vegh concluded: “Rather than extend and entrench the problems, Bill 135 should provide the opportunity to correct them.”

Click here for the full report.

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada’s most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

For more information contact: George Vegh, Counsel, McCarthy Tétrault, and Adjunct Professor, University of Toronto School of Public Policy and Governance, University of Toronto Law School and Osgoode Hall Law School; 416-865-1904, or email: kmurphy@cdhowe.org.