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Tag Archives: electricity rates Ontario

Wind power on TVOntario: problems, social costs

27 Friday Mar 2015

Posted by ottawawindconcerns in Uncategorized

≈ 3 Comments

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Canadian Wind Energy Association, cost benefit wind power, EDP, EDP Renewables, electricity bills Ontario, electricity rates Ontario, energy poverty, green energy, Green Energy Act, Ottawa wind concerns, The Agenda, TVOntario, wind farms, wind power

March 27, 2015

TVOntario’s public affairs program, The Agenda with Steve Paikin, dealt with the controversy over the implementation of Ontario’s push for power generation from wind this week, with an edition of the show, followed by the debut of new documentary film Big Wind.

Ottawa Wind Concerns’ chairperson (and Wind Concerns Ontario president) Jane Wilson was a guest for the entire Agenda program, which is available online at http://tvo.org/video/211902/wind-power-wind-problems.

The documentary is also online at TVOntario’s website, at http://tvo.org/video/211702/big-wind

There are opportunities to comment at both links.

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Green energy fleecing Ontario consumers

30 Thursday Oct 2014

Posted by ottawawindconcerns in Renewable energy, Wind power

≈ 1 Comment

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electricity rates Ontario, green energy, Green Energy Act, hydro bills Ontario, Ontario, Premier Kathleen Wynne, renewable energy, renewables, Ross McKitrick, Tom Adams, wind energy, wind farm, wind farm contracts, wind power

Green energy and wind farms fleecing Ontario consumers

New study explains why Ontario has gone from affordable electricity rates to among the highest in N America. Photo: Bloomberg
New study explains why Ontario has gone from affordable electricity rates to among the highest in N America. Photo: Bloomberg

Ross McKitrick and Tom Adams, The Financial Post, October 30, 2014

Adding renewable generating capacity triggers changes throughout the system that multiply costs for consumers

Ontario’s green energy transformation – initiated a decade ago under then-Premier Dalton McGuinty – is now hitting consumers. The Nov 1 increase for households is the next twist of that screw. As Ontario consumers know all too well, the province has gone from having affordable electricity to having some of the highest and fastest-increasing rates in Canada.

Last year, in a report for the Fraser Institute called “Environmental and Economic Consequences of Ontario’s Green Energy Act,” one of us (McKitrick) explained how the Green Energy Act, passed in 2009, yielded at best tiny environmental benefits that cost at least ten times more than conventional pollution control methods, and was directly harming growth by driving down rates of return in key sectors like manufacturing.

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But complex financial structures and a lack of official disclosure around large embedded costs have let supporters of the green energy act deny that green power is responsible for the price hikes. Green industry advocates, including the consulting firm Power Advisory and advocacy group Environmental Defense, have added up the direct payments to new renewable generators, and concluded that since those costs are relatively small, the impact of renewables on the total cost of power is likewise small.

However, such analyses ignore the indirect costs that arise from the way renewables interact with the rest of the power system. Adding renewable generating capacity triggers changes throughout the system that multiply costs for consumers through a mechanism called the Global Adjustment. Our new study, released Wednesday by the Fraser Institute, quantifies the impacts of different types of new generators on the Global Adjustment. The analysis pinpoints what causes the raw deal for consumers.

Here’s how it works: over the last decade, Ontario closed its coal-fired power plants and built a rapidly expanding portfolio of contracts with other generators including renewable energy companies producing power from hydro, wind, solar and biomass. These companies charge the Ontario Power Authority (OPA) higher-than-market-value prices for energy. To make up the difference, the OPA slaps an extra charge – called the Global Adjustment – on the electricity bills of Ontarians.

The Global Adjustment adds to the commodity portion of rates, which combined with charges for delivery, debt recovery, and regulatory factors constitute the overall rate. Elements of the Global Adjustment that are not disclosed include payments to generators to not generate, rates paid to historic non-utility generators, and costs for new hydro-electric developments.

Since 2007, the Global Adjustment has risen six cents per kilowatt-hour in inflation-adjusted terms, pushing up the commodity portion of bills by 50%. Not long ago, Ontario’s total industrial rate was less than six cents per kilowatt-hour. The rising Global Adjustment is by far the biggest driver of the resulting 21% increase in the overall average cost of power in the province over the period 2007-2013. The Global Adjustment’s upward path is a direct consequence of government intervention in the electricity market. Our analysis unpacking the costs of different types of generation shows that the consumer impact of new renewables substantially exceeds the direct payments to those generators by as much as 3 to 1. And renewables are a big part of the problem: Wind and solar systems provided less than 4% of Ontario’s power in 2013 but accounted for 20% of the commodity cost paid by Ontarians.

Getting to the bottom of the rate implications of adding renewables gained new urgency when Premier Wynne declared last month that the 2013 fleet of wind and solar will almost triple by 2021. This is an incredibly reckless decision. In his National Post column recently on the 2014 Ontario Economic Summit, co-chair Kevin Lynch, Vice-Chair of BMO Financial Group, stated bluntly “That Ontario has a serious growth problem is rather difficult to deny, or debate.”

What’s the solution? If the Province wants to contain electricity rate increases it needs to halt new hydroelectric, wind and solar projects. In order to reverse rate increases, the province should seek opportunities to terminate existing contracts between renewable energy companies and the OPA. Alas, as the Premier has indicated, that’s not where they’re headed.

Alternatives to costly new renewables include using some imported electricity from Quebec while Ontario refurbishes its nuclear power plants and maintaining 4 of 12 coal-fired power units at Lambton and Nanticoke that had been outfitted with advanced air pollution control equipment just prior to their closure, making them effectively as clean to operate as natural gas plants. Costly conservation programs encouraging consumers to use less electricity make particularly little sense these days in Ontario. Right now, Ontario is exporting vast amounts of electricity at prices that yield only pennies on the dollar, and also paying vast but undisclosed sums to generators to not generate.

Many European countries made costly commitments to renewable energy but are now winding them back. Germany is investing in new smog-free coal power generation. Environmentalists often suggested that following Europe is the way to go. Perhaps Ontario should consider following them now.

Ross McKitrick is a Professor of Economics at the University of Guelph and Senior Fellow of the Fraser Institute. Tom Adams is an independent energy consultant and advisor.

Lyman: Ontario’s electricity prices continue to rise

03 Monday Mar 2014

Posted by ottawawindconcerns in Ottawa, Renewable energy, Wind power

≈ 1 Comment

Tags

cost of renewable power Ontario, cost of wind power Ontario, electricity rates Ontario, Green Energy Act, IESO, Minister of Energy Ontario, Ontario government, Ontario power bills, Scott Luft

Here from energy economist Robert Lyman, an analysis of what’s going on with the price of electricity in Ontario… and what’s to come.

The Ontario Electricity Tragedy – The Numbers for 2013

The average resident of Ontario has a difficult time even understanding his or her electricity bill, let alone comprehending all the costs borne by the Independent Electricity System Operator (IESO), the Crown Corporation that manages provincial electricity supply and demand.

Fortunately for the rest of us, one man spends a lot of time monitoring IESO’s purchases and costs. His name is Scott Luft, and he reports his analysis on a blog entitled “Cold Air.” He takes publicly available data from IESO and translates it into something meaningful. Two tables recently published by Scott Luft tell us a great deal about what has happened to the “commodity cost” of electricity in Ontario since 2006, and especially about the breakdown of costs in 2013. The commodity cost is the charges that IESO pays for the actual power that it purchases from generators plus additional costs that are added on by order of the provincial government. It excludes the cost of electricity transmission and distribution and other special charges like HST.

Read the full article here.Ontario’s Electricity Tragedy by the Numbers (revised)

Parker Gallant on Ontario’s “smart grid”: what’s been achieved?

11 Wednesday Sep 2013

Posted by ottawawindconcerns in Health, Ottawa, Renewable energy, Wind power

≈ 1 Comment

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Bob Chiarelli, conservation power Ontario, cost-benefit analysis wind power, electricity rates Ontario, Ontario's smart grid, smart meters, wind power Ontario

Reprinted from Wind Concerns Ontario today:

On November 23, 2010, Ontario’s then Minister of Energy, Brad Duguid, issued a directive via an Order In Council to the Ontario Energy Board (OEB), with instructions on the “smart grid”:

“… it is desirable that the Province and the Ontario Energy Board move forward together with a plan to implement the advanced information exchange systems and equipment that together comprise the Smart Grid (“Smart Grid”), as defined in the amendments to the Electricity Act, 1998 made by the Green Energy and Green Economy Act, 2009…”

   The Duguid directive was a direct result of the Dwight Duncan directive of 2004 to the OEB instructing them to arrange the installation of “smart meters” throughout the province. 

   Co-incidentally (noted by Tom Adams), the Duguid directive is dated the same day as the e-mail exchange between Alicia Johnston (formerly a senior political staffer for Energy Minister Brad Duguid, later promoted to the Premier’s Office) and Ben Chin (a senior Ontario Power Authority executive).  That e-mail exchange contained Ms Johnston’s suggestion to engage Tyler Hamilton, a  contributor to Toronto Star, as an “expert” to counter the  Adams and Gallant duo who “are killing me” ; Chin agreed. Shortly after, Hamilton received a contract from the Independent Electricity System Operator (IESO) for a report on the smart grid.

    The fact is, the Independent Electricity System Operator or IESO had already started work on the “smart grid” as noted in the Financial Post article on July 6, 2010 — costs of development were estimated at $1.6 billion.  IESO had awarded a contract to IBM according to a January 15, 2007 press release; the purpose of the contract was defined as:  “the development and operation of Ontario’s Meter Data Management/Repository (MDM/R).”

A culture of conservation

The MDM/R is explained as: “a core part of Ontario’s Smart Metering Initiative to drive a culture of conservation, enabling the billing of Time-of-Use rates and encouraging consumers to shift more of their energy use to off-peak periods.” The initiative would apply to 4.7 million customers of local distribution companies, involving more than “100 million transactions every day.”

   More than six years later, that “Repository” has yet to generate reports on either shifting consumer habits or “imbedded generation.” (Embedded or distributed generation is usually a small scale production of power connected within the distribution network and not having direct access to the transmission network. These generators are typically located close to the electricity consumer.)

   But that hasn’t stopped IESO from awarding IBM yet another five-year contract for $68.5 million for the same “repository” with an option to extend the contract seven to ten years. With an estimated 100 million data feeds daily from “smart meters” one would expect that data to be accessible to determine what production comes from embedded generators such as rooftop or ground-mounted solar, to reinforce the “culture of conservation” and identify shifts in consumer habits. 

  Is this a missed opportunity for a cost/benefit analysis?

  On July 16 of this year, Energy Minister  Bob Chiarelli arranged a press release about conservation and claimed that “Ontario has saved billions of dollars through conservation, and we have a clear opportunity to do more. By investing in conservation before new generation, where cost-effective, we can save ratepayers money and give consumers new technology to track and control energy use.”

  What caught my eye in that press release were the endorsements: they were not from the usual climate change chorus such as Environmental Defence, CAPE,or the Ontario Clean Air Alliance. The last one was  “Sheldon Levy, President, Ryerson University.”  What would possess the President of Ryerson University to jump on this band wagon? 

  A month later, we have the answer:  on August 26, 2013  a news release announced that Ryerson University’s Centre for Urban Energy (CUE) “will build an innovative smart grid laboratory” with support from the province.  The press release doesn’t say how much the province is coughing up but does say “Building a smarter grid is an important part of the Ontario government’s plan to modernize the electricity system in the province and provide clean, reliable and affordable power to consumers.”  One can assume President levy’s endorsement of the July conservation announcement was sought by the Ministry as a condition of support for  the smart grid laboratory.  CUE was launched in 2010 with $7 million in grants from taxpayer-owned Hydro One, Toronto Hydro and the Ontario Power Authority.

  A  Globe and Mail article dated October 17, 2012, called “The tricky business of funding a university” carried the following comments about Ryerson’s CUE:

“Some schools have tiptoed the line successfully. Toronto’s Ryerson University launched its Centre for Urban Energy (CUE) two years ago using $7-million in contributions from three partners – Hydro One, Toronto Hydro and the Ontario Power Authority – and is now hoping to enlist new collaborators such as Siemens and General Electric.”

   It appears that President Levy knows exactly how to “tiptoe the line.” CUE’s intentions to collaborate with GE and Siemens are also interesting.  An announcement by Minister Chiarelli on July 2, 2013  indicates that the $50-million “Smart Grid” fund has already provided grants to GE, Siemens and IBM.

   Just asking: did the grants to GE and Siemens carry a proviso that they collaborate with CUE and did they both seek those grants?  It is not clear why IBM would need a grant as they have been awarded two long-term, multi-million dollar contracts from IESO.  The press release indicates the IBM grant was to create a centre “that will use and analyze smart meter data” which is what they are already supposed to be doing for IESO under the terms of the contract(s)!

Government grants to huge corporations

   So, we hand out grants to multi-billion dollar corporations such as GE, Siemens and IBM and  award them government contracts.  The first two entities are entrenched in the renewable energy business (turbines and blade manufacturing) so, to an extent they are dependent on commitments to more wind power by the Ministry of Energy. And, IBM won two contracts related to the data analysis of 4.7 million smart meters installed throughout the province.

  (I checked the Ontario Lobbyist Registry and could only find GE with registered lobbyists.)

   As noted above, the original estimate to create the smart grid was $1.6 billion, to be paid by Ontario’s ratepayers.  IESO stick-handled the first smart grid rate application through the OEB and ratepayers have paid for it since May 1, 2013.  It is included, but hidden, with the delivery costs charged by your local distribution company (LDC).  It is a charge of .79 cents per month and referred to as a “Smart Metering Entity charge.”  Your LDC will collect this for the next five and a half years.  Doing the math on this rate hike indicates that it will cover $245 million of that $1.6 billion —so be prepared for further “hidden” increases as spending is ramped up. 

   As noted, the MDM/R definition it is really all about conservation and enabling those 72 LDCs to bill on a Time-of-Use basis.  Those “smart meters” and “smart grid” will cost ratepayers $4 billion and will not produce one kilowatt of new power.  I suspect that Environmental Commissioner Gord Miller doesn’t consider the above costs or the costs of the smart meters, when he presents his annual report to the Minister of the Environment.  The Commissioner’s cost/benefit study uses only the annual spending of the Ontario Power Authority (media advertising, free fridge pickup, coupons to purchase CFL bulbs, etc.) which paints the cost of “conservation” as only three cents per kilowatt hour. 

   In addition,  a posting on Scott Luft’s website indicates that time-of use pricing has shifted consumers’ energy use to what used to be “off-peak” periods (noted as an objective of the MDT/R). As a result, those periods have now become “peak” demand periods for ordinary consumers, beginning at 7 PM, rather than mid-day.  Ontario’s ratepayers are now trained to eat our supper and wash our clothes later, not because we want to, but because electricity has become so costly we only use it during the off-peak hours!

   Perhaps the Dalton McGuinty government should have simply doubled the price of electricity when they came to power in 2003 and we would have immediately started to conserve.   Think of the money we could have saved, the countryside we would not have despoiled with industrial wind turbines, the harm to health not caused, the birds and bats not killed, and the property values that would not have fallen!

   Too bad politicians don’t grasp the simple law of supply and demand.

 

Parker Gallant.

September 11, 2013

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

Ottawa economist on 10 years of power mismanagement in Ontario

23 Tuesday Jul 2013

Posted by ottawawindconcerns in Health, Ottawa, Renewable energy, Wind power

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Tags

Bob Chiarelli, Bob Lyman, cost benefit wind power, cost-benefit renewable power, Dalton McGuinty, electricity rates Ontario, Feed In Tariff Ontario, Green Energy Act, Kathleen Wynne, Ontario by-elections, Ontario Ministry of Energy, Ontario Power Authority, Ontario's electricity system, Ottawa wind concerns, Parker Gallant, power bills Ontario, Robert Lyman, Wind Concerns Ontario

You’ve read Bob Lyman, an economist specializing in energy issues, on these pages before.

In his latest work, he has written an overview of the last 10 years of energy policy as it relates to electricity in Ontario, and come up with the very worrying conclusion: the whole thing has been grossly mismanaged.

The question now is, can Ontario ever get out of this hole? That’s tough when Ontario keeps approving big, expensive wind power projects on the order of one a week this summer, despite not having a current long-term energy plan.

Here is Bob Lyman’s latest:

Ten Years of Liberal Mismanagement of Ontario’s Electricity System

A Layperson’s Summary

On July 16, 2013, Parker Gallant, a retired banker who for about six years has written about Ontario electricity policies, wrote an article to mark the forthcoming tenth anniversary of the Liberal Party’s tenure as government of Ontario. Mr. Gallant’s article can be found at the following link:

http://www.freewco.blogspot.ca/2013/07/ontario-liberals-10-years-of.html

This article is of great importance for Ontario residents who want to understand what has been happening to electricity supply, demand and prices over the past decade and, perhaps more importantly, how they should weigh these developments as they contemplate forthcoming elections in the province. Shortly, there will be five by-elections in different parts of Ontario that may swing the balance of power in the legislature. It is also likely that there will be a general election in Ontario within the next two years.

Voters need to understand what the fuss is all about and how it affects them. Unfortunately, Mr. Gallant’s article, as wonderfully insightful as it is, might be difficult to understand for the average citizen who does not follow electricity matters on a regular basis. The objective of this note is to offer a somewhat simplified version of the story people should know. …

Read the whole document here: Ten Years of Liberal Mismanagement of Ontario’s Electricity System

Upcoming topics: what does the situation at Chatham-Kent airport (where 8 turbines have been order removed) really mean?

Please contact us at ottawawindconcerns@gmail.com

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National Post: Ontario paying a high price

11 Thursday Apr 2013

Posted by ottawawindconcerns in Health, Ottawa, Renewable energy, Wind power

≈ 1 Comment

Tags

cost benefit wind power, cost-benefit renewable power, electricity rates Ontario, Fraser Institute, Green Energy Act, health effects wind turbines, high cost electricity Ontario, national Post, Ontario Liberal government, power bills Ontario, Scott Sinsin, wind power projects

National Post columnist Scott Stinson weighs in on Ontario’s power situation today, saying the province is paying a very high price for “green energy.”

Labelling the government’s handling of this issue as “spectacular mishandling” and an example of poor governance (we would venture to say there’s more than a dollop of misfeasance in there, too), Stinson says government actions have had a “punitive” effect on taxpayers.

And, it’s all for nothing. The Green Energy Act was created to solve a problem that didn’t exist. Ontario already had lots of “clean” power in the form of hydro and nuclear, and we did not need to create a subsidy system that had the effect of shovelling ratepayer money into the pockets of huge corporations, many of them foreign-owned.

Read the article here and pass it along to your friends and family. It’s time the voters of this province got out of the “green” fog and checked their wallets.

http://fullcomment.nationalpost.com/2013/04/11/ontario-green-energy-act/

Email us at ottawawindconcerns@gmail.com

and be sure to check for news and postings through the day at http://www.windconcernsontario.ca

 

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