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Tag Archives: HOEP

Ontario electricity bills up 97%; more wind power contracts to come

09 Tuesday Feb 2016

Posted by ottawawindconcerns in Renewable energy, Wind power

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Bob Chiarelli, electricity bills Ontario, Global Adjustment, HOEP, hydro bills Ontario, IESO, Parker Gallant, Scott Luft, wind energy, wind farms, wind power, Wynne government

Ontario gives away $4.5B in ratepayer dollars; Energy Minister Chiarelli persists in directive to add more intermittent, expensive wind power

Electricity costs up 97 percent in Ontario: power surplus exports rising

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February 8, 2016. Reposted from Wind Concerns Ontario

The GA or Global Adjustment first made its appearance on IESO’s Monthly Market Report in January 2007. As noted in the chart below, that year, the GA finished 2007 at $3.95 per megawatt hour (MWh) which means it cost Ontario’s electricity ratepayers about $600 million for the full year. In, 2015 the GA was just shy of $10 billion.

To be fair, the GA includes the price of “contracted” power, less the value given to it on the hourly Ontario electricity price (HOEP) market. As a result of Ontario’s high surplus of generating capacity and the intermittent presentation of wind and solar in periods of low demand, has resulted in the HOEP showing declining values. Despite declining values the cost of a kilowatt hour (kWh) of electricity increased from an average of 5.43 cents/kWh to 10.7 cents/kWh from November 1, 2007 to November 1, 2015 — up 97%. The upsetting part, and a driving force behind the 97% increase is surplus generation sold to our neighbours. We sell excess output to New York and Michigan, etc. without inclusion of the GA. The GA lost on those sales is charged to Ontario ratepayers and has become increasingly large. The chart indicates the “intertie flows” (exports/imports netted) initially cost Ontario ratepayers $20 million for 2007, but that has increased, and representing more $1.3 billion for 2015.

It is anticipated the annual cost of subsidizing surplus exports will continue to climb.

Scott Luft notes results for January 2016 are 20% higher than January 2015 for the cost of electricity as the HOEP was lower despite what Ontario’s Liberal government says about pricing stabilizing. With plans to add 500 MW of capacity for wind and solar, the climb will continue for at least another two years. Energy Minister Bob Chiarelli recently stated: “Our government’s focus is now on preparations for the next long term energy plan and the ways in which we can continue to drive down costs for Ontarians”. (Note to the Minister: a 97% increase does not “drive down costs”!)

Further reference to the chart points out addition of more wind and solar over the past nine years has driven up the percentage of renewables exported. The “Net Intertie” (net exports) increased from 19.6% in 2007 to over 57% in 2015.

What the Energy Minister needs to accept is this: we don’t need more intermittent and unreliable power.

That message is not getting through, despite evidence presented by the Auditor General of Ontario on several occasions and by numerous critics in the media.

Costing ratepayers $4.5 billion in after-tax dollars to help our neighbours is what’s happened. Perhaps Minister Chiarelli could suggest to Finance Minister Charles Sousa, that the money extracted from ratepayers provides no benefits to Ontarians. Perhaps a tax receipt is in order — that would help cash-strapped citizens, but there is a better idea.

The Energy Minister needs to immediately recall his directive to the IESO to acquire another 500 MW of contracts for intermittent wind and solar power.

© Parker Gallant,
February 7, 2016

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

Year Net Intertie 1. Global Adjustment Cost to Ratepayers % of Renewables to Wind Solar &
TWh 2. Million of $/TWh GA X Net Intertie Net Intertie Biomass generation
(millions)
2015 16.86 TWh $77.80 $1,311 57.20%        9.65TWh
2014 15.15 TWh $54.59 $846 47.00%        7.12TWh
2013 13.40 TWh $59.22 $794 48.50%        6.50TWh
2012 9.90 TWh $49.23 $487 59.60%        5.90TWh
2011 9.00 TWh $40.48 $364 56.70%        5.10TWh
2010 8.80 TWh $27.18 $239 46.60%        4.10TWh
2009 11.30 TWh $30.56 $345 31.00%        3.50TWh
2008 10.90 TWh $6.12 $67 22.00%        2.40TWh
2007 5.10 TWh $3.95 $20 19.60%        1.00TWh
       Totals 100.40 TWh $4,473     37.00TWh
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How to get those power bills down: Parker Gallant to Bob Chiarelli

02 Thursday Apr 2015

Posted by ottawawindconcerns in Renewable energy, Wind power

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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

Ontario’s expensive electricity week: $44 million lost as extra power sold cheap

15 Wednesday Oct 2014

Posted by ottawawindconcerns in Renewable energy, Wind power

≈ 1 Comment

Tags

Bruce Nuclear, constrained power Ontario, electricity bills Ontario, Global Adjustment Ontario, HOEP, nurses Ontario, Ontario, Parker Gallant, surplus power, wind farms

Ontario’s expensive electricity week: what could $44M have bought?

What the lost $44 million could have bought: 293 family docs, 580 nurse practitioners
What the lost $44 million could have bought: 293 family docs, 580 nurse practitioners

Blowing Ontario’s ratepayer dollars

Money lost in just one week could have paid for 580 nurses

So far this October, Ontario’s electricity sector has been blowing our money away at an awesome pace.

Scott Luft, whom I admire for his ability to assimilate comprehensible data, posted on Tumblr some disturbing information about the first 10 days of electricity production (and curtailed production) in Ontario.  Because the fall means low demand for electricity, our current surplus energy supply (principally, wind, solar and gas) was curtailed to the extent that it cost ratepayers $20 million, while the HOEP (hourly Ontario energy price) generated only $8.2 million.  That $20 million of curtailment cost will find its way to the Global Adjustment (GA) pot and onto ratepayers’ bills.

I took a different route and looked at the cost of Ontario’s exports for the week of October 3rd to October 9th —those numbers are also disturbing.  During those seven days, Ontario exported 399,048 MWh (megawatt hours) which was 15.7% of total Ontario demand.   Wind turbines generated and delivered 184,204 MWh, which was surplus to our needs and probably exported.  The money generated via the HOEP from all of the export sales was $56,300 or 14 cents a MWh.  Wind turbines produced just $15,164 and we sold that production for just 8 cents a MWh.

To put this in perspective, the exported production’s cost all-in (contract value per MWh + regulatory + transmission + debt retirement charge) averaged $110/MWh, according to the latest monthly IESO Market Summary August 2014 report’s findings.  Using $110/MWh the 399,000 MWh exported in those seven days hit Ontario’s ratepayers with about $44 million (less the $56,300) via allocation to the GA—that will show up on the electricity line on our bills.

Wind generation alone at the contracted rate of $135/MWh cost ratepayers $24,900,000 plus another $5 to $6 million for their curtailed production, according to Scott Luft.  That $30 to $31 million plus the cost of steaming off Bruce Nuclear, paying idling gas plants, etc., and the additional cost of solar generation, would confirm the $44 million is a reasonable estimate.

What has Ontario missed out on by having ratepayers subsidizing those exports by $44 million for those seven days?

  •  the annual salary of 293 family physicians, or
  • 580 nurse practitioners, or
  • repairing all the Toronto District School Board’s school roofs, or
  • one and a half days of interest on Ontario’s public debt, or
  •  all of Ontario’s 301 MPP salaries for a full year, or
  • 40 MRI machines, or
  • 100 months of mortgage payments on the empty MaRS Phase 2 building, or
  • increasing funding for autistic children by 30% over current levels.

Just a few examples of how the wasted subsidy money that cost each Ontario ratepayer $10 for just one week could have been used!

© Parker Gallant

October 13, 2014

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

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