Tag Archives: Hydro One

Local Area Advisory Committee to meet January 12 on regional electricity

07 Thursday Jan 2016

Posted by in Ottawa, Renewable energy

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Meeting open to the public on options to meet electricity demand

INDEPENDENT ELECTRICITY SYSTEM OPERATOR (IESO)

You are invited to attend the third meeting of the Greater Ottawa Area Local Advisory Committee (LAC) being held on January 12. The LAC will help shape a plan to meet Ottawa’s longer-term electricity needs, including options to meet electricity demand growth in the broader West Ottawa area. The Greater Ottawa LAC will provide advice and recommendations on local priorities, and will help to identify ways to engage the broader community in the long-term discussion.

LAC meetings are open to the public, and the details of the Ottawa meeting are as follows:

Date:  Tuesday, January 12, 2016
Time:  5:30 p.m. – 8:30 p.m.
Location:  Hotel Indigo – Indigo Room, 123 Metcalfe Street, Ottawa, ON

On April 28, a 20-year Integrated Regional Resource Plan (IRRP) was released for the Central Ottawa Area. Developed by Hydro Ottawa, Hydro One Networks and the Independent Electricity System Operator (IESO), the plan identifies the electricity needs of the Ottawa area, and is designed to support community growth through a range of solutions and ensure that electricity is available when needed. The planning process puts Conservation First, and seeks the most cost-effective and sustainable options for the community.

As part of the overall regional planning process, a Regional Infrastructure Plan (RIP), focusing on the transmission and distribution components of the plan, was developed for the Greater Ottawa Region. This effort was led by Hydro One and the RIP Report was posted to the Hydro One website on December 3, 2015. The RIP phase involves confirmation of previously identified needs and a more detailed development of the “wires” plan to address the needs where a wires solution would be the best overall approach. View the RIP report online.

For information about the LAC meeting, the plan, materials from previous LAC meetings or to view an archive of the informational webinar about the plan, visit www.ieso.ca/GreaterOttawa.

We look forward to working together to plan for your future electricity needs, and hope to see you at the  LAC meeting.

Independent Electricity System Operator

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Ontario electricity customers fleeced of billions by government: Auditor General

02 Wednesday Dec 2015

Posted by in Health, Renewable energy

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AG doesn't even mention costs of reduced property values, health problems, but finds billions squandered by Wynne and McGuinty governments

AG doesn’t even mention costs of reduced property values, health problems, but finds billions squandered by Wynne and McGuinty governments

Wind, solar more costly than it needs to be

Toronto Star, December 2, 2015

By: Queen’s Park Bureau, Queen’s Park Bureau Chief, Published on Wed Dec 02 2015

Ontario electricity consumers are being zapped to the tune of tens of billions of dollars due to poor government planning, unnecessarily high green energy costs, and shoddy service from Hydro One, says auditor general Bonnie Lysyk.

Lysyk concluded ratepayers forked over $37 billion more than necessary from 2006 to 2014 and will spend an additional $133 billion by 2032 due to the Liberals’ global adjustment electricity fees.

In 14 value-for-money audits for her 773-page annual report delivered Wednesday at Queen’s Park, the auditor took aim at the electricity sector on the eve of Energy Minister Bob Chiarelli’s announcement on next steps for the province’s aging nuclear reactors.

She also highlighted problems with everything from Ontario’s 47 children’s aid societies — including questionable executive expenses — community care access centres, and school buses to the bungled SAMS social assistance computer system and the lack of a plan for dealing with contaminated waste.

But much of her scorn was reserved for the energy ministry, which is overseeing the sell-off of Hydro One, the provincial electricity transmitter.

“Hydro One’s customers have a power system for which reliability appears to be worsening while costs are increasing,” said Lysyk, echoing Ed Clark, Premier Kathleen Wynne’s privatization czar, who has argued Hydro One can and should be a much more professionally run company.

“Customers are experiencing more frequent power outages, mostly because assets aren’t being fully maintained, aging equipment isn’t being consistently replaced and trees near power lines aren’t being trimmed often enough to prevent outages,” she said, lamenting that this will be her final audit of the company since it will no longer fall under her purview once it is private.

At the same time, Ontario’s controversial push to promote wind and solar energy is proving more costly than it needs to be, and energy conservation is proving unnecessarily expensive because the province has a surplus of electricity.

Lysyk estimated consumers could end up paying $9.2 billion more for renewable energy over 20-year contracts issued under the Green Energy Act with guaranteed prices set at double the U.S. market price for wind and at 3.5 times the going rate for solar last year.

“With wind and solar prices around the world beginning to decline around 2008, a competitive process would have meant much lower costs,” Lysyk wrote, noting the government ignored advice from the now-defunct Ontario Power Authority to seek bids for large renewable energy projects.

The auditor shines a light on energy conservation efforts slated to cost $4.9 billion from 2006 to 2020, saying the investment does “not necessarily” lead to savings because excess electricity must be exported at a loss.

“We are concerned,” Lysyk wrote. “Investing in conservation at a time of surplus actually costs us more.”

Read more here

Substantial criticisms of Hydro One missing from Ombudsman report

31 Sunday May 2015

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Serious criticisms of Hydro One missing from Ombudsman report

May 31, reposted from Wind Concerns Ontario http://www.windconcernsontario.ca

Me, me, me, and, did I mention--me?
Me, me, me, and, did I mention–me?

Fifteen months after it was launched, the report from Andre Marin, Ontario’s Ombudsman, is finally out.

Exactly why it took 15 months to complete is worrisome: there have been literally dozens and dozens of articles on this issue, an Auditor General’s report, numerous letters to the editor, TV and radio exposure, etc., that detailed Hydro One’s billing and smart meter problems since the Ombudsman’s announcement of an investigation.

Hydro One was the fifth most complained about provincial entity for the 2011 and 2012 year, according to the Ombudsman’s own annual reports. Many of the articles and letters go back well before the launch of his investigation.  Most of those earlier complaints were connected to billing issues as a result of “smart meters” installed by Hydro One, but Mr. Marin clearly states in the 119-page report  “we received many complaints about subjects that were not the focus of this investigation – chiefly, electricity pricing and smart meters.”  Were those complaints included in his estimation of the 10,000 plus he claimed they investigated?

Why were “smart meter” related issues simply ignored?  Was it a lack of technical abilities within the Ombudsman’s office, or a case of being overwhelmed by the billing problems? Why wouldn’t the Ombudsman at least note in one of his 66 recommendations that someone with the technical skills should investigate the “smart meter” problems?

Surprisingly the report also says nothing about how the Ontario Energy Board has ignored Hydro One’s problems with the smart meters, nothing about the Energy Ministry’s role or their lack of oversight, and basically nothing critical of Hydro One’s senior management and its apparent failings.  Was Mr. Marin concerned any critique about those subjects might lead to his contract not being renewed?  If that was the case he doesn’t deserve to be our watchdog.

I have reviewed the findings in the report and his 66 recommendations and found many to be repetitive and overlapping.  I also found the report skirted many of the issues that needed examination as the root cause of the billing problems.   In my humble opinion, the Ombudsman’s prejudice against the private sector also shines brightly in the report as does his self-proclamation of his personal skill sets.

©Parker Gallant,

May 30, 2015

Read more Parker Gallant on the Ombudsman report here: Ombudsman’s report-the good, the bad and the ugly

Queen’s Park to pass new legislation to ram through new hydro corridors: Ottawa Citizen

21 Thursday May 2015

Posted by in Ottawa, Wind power

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Pathways and green space along the Hydro corridor in the Bridlewood area of Kanata.

Hydro corridor in Bridlewood area of Ottawa: millions of dollars’ worth of new power lines needed

Ottawa Citizen May 21

The provincial government is preparing a new law to make it easier to build and expand hydro corridors, with the Ottawa area a prime target.

Energy Minister Bob Chiarelli told a summit of energy companies in Toronto in early May that he’s working on legislation that’s mostly about adjusting the way Ontario’s main regulator for the industry, the Ontario Energy Board, works once the province sells off a majority share in Hydro One, its main transmission utility.

But part of the new law, according to the text of his speech, will “give cabinet enhanced powers to designate key transmission corridors to expedite their construction.”

Chiarelli’s spokesperson Jennifer Beaudry explained by email that the idea is to let the politicians decide what’s “in the public good” and remove a stage where the energy board makes its own determination about whether a transmission project is really needed. The regulator would still go over costs and decide who should pay what share of them, she said.

A key transmission corridor could be one that brings electricity to a remote First Nations reserve, one needed to power northern mines, or one that’s needed for “enhanced intertie capacity with neighbouring jurisdictions to support clean energy import,” the text of Chiarelli’s speech says.

And that means Ottawa, which is a major transfer point for electricity Ontario buys from Quebec’s hydro dams but where our existing wires are nearly maxed out.

“At present the firm import capability that could be relied on for all hours on the Quebec — Ontario interties is quite restricted due to transmission issues in the Ottawa area,” says a report prepared last fall by the Independent Electricity System Operator, the provincial agency that monitors and forecasts the flow of electricity around Ontario.

Lines that run through Ottawa carry power into Ontario both from northern Quebec and from the big Beauharnois dam near Montreal. Electricity doesn’t travel all that well, so a lot of the energy we use here comes from Quebec, especially in the summer.

A shortage of transmission capacity will be a big deal in the North, where the eventual development of Ring of Fire mines and related industries will take a lot of electricity. It could even affect Toronto, which has a lot of heavy-duty power lines around its outskirts but only a webwork of little ones serving its condo-packed downtown. But it’s here that the clock is really ticking.

Within five years, the agency says, there’ll be no capacity to move electricity from Quebec through Ottawa to the rest of the province unless we build hundreds of millions of dollars’ worth of new power lines; all the juice we can suck in, we’ll be using locally. At a minimum, keeping the system functioning means replacing existing lines that run past backyards in Kanata and Orléans with heavier-duty ones, a $325-million project that would only keep the power supply in Ottawa stable, not give us any to spare.

The most ambitious scenario the IESO considered would cost more like $2 billion. It’s a list of things we’d have to do if Ontario wants to make a major deal to buy Quebec electricity in quantity. We’d have to do major work on just about all of Ottawa’s high-voltage lines, but especially on the ones that run through Orléans because they mainly carry electricity from an “intertie” with Quebec at a hydro dam in Masson-Angers to Ontario’s main power grid. It would also mean building a new eight-kilometre line through Kanata, connecting transfer stations at South March and Terry Fox.

As Ontario knows well by now, new electricity projects are rarely popular. Usually, they benefit other people more than those who live nearby — a wind farm is good for the company that runs it and for whoever leases or sells the land, and (arguably) for the province as a whole, but not for the neighbours who have to look at it.

Same thing with a hydro corridor. We need high-voltage wires but nobody has yet found a way to make them pretty. Plus the science is pretty compelling that they don’t pose a health risk, but there’s no convincing some people. There’s really no way that high-tension wires carrying Quebec power past your house in Ottawa’s suburbs toward Toronto are a selling point. Which is why the cabinet will want the authority to shove them down people’s throats.

dreevely@ottawacitizen.com
twitter.com/davidreevely

 

No good reason for wind turbinesHydro One, electricity bills, wind power, wind turbines, cost of renewable, Ontario electricity bills, : says letter writer

16 Thursday Apr 2015

Posted by in Ottawa, Renewable energy, Wind power

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Provincial government, Hydro One both to blame for the mess

West Carleton Review

To the Editor:

Your April 9 edition of the West Carleton Review contained a number of articles and letters to the editor regarding our sad state of affairs with regard to Hydro in Ontario.

Hydro in the last century has become one of our essential services, and as the ice storm of 1998 demonstrated, our lives revolve around electricity to power everything in our homes and even the gas stations that fuel our vehicles.

However, in Ontario the distribution, sale and production of hydro is treated as a political spectator sport with boondoggles, lies, smart meter errors, overpaid employees and corruption being the order of the day.

Even the Auditor-General (AG) has taken this government to task regarding hydro, but the Minister, Bob Chiarelli, tries to shame the AG by stating that it is a complicated file and she doesn’t have the knowledge required to ascertain the problems at hydro, let alone recommendations on how to fix them, a fact that was quickly debunked when we found out that the AG used to work for Manitoba Hydro.

I feel it is the minister that is “out of his league” on this file.

And now the same minister and government want to implement a low-income plan to help pay for the most expensive electricity in North America by further increasing the cost of electricity to the millions who will not qualify for this subsidy since the bar has been set so low as to be mostly ineffective and unavailable to most customers of hydro. This certainly appears to be nothing else but a PR exercise on the part of the government.

There is no good reason why we should have installed so many wind turbines or solar farms, both of which need an alternative back-up source of electrical power, since both wind and sun are unreliable sources of continuous energy available on demand.

The fact that there is no available mechanism to store surplus electrical power produced by wind or solar, Hydro One sells it on the open market at a substantial loss. Unfortunately, the current government has tied their hands for quite a few more years with multi-billion dollar contracts to foreign companies to supply either the turbines or the solar panels.

In my estimation, the only solution to the mess created by this government is to buy power from reliable and affordable sources of electricity producing jurisdictions, such as Quebec Hydro or Manitoba Hydro.

Hydro One cannot be trusted to produce the required amount of affordable power required and this government, regretably, has created most of the current (no pun intended) mess it finds itself in on the hydro file.

Richard Gaudet

Kinburn

Hydro One billing mess: not fixed after a year

10 Tuesday Mar 2015

Posted by in Ottawa, Uncategorized

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In today’s Ottawa Citizen is a story on a $25,000 bill sent by Hydro One to an Eastern Ontario family. This problem is not going away…

As if skyrocketing power rates, due in part to “renewables” like wind, wasn’t enough, billing system woes continue at Ontario’s power monopoly Hydro One, despite promises to fix the situation. Here is an update from Parker Gallant.

A year ago, on March 7, 2014, the Ontario government undertook what the Toronto Star referred to as a “shake up” following “an over-billing fiasco and a scathing Auditor General’s report.” The former referred to Hydro One’s mess after implementation of their new billing system, and the latter referred to “nepotism” along with high wages and benefits at OPG.  The government appointed Sandra Pupatello (runner-up to Kathleen Wynne in the Liberal leadership race) to right the wrongs as the new Chair of Hydro One.   She was quick off the mark stating, “We are going to fix it” (the billing problems).

It’s not fixed but hopefully, Ms. Pupatello is enjoying her $150K stipend for acting as the Chair of Hydro One while retaining her position as Chief Executive of the Windsor Essex Economic Development Corporation which pays her about the same amount.

The same can be said for the spokespeople* at Hydro One who appear in several short videos on their website apologizing for the billing mess.  On the same page is a letter dated October 14, 2014 from Hydro One’s CEO, Carm Marcello addressed to the Ombudsman, Andre Marin.  In the letter he tells the Ombudsman he will shortly announce he is setting up a “Customer Service Advisory Panel” that consists of perhaps only one actual Hydro One customer, former Chief of the Saugeen Ojibway Nation,  Randall Kahgee!  Marcello also informs the auditor he plans to issue a draft “Customer Commitment” document!

Eighteen months after complaints started and eight months after the Ombudsman announced he was investigating Hydro One’s billing mess, the CEO suddenly became enlightened!  The CEO of Hydro One, the provincially owned monopoly electricity distributor to 1.2 million ratepayers, with a 134-page Conditions of Service agreement, suddenly noticed they had tens of thousands of billing problems!

If you venture into their “frequently asked questions” (FAQ) page about the Ombudsman’s investigation they state: “approximately 3 per cent of our customers have received estimated bills for too long and about another 2 per cent have gone for more than 90 days without receiving a bill.”

If one does quick math on the 3% plus the 2% you will quickly surmise 5% of Hydro One’s customers have billing problems.  Five per cent (5 %) of 1.2 million ratepayers represents sixty thousand (60,000) ratepayers.  While there is no admission of screw-ups in the videos or in Marcelo’s letter; reading the answers to the FAQ sure makes one suspicious Hydro One is trying to hide something!

Here are a few examples. I invite the reader to judge Hydro One’s ability to obfuscate.

1.What are the Hydro One billing issues I’ve been hearing about?  The move to the new system was required to improve customer service while replacing outdated and unsupportable technology.

2.What is Hydro One doing to fix this issue?  We are manually reading over 11,000 two-tiered meters to correct bills that have been estimated.

3.Why do I keep receiving an estimated bill when I have a Smart Meter?  The reason you have an estimated bill is that the meter is not communicating properly with our network.

4.Why is my bill so high? Unfortunately some customers have experienced inaccurate estimates. (So why does the answer to Q. 6 state:  “billing issues you may have heard about in the media are not related to meter accuracy.”)

5.Will I get a bill for an actual reading soon? Right now Hydro One is manually reading over 11,000 two-tiered meters for customers who have been billed on estimates. If your meter is part of this program, you should receive an actual bill soon.  (So, 60,000 bills messed up and only 11,000 meters being read!)   

6. Is the accuracy of Hydro One’s meters causing the billing issues?  Secondary tests are completed by Hydro One as they arrive from the manufacturer and then again we have sample testing of meters once they are ‘in service’.

7.Why has my meter been changed twice?  There have been some cases where the meter is not communicating properly with our network.

8.I use baseboard heating in my home. What can I do to conserve energy?  For homes that are heated with electricity, those heating costs make up to 60 per cent of your bill.

None of the answers admit to the screw-up with the new Customer Information System (CIS), nor to the purchase of “uncommunicative” smart meters. There is also no indication that any employee lost their job because of  these mishaps!

A full year has gone by, and the billing mishaps continue despite the promise by Ms. Pupatello to “fix it.”  The energy portfolio continues to be mismanaged without any consequences.   If an error of this magnitude occurred at a privately owned company, shareholders would demand action— but that’s not how things work at the provincially owned monopoly that is Hydro One!

© Parker Gallant, March10

* Average annual salary of the four Hydro One spokespeople on the letter and videos from the 2013 “Sunshine List” is $315,323. Lowest is $151,405 and highest is $724,917.  Hydro bills to these four are like buying a cup of “Timmies” coffee!

Editor’s note: The billing mess continues, as Parker says. In today’s Ottawa Citizen is a story of a couple who were billed $25,000 in error. A Hydro One “customer care specialist” is reviewing their account. The Office of the Ombudsman of Ontario has received 9,800 complaints about Hydro One, the Citizen reports, the most complaints ever received about a single organization.

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

Parker Gallant on Hydro One: use less, pay more

01 Monday Sep 2014

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Reposted from Wind Concerns Ontario

What Hydro One is doing to over a million ratepayers is a shame

People who know me know it’s like Christmas for me when the Ontario Energy Board (OEB) posts the Yearbook of Distributors and it’s true, the data is a big gift!  You can imagine how a banker might react when confronted with the details the OEB releases.  It gets better when you look at it in detail.

Here is my take on the information as it relates to Hydro One, only one of Ontario’s 73 LDCs (local distribution companies). Hydro One is a monopoly that services 1,221,100 customers (according to the Yearbook) in Ontario, and has exclusive rights to the transmission of energy generation.  Caution some of the fact that follow may disturb some readers.

  • Total Hydro One full-time employees as at December 31, 2013 was 5,641, plus what are referred to as “non-regular” employees numbering 2,109.  In 2002 Hydro One had 3,933 regular employees, so full-time employees have grown by 1,708 (up 43.4%).
  • In 2002, Hydro One had 1,219,614 customers; at year-end December 31, 2013, they reported 1,221,100 customers but they apparently needed 1,708 additional full-time employees to service those additional 1,486 customers.   (The number of “non-regular” employees for 2002 was not available.)
  • Total “Purchased Power” by the 73 local distribution companies in 2013 was 125,306 million kWh and by Hydro One was 25,829 million, or 20.6% of the total. Yet Hydro One services 24.7% of all Ontario ratepayers.
  • The average OMA (operations, management and administration) costs for the 73 local distribution companies was $325.00 per ratepayer, but for Hydro One’s customers it was $495.60—that’s $170.60 more, or 52.5% higher.
  • If one removes the hard data for Hydro One and calculates the OMA for 2013 for the 72 LDCs the average comes to $269,  meaning Hydro One’s OMA is 84.8% higher. For 2012 it was only (I use the term lightly) 65.4% higher.
  • Gross Income (net of Power Purchased) was $3.418 billion for all 73 local distribution companies but for Hydro One it was $1,323 billion or 38.7% of all the Gross Revenue from those 24.7% of ratepayers.
  • Net Income, after PILT (payment in lieu of taxes) was $624.6 million for the 73 local distribution companies and $258.3 million for Hydro One—that represents 41.3% of Net Income for only 24.7 of all ratepayers.
  • Average monthly kWh (kilowatt hours) consumed per customer was 2,112 for all customers of the 73 local distribution companies, but only 1,764 kWh for Hydro One’s customers. That means Hydro One’s customers consume 16.5% less kWh. But… (see the next bullet for the other shoe to drop).
  • Average Power & Distribution Revenue less Cost of Power & Related Costs per customer annually for all customers for the73 local distribution customers was $691.35; for Hydro One (24.7% of all ratepayers) it was $1,084.10— a difference of $392.75 or 56.8% higher for Hydro One ratepayers.
  • Average Power & Distribution Revenue less Cost of Power & Related Costs per total kWh purchased for all 73 local distribution companies was 0.027 cents/kWh; for Hydro One customers it was 0.051 cents/kWh, a difference of 0.024 cents or about 89% higher.
  • Line losses, which we are all billed for, vary and those averaged 4.1% for all 73 local distribution companies; but for Hydro One they amounted to 6.8% or 69.5% more.
  • If one adds the 900 employees Hydro One outsourced in 2002 to Inergi to for their customer service/billing process to the 3,291 reported to be employed in their LDC unit, and then add that number to the 10,022 employees all 73 LDCs reported, Hydro One employees represent 38.4% of all LDC employees, while servicing only 24.7% of all ratepayers.
  • If one calculates the number of customers per employee of the foregoing it works out to 2,914 customers per Hydro One employee and 5,532 for the other 72 LDCs. In other words, employees of the other LDCs support 2,616 more ratepayers per employee compared to Hydro One.
  • Why are Hydro One employees paid more on average if they service 47.3 % fewer ratepayers?

There are a lot more damning statistics that even a mediocre mathematician could use to demonstrate how Hydro One is the least efficient of the 73 LDCs. I believe it is obvious that there are standards applied to municipally owned LDCs that simply do not apply to Hydro One.  They are given carte blanche by the regulator, the OEB,  to run roughshod over 24.7% of all of the ratepayers of the province without consequences.

The Ontario Ombudsman’s report, expected in the fall of 2014, will highlight the mess of Hydro One’s billing system; what will the Ontario Liberal Government do to correct the blatant mistreatment of over a million ratepayers by Hydro One?

©Parker Gallant

August 27, 2014

The views expressed here are those of the author.

MP Cheryl Gallant calls for smart meter investigation

01 Monday Sep 2014

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For Immediate Release
August 29, 2014.

MP Gallant Investigates Hydro One Smart Meters

Ottawa, Ontario… Cheryl Gallant, MP recently met with Industry Canada officials regarding the controversial Ontario Hydro One “smart meter” program. The meeting was a result of an investigation that was requested by the Renfrew-Nipissing-Pembroke MP due to the thousands of complaints she has received about Hydro One. While the regulation of electricity is a provincial responsibility, measuring devices like electricity meters falls under Federal jurisdiction.

“When I started my investigation into Hydro One so-called smart meters after receiving thousands of complaints from electricity customers, the Saskatchewan smart meter fires that prompted calls to remove all installed meters in that Province were not yet in the media,” observed Cheryl Gallant, MP. “While our Federal Minister of Industry was already working with me in my investigation, the observation that other jurisdictions were experiencing problems with the new electricity meters added a sense of urgency to my investigation,” remarked MP Gallant. “The odd fact about the billing problems and smart meters at Hydro One, is that they seemed to be confined only to the Ontario Provincial Crown Corporation. Ottawa River Power Solutions, one of our locally-controlled electricity distribution companies, verified that in 10 years, they received no complaints about their smart meters.”

“Measurement Canada, the Federal Agency at the Department of Industry tasked with the responsibility to regulate metering devices, confirmed for me the problem is not with individual electricity meters when they are received from the manufacturer for certification. Laboratory tests confirm this. That means the problem is with Hydro One. “Whether it’s corruption of data between meters and the billing department, erroneous estimates where connectivity does not exist, gross incompetency or something else on the part of the provincial government, this merits further investigation.”

“Measurement Canada also confirmed to me its interest is seeing full disclosure on an individual’s Hydro One bill. Of particular note is the charge for “line loss.” It is not clear what the “line loss” or “delivery” charge on someone’s bill is actually for. Actual line loss is an easy calculation. Hydro One and the provincial government have made the calculation so convoluted, this needs an independent investigation. This is all about fairness. Not considered a tax, electrical use increases hurt more than a tax hike because at the end of the day you have less money in your pocket for food, rent, heat mortgage payments and other necessities of life,” concluded Cheryl Gallant, MP.
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For more information contact MP Cheryl Gallant at 613-732-4404

Editor’s note: Cheryl Gallant is a Conservative Party of Canada MP

Read the full story here.

Ontario energy ministers’ hydro rate forecasts off

20 Wednesday Aug 2014

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Parker Gallant: Ontario’s energy ministers’ forecasts: don’t believe a word

Hydro One serves less than one-quarter Ontario customers, yet has more “costs”

In late 2009, with the advent of the Green Energy and Green Economy Act, then Energy Minister George Smitherman proclaimed that electricity rates would only rise by 1% per year.  The 2010 Minister of Energy Brad Duguid launched his personal version of the Long-Term Energy Plan (LTEP) and included a forecast that electricity rates would rise by an average of 7.9 %over the next three years.   In late 2013 Energy Minister Bob Chiarelli produced his LTEP. His forecast? Electricity rates would rise by 42% over the ensuing five years and by 33% over the next three.

George, Brad and Bob have a treat in store: the Ontario Energy Board’s 2013Yearbook of Distributors is now out, and actual results show that all their forecasts appear to have been grossly understated.

Comparing the “cost of power” (COP) for the year ended December 31, 2013 to that of 2012 shows the COP increased by over $1.6 billion (for less consumption) by Ontario’s ratepayers (not including Ontario’s large industrial users and exports) which translated to a 15% jump, well over forecasts of the past and present Energy Ministers.

$350 a year more to our bills

That $1.6 billion jump in the cost of power from 2012 to 2013 added about $350 annually to the typical ratepayers bill.

The Yearbook is a labyrinth of data to be mined for more interesting information.  For example, the OMA (operations, maintenance & administration) costs for 2013 increased by $97 million (6.4%) over 2012 for the 73 LDCs (local distribution company) reporting.  One could assume that the increase can be shared equally by all 73 LDCs, but no: $68 million or 69% of that increase came from Hydro One even though they only service 24.7% of Ontario’s ratepayers.

Looking back to the first Yearbook (2005 year end) and comparing average kilowatts (kWh) consumed per customer per month, you calculate that it has decreased by 11.2% from 2,378 kWh to 2,112 kWh.  At the same time Hydro One customers decreased their usage by only 5.6 % (104 kWh) but started at a much lower average level of consumption. This is surprising in that the OEB allows Hydro One to use a higher average consumption level when applying for a rate increase.  It may be a reflection on the inability of OEB staff to look at data in a different fashion instead of the “isolation” they appear to apply to each and every rate increase application.

In 2012 the OEB started collecting new data referred to as “Full-time Equivalent Number of Employees” (FTE) and if one totes up the numbers you find that the LDC sector had 10,022 FTEs at the 2013 year-end, of whom 3,291 (33%) are FTEs of Hydro One. Again, Hydro One serves just 24.7% of Ontario’s ratepayers.

Take those FTE numbers and use the data supplied in some of the other 102 Yearbook pages you can determine the average cost of each FTE  (adding up OMA costs for 2013, all staffing costs, and then dividing by the number of FTEs).  For 2013, if you deduct Hydro One’s OMA costs and FTEs you get  72 LDCs claimed costs at $1.001 billion and FTEs were 6,731 — so the “average” cost per FTE $148,760.  For Hydro One the OMA costs were $604.7 million for 3.291 employees making the “average” cost for a Hydro One FTE $183,744.  One has to ask, Are Hydro One workers worth the extra $35,000?

The other information that started appearing in the Yearbook a couple of years ago under “liabilities” was what is referred to as “Employee future benefits” (EFB) which one assumes is what the individual LDC has allocated towards pension and other retirement benefits.   For 2013 the EFB for the 72 LDCs (excluding Hydro One) was $468 million and if one simply divides that value by the FTEs (excluding Hydro One) you determine those EFBs average $69,529 per FTE or about $70,000 per employee to cover future pension and post retirement benefits.

Do that for Hydro One and you see they allocated $824 million (increased by $248 million, up 43% in just two years, from 2011) towards their EFBs.  Calculating what that is for each of their 3,291 employees you are better able to understand what the Leech Report highlighted about the unaffordability of the pensions and benefits at Hydro One, OPG, and the other electricity-related Crown corporations. Employees chip in $1 for every $4 of employer (in other words, you and me, the ratepayer) contributions.

Hydro One’s liability for “future benefits” represented almost 64% of the total of “Employee future benefits” at the end of 2013 — again to service just 24.7% of all ratepayers.

In fact, the liability per Hydro One employee of $250,000 at the end of 2013 was more than three times that of the other 72 local distribution companies.

More pain in the future

Ontario finished 2013 with slightly less than 1,200 MW of solar and 2,800 MW of wind in operation.  That amount of wind and solar played the major role in causing the extraordinary jump in the cost of power.  As of March 31, 2014 an additional 3,000 MW of wind generation and 1,000 MW of solar is either contracted for or under construction, which will double the sources of intermittent and unreliable  generation.  Those contracts will push up the cost of power by $350, or more, per annum, for the “typical” householder — in other words,  George, Brad and Bob all missed forecasts by a long shot.

Don’t expect to see the Ontario government tackle the rising costs of electricity caused by the incredibly generous salary and benefits programs and increasing amounts of wind and solar added to the grid. With billions of dollars destined annually for wind and solar developers, and huge shortfalls in the overly generous pensions and future benefits of the (mainly) provincial owned electricity entities, Ontarians will see continuing double digit growth in electricity costs.

Ontario ratepayers simply cannot believe what the Energy Ministers say.

©Parker Gallant

August 18, 2014

The views expressed here are those of the author.

Republished from Wind Concerns Ontario.

Economist: Ontario’s actions on electricity bills possibly illegal

12 Saturday Apr 2014

Posted by in Renewable energy, Wind power

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From Ottawa energy economist Robert Lyman:

THE $6.2 BILLION SLEIGHT-OF-HAND

 Parker Gallant is a retired banker who has done tremendous service to the people of Ontario by reporting publicly on the Ontario government’s mismanagement of the province’s electrical energy system. In an analysis he posted on April 11, 2014, Mr. Gallant applied his knowledge of financial management and accounting to reveal the damaging and possibly illegal actions of the Liberal government with respect to the Debt Retirement Charge included in the monthly electricity bills of Ontario residents. The analysis can be found online here:

http://ep.probeinternational.org/2014/04/11/parker-gallant-the-debt-retirement-charge-premier-wynnes-6-2-billion-revenue-tool-5/#more-12245

This note offers my explanation, in layperson’s terms, of what Mr. Gallant revealed.

Background

In 1998 the Ontario government launched a major restructuring of the province’s publicly-owned electricity industry. One aspect of this restructuring was the breakup of Ontario Hydro into five successor companies on April 1, 1999.

The Ontario Ministry of Finance determined that, on April 1, 1999, Ontario Hydro’s total debt and other liabilities stood at $38.1 billion, which greatly exceeded the estimated $17.2 billion market value of the assets being transferred to the new entities. The resulting shortfall of $20.9 billion was determined to be “stranded debt”, representing the total debt and other liabilities of Ontario Hydro that the Ministry judged could not be serviced in “a competitive electricity environment”. This total was subsequently reduced to $19.4 billion when it was adjusted for $1.5 billion of additional assets transferred to OEFC. Responsibility for servicing and managing the “legacy” debt of Ontario Hydro, which includes the stranded debt, was given to the Ontario Electricity Financial Corporation (OEFC), whose opening balance sheet reflected a stranded debt, or unfunded liability, of $19.4 billion. This was the difference between the $18.7 billion value of assets assumed by the OEFC and the $38.1 billion of Ontario Hydro legacy debt.

To retire the debt, the government established a long-term plan wherein the burden of debt repayment would be borne partly through dedicated revenues from the electricity sector companies – Ontario Power Generation (OPG), Hydro One, and Municipal Electrical Utilities – and partly by electricity consumers directly. (Bear in mind that all the revenues from the electricity sector companies come from electricity consumers, so electricity consumers pay all the costs, one way or the other.). The electricity companies would make “payments in lieu of taxes” to the OEFC (this is, in theory, the equivalent of corporate income taxes). It was projected that future revenues from OPG and Hydro One and municipal electricity distributors would generate $11.6 billion over the next eight to nine years.

To read the full article click here.THE $6.2 Billion Sleight-of-Hand

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