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Tag Archives: Feed In Tariff program

How to get those power bills down: Parker Gallant to Bob Chiarelli

02 Thursday Apr 2015

Posted by ottawawindconcerns in Renewable energy, Wind power

≈ 3 Comments

Tags

Bob Chiarelli, electricity bills Ontario, electricity prices, Energy Minister Bob Chiarelli, energy poverty, Feed In Tariff program, HOEP, Ontario, Ontario deficit, Ontario economy, Ontario hydro bills, Parker Gallant, wind farms, wind power, wind power contracts

Financial Post, 2015

Parker Gallant, the former banker who several years ago launched FP Comment’s prophetic Ontario’s Power Trip campaign against the province’s expensive and pointless electricity industry reforms, has some new advice for the government. As the price of electricity soars, Ontario industries and consumers are being hammered by rate increases that seem never-ending. In an open letter today to Energy Minister Bob Chiarelli, Mr. Gallant lists a few easy initiatives the government could undertake to stop some of the madness and save consumers billions of dollars.  Terence Corcoran

LETTER FROM PARKER GALLANT

April 1, 2015

The Honourable Bob Chiarelli, Minister of Energy,

Legislative Building, Queen’s Park, Toronto ON, M7A 1A1

Dear Minister Chiarelli:

Re: Dropping Ontario’s Price for Electricity

I have noted the difficulty you have experienced over the past several months trying to convince the media and the general population of Ontario they should simply bite the bullet and accept the fact that electricity prices will continue their above inflation climb. Having studied the situation I believe I have come up with some suggestions that would allow you to move things in the opposite direction.

First I suspect that Premier Wynne and Finance Minister Sousa exerted considerable pressure on you to come up with a scheme to help out the 500,000 to 700,000 “low-income” households in the province experiencing what is generally referred to as “energy poverty.” While the plan recommended came from the Ontario Energy Board and was altered somewhat by yourself I believe I have a better plan.

More on that later in this letter.

I also suspect that the Premier and Finance Minister told you unequivocally the OCEB was finished at the end of the year as they wish to wave better deficit numbers in front of those pesky credit rating agencies. The $1.2 billion that went to keep electricity rates down, a little bit, would no longer be available and they made that clear to you.

While you did your best to dance around the issue associated with the upcoming big jump in our electricity bills I could see the criticism was troublesome for you. As a result I believe my suggestions on what you should do will put some spring back in your step.

Here they are:

Recommendations to reduce future ratepayer bills

Conservation spending for the period 2015 to 2020 is forecast and budgeted at $1,835 million so drop it and that will provide close to $400 million annually that can go to reduce electricity prices.

Next, cancel the acquisition of the 500 MW of renewable wind and solar that you instructed IESO to acquire. That will save an estimated $200 million annually in future costs that would increase our rates.

I note there are 510 MW of wind generation contracts awarded that have not yet obtained their REA from the MoE and I recommend you also cancel those. I estimate that would provide relief from future increases of another $200 million per annum. I would suspect the costs of exiting these will be nominal.

Needless to say the cancellation of the above 1,010 MW of renewable energy will reduce future power surpluses meaning the HOEP might show some upward movement. That would allow all the dispatched wind and solar, spilled hydro, steamed off nuclear and idled gas to be sold via the market place to our neighbours. I estimate we could sell anywhere from 10/15 TWh annually at a price of somewhere around $40 million per TWh which would earn revenue of $400/600 million annually.

I would also cancel the new OESP plan which is estimated to cost $200 million (including a new administrative bureaucracy costing $20 million) annually.

Now if you do the math on the above the amount of money your portfolio would save in the future and also generate new income it totals $1.7 billion.

You could than use some of that $1.7 billion to both decrease electricity prices and provide relief for those suffering from “energy poverty.”

My recommendations on those two issues follow:

Recommendations to relieve “energy poverty”

First you should instruct the OEB that the .12% allocated to the LEAP program be increased immediately (providing you have completed the other recommendations) to 1% which will immediately make over $30 million available to the social agencies for relief purposes. You should also increase the maximums per household to $1,000 and instruct the OEB that the Return on Equity and/or Return on Assets for the LDC are to reflect a reduction to accommodate this.

Second you should drop the TOU off-peak rate from 7.7 cents per kWh to 5 cents per kWh. The cost of this would be about $350 million. It would also benefit many of those “low-income” households meaning they would no longer suffer from “energy poverty.” The other benefit is that the ratio of offpeak to on-peak would be much closer to the 3 : 1 ratio that the Auditor General suggested it should be and get more people to shift their use. It would also benefit our business community.

The cost of the two above recommendations are less than $400 million meaning ratepayers will be better off by avoiding future rate hikes and seeing some relief on existing rates. At the same time the TOU pricing will provide a clear signal that usage should shift preserving the “conservation” theme.

I certainly hope you will give my suggestions some serious thought and I do look forward to your response.

Yours truly,

Parker Gallant

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Economist: cancel the Feed In Tariff, Ontario

08 Tuesday Apr 2014

Posted by ottawawindconcerns in Renewable energy, Wind power

≈ 1 Comment

Tags

Bob Chiarelli, cost wind power, Feed In Tariff program, FIT Ontario, Jack Mintz, Ontario finances, Ontario fiscal, wind farms Ontario

From today’s Financial Post, an opinion by economist Jack Mintz. Mintz holds the Palmer Chair in the School of Public Policy at the University of Calgary and is the former chair of the CD Howe Institute.

Canada’s sagging middle: Ontario
Ontario’s growth has lagged the rest of Canada, averaging less than 1% annually since 2009
With Quebec’s election over, we can turn to Ontario where a scandal-plagued Liberal government will soon present its 2014 budget – and possibly trigger a spring election. Ontario is sagging under the weight of monstrous public debt, uncompetitive energy prices and rising taxes. Given Ontario’s size, other regions of Canada are being hurt.
Ontario has only one way out: economic growth. Luckily, the American economic recovery will significantly benefit Ontario. However, it won’t be enough. The government needs to get its house in order.
Pushing aggregate demand with deficit spending won’t achieve growth. Economic stimulus might provide some short-term relief but won’t generate sustained expansion. Instead, growth will be attained with supply-side policies by reducing onerous regulations, providing some smart tax reforms and shifting to growth-oriented spending, especially to address the notorious Greater Toronto Area infrastructure problem.
Nor will growth come from expansionary public programs like the proposed Ontario pension plan. Forcing people to hold assets in a government-sponsored plan might be helpful to some but it will be just another form of new taxation for others, who are already have adequate savings for retirement.
Ontario’s growth has lagged the rest of Canada, averaging less than 1% annually since 2009. Employment since 2009 has increased by 375,000 but the employment rate has fallen to U.S.-levels of 61.4% as of March 2014, far less than Alberta’s at almost 70%.
Ontario‘s fiscal picture is also not pretty, with gross debt over $290-billion (net debt is $272-billion), requiring $10.6-billion in taxes to cover interest charges. This expense is enormous, about one-half of education expenditures.
The average Ontario debt interest rate is only 4% but interest rates are expected to rise within the next few years. Each point increase in interest rates will add at least another $3-billion in annual interest expense.
Ontario’s energy prices are soaring. Look at any bill and one can read added delivery charges, regulatory charges, debt retirement charges and HST, resulting in an average price of 12.48 cents per kwh in Toronto for households. Large power customers pay 10.89 cents per kwh in Toronto, less than New York but higher than most eastern U.S. and Canadian cities.
Ontario made real progress in 2009 by adopting the HST to replace the provincial sales tax and reducing Ontario’s corporate and personal taxes to ensure that revenues would not increase. However, the province reneged on tax cuts only two years later.
The Ontario corporate income tax rate is stuck at 11.5%, compared to the promised 2009 legislated rate of 10%. None of this helps the province’s poor investment climate. Ontario’s share of business capital spending is only 32% of Canadian investment, less than its share of population and dramatically less than a decade ago.
Personal income tax rates have also increased to almost 50% at the top end, third highest in Canada. There is a reason why many high-income taxpayers have moved Alberta with its top rate of 39%. Alberta’s rich households, with over $500,000 in family income, account for 15% of Alberta’s taxable personal income. This ratio is two-thirds higher than Ontario.
Add in Ontario sales taxes at a 13% rate (about the average Canadian rate), fuel taxes (Ontario’s at 14.7 cent per litre is one of the highest in the country) and property taxes (Ontario is on the high side especially for non-residential property) – it all adds up to a yoke on growth.
Ontario’s Minister of Finance is in a bind. He needs more growth but he also has to deal with a large debt mountain and an uncompetitive tax system. So what are his options? Here is a five-point plan.
First, focus spending on growth-oriented programs. Transportation infrastructure should be on the top of the list as GTA traffic results in unproductive use of time.
Second, kill off the feed-in tariff program for wind and solar that creates excessive electricity costs for households and companies. This would both improve growth and help reduce administrative costs….

Read the full article here.

Wind power: $200 million a year to Ontario power customers

27 Wednesday Feb 2013

Posted by ottawawindconcerns in Ottawa, Renewable energy, Wind power

≈ 1 Comment

Tags

cost benefit wind power, cost wind power Ontario, electricity bills Ontario, Feed In Tariff program, FIT program, Pierre Poilievre, Toronto Star, wind farm North Gower, wind farm Richmond, wind power project Ottawa

In today’s Toronto Star (often a Liberal party mouthpiece) a story on how much Ontario’s decision to promote wind power at the expense of everything else, including hydro, is costing the people of Ontario $200 million per year. And yet, the province plans to triple the capacity… and thus triple the expense.

We can believe it: MP Pierre Poilievre commissioned the Library of Parliament to study the wind power project proposed for North Gower-Richmond and the results were that the project will cost Ontario ratepayers $4.8 million per year in subsidies. That amount doesn’t cover the cost of transmission lines (about a million per km) to service the project.

The story is here http://www.thestar.com/business/2013/02/26/surplus_wind_power_could_cost_ontario_ratepayers_up_to_200_million_ieso.html

Meanwhile, power rates climb. Ontario MPP Sylvia Jones rose in the Legislature today to tell of customers whose power bills are now higher than their mortgage bills, and of small business that are just giving up and closing down.

This is not a recipe for success in Ontario.

The Ontario government MUST halt all approvals of wind power projects now, and cancel the Feed In Tariff program. No choice about it.

Email us at ottawawindconcerns@gmail.com

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