Tag Archives: Ontario

Electricity in Ontario: higher cost, lower reliability

26 Monday May 2014

Posted by in Renewable energy, Wind power

≈ 1 Comment

Tags

, , , , , , , , , , , , ,

Here from Ottawa-based energy economist Robert Lyman, a commentary on how Ontario’s electricity system has evolved. (You may also wish to read a letter in today’s Ottawa Citizen by wind industry lobby group the Canadian Wind Energy Association president Robert Hornung, who would have us believe wind power is the cheapest source of power available. )

For most of Ontario’s history, the official energy policy of successive provincial governments was generally the same. The Province sought to keep electricity prices as low as possible consistent with the goal of ensuring that Ontario consumers and industry had secure and reliable sources of supply. With the election of a Liberal government in 2003, the goal changed. Since then, the Government has raised electricity costs significantly, emphasizing reliance on expensive industrial wind turbines, solar plants and biomass for generation, and using higher rates to force consumers to cut back on their energy use.

The consequences of those policies have been a doubling of residential electricity rates and the ever-increasing share of renewable energy generation as part of the provincial electricity generation mix. According to data from the Ontario Power Authority, in 2014 biomass, industrial wind turbines and solar plants will provide about four per cent of Ontario electricity supply, but will cost consumers $1.933 billion dollars, or 17 per cent, of the total generation cost. The amount of renewable energy brought on line is expected to increase significantly by 2018, adding further to the costs.

The Ontario Long Term Energy Plan, published in December 2013, included a table projecting what this will mean for the average residential customer who consumes 800 KWh of electricity per month. Taking into account the costs of electricity generation, transmission, distribution, taxes and related regulatory charges, the average monthly bill will rise from $125 in 2013 to 181 in 2020, a 45 per cent increase. Large industrial users will see their rates rise from $79 per MWh in 2013 to $104 in 2020, a 32 per cent increase.

These increases do not take into the account the significant costs associated with having to provide significant back up capacity because the wind and solar plants are “intermittent” sources of supply. This means that they usually produce energy when it is not needed, and production from these plants cannot be varied to accommodate changes in demand.  Ontario generation capacity now exceeds demand, and the Green Energy and Economy Act requires that renewable energy sources be given preferential access to the provincial grid over lower cost conventional supplies. The increases in rates do not take account of the cost of curtailing operations at existing plants or of losses on export sales. In 2013 this was about $1 billion.

So, do Ontario residents at least get more secure electricity supplies as a result of all these increased costs? The answer lies in…

Please read the rest of Mr LYman’s article here: ONTARIO ELECTRICITY – High Prices, Low Reliability

No ‘safe hands’ here: 5 ways the Ontario Liberals are messing up the economy

28 Monday Apr 2014

Posted by in Ottawa, Renewable energy, Wind power

≈ 1 Comment

Tags

, , , , , , , , , , ,

Five ways the Ontario Liberals are messing with the province’s economy

Scott Stinson, National Post, April 28, 2014

Kathleen Wynne has spoken repeatedly in the past month about how her Liberals are the only party to be trusted with the fortunes of a province that is still unsteady on its economic feet.

Ontario, the Premier has said, needs her “safe hands” to guide it through its recovery, not those “reckless schemes” of the two parties in opposition.

Other Liberals have picked up the thread. In blasting the NDP for its demand of increased corporate tax rates, Transportation Minister Glen Murray last week said the province, “is emerging from the global recession. However, our recovery remains fragile.”

Add a couple of seafaring metaphors about troubled seas, and the comments were perfectly in line with what the federal Conservatives were touting in the 2011 election: now isn’t the time to mess about with our delicate economic recovery.

Except there is a key difference: the Ontario Liberals are furiously messing with the economy.

On Thursday, after the federal Tories announced plans to tinker with public pensions, Ontario Finance Minister Charles Sousa all but rolled his eyes at the proposal and insisted that the province will forge ahead with an Ontario-only enhancement to the Canada Pension Plan. It is fair to say a debate remains over whether a CPP top up is needed, and if so whether a mandatory plan as envisioned for Ontario is the solution. But there is little such debate in the business community.

“It’s going to have a devastating impact,” Nicole Troster, senior policy analyst with the Canadian Federation of Business, said in an interview. Among the key concerns for the CFIB, Ms. Troster said, is that mandatory pension contributions are essentially a profit-insensitive tax. Even struggling businesses would be hit with a new, additional cost. Other business groups have lined up to express concern over the Liberal proposal: the Ontario Chamber of Commerce, the Certified General Accountants of Ontario, the Canadian Chamber of Commerce, among others.

Read the full story here and see the Liberal Party’s new ad.

Excerpt Re: hydro rates:

Hydro rates

The Liberals announced this week that they plan to remove the Debt Retirement Charge from the bills of residential electricity users in 2016. It will remain on those of businesses for another two years after that. Further, while the government is expanding plans to allow companies to switch to time-of-use billing, many of them couldn’t take advantage of the option, even if they were large enough to qualify.

“A lot of our members,” Ms. Troster of the CFIB says, “don’t have a way to switch their energy usage.” Businesses are often neither open nor staffed during non-peak hours, when energy is cheapest. And with hydro rates in Ontario having doubled since 2008, and scheduled to rise further, electricity is “the most important cost concern for our members over the last two years,” she says.

Email us at ottawawindconcerns@gmail.com

 

Parker Gallant: the Liberal shell game on hydro bills

28 Monday Apr 2014

Posted by in Ottawa, Renewable energy, Wind power

≈ 1 Comment

Tags

, , , , , , , , , , ,

The Liberals’ promise of ‘significant relief’ on power bills: a closer look

The April 2014 Liberal event calendar has had a minimum of an event a day, including the Energy Minister Bob Chiarelli’s delivering a message on how the government plans to help small and medium Ontario business deal with electricity bills. The event was held at Giant Tiger’s HO in Ottawa.

Energy

Bob Chiarelli and friends: did they look at the numbers, really?

These daily announcements are leading up to the budget presentation on May 1st which is widely expected to trigger an election.

Not once in the 27-minute podcast did the Minister mention “Timmies” coffee in the context of either what it would cost ratepayers or how much it would reduce hydro bills for those small and medium sized companies. But what he did was to spin the bad news electricity story: first they rob Peter and Paul to pay wind and solar developers, and when Paul becomes vocal you rob more from Peter to pay Paul. As soon as Peter laments, you tell him you have a plan to give him a break and you simply stick Paul with higher rates. Then, while you are telling Peter he will soon get a break, you rob the company that employs him so they can no longer afford to hire Paul. Shortly after that the company laments that they may have to lay Peter off so you rob even more from Peter and Paul, so that they will be able to keep Peter on staff and may even be able to afford to hire Paul.

Should you decide to watch Chiarelli’s podcast you’ll see he doesn’t make it quite that simple. Instead, he talks about “pillars,” points and electricity acronyms like “IEI” (Industrial Electricity Incentive) or “ICI” (Industrial Conservation Initiative) programs. Like the other promises of prosperity coming daily from the government, the benefits are all in the future. Only one of his suggestions came with a specified time (2015). That was one that will instruct your local distribution company (LDC) to become a lending institution! They will be told to provide financing for “up-front capital costs” associated with “conservation programs.” Needless to say this and the other programs will be financed by other ratepayers via the Global Adjustment (GA).

The day before, the announcement was about ending the Debt Retirement Charge (DRC) at the end of 2015, and was clearly aimed at residential ratepayers (people who vote). Premier Wynne said it would bring “significant rate relief.” The DRC will continue to be collected until 2018 from those to whom Minister Chiarelli promised relief too, from his perch at Giant Tiger. By the end of December 2015 we will have paid $15.5 billion to retire the original $7.8 billion of “Residual Stranded Debt” but they want more, so they will take about $1 billion from most commercial and industrial clients before they will finally declare it paid—evidence of the Liberal trick of robbing Peter to pay Paul!

“Significant relief”?

Let’s look at Wynne’s “significant rate relief” claim. Just one year ago the Ontario Energy Board announced a rate increase that cost the “average” ratepayer $3.63 a month or $44 annually, and followed that with another increase in November raising rates by $4.00 a month or $48 annually. The more recent increase of April 14, 2014 saw another increase of $2.83 a month or $34 annually, and those announcements didn’t include rate increases for the “delivery” or “regulatory” lines on our bills, which also increased. So, in just one year the electricity rates jumped $126 annually and Wynne’s announced rate relief won’t happen until the end of 2015. That’s the year the Ontario Clean Energy Benefit (OCEB) ends. The OECB reduces the average bill by $13.30 per month or $160 annually. The “average” bill (electricity only) at the start of 2016 will be $286 higher on an annual basis than it was as of April 30, 2013. Adding the HST brings the increase to $323.
We should also expect additional increases from the OEB’s scheduled rate setting on December 1, 2014, May 1, 2015 and December 1, 2015; those add a minimum of $100/120 to our electricity line.

In other words, the average bill will have jumped by approximately $425/$450 by which time Wynne’s “significant rate relief” will become insignificant. Just as the annual DRC charge of $67 falls away, another scheduled charge from the Wednesday announcement (aimed at reducing energy poverty) of $11 will be added, so we may see a measly $56 decrease at that time.

25% increase in two years
The “average” ratepayer will have experienced an increase of over 25% in electricity prices in slightly more than 2 years by the time the December 31, 2015 date arrives. At that time our electricity costs will be charged out at over 21 cents per kilowatt (kWh). That only gets worse as more contracted wind and solar enter the grid. The price will rise further should OPG prove successful in their “significant” rate increase request now before the OEB. Add in increases expected in the “delivery” and “regulatory” lines, tack on HST and all-in costs will be in the neighbourhood of 30 cents a kWh! That average $133 monthly bill will suddenly be $240 and Ontario residents will be challenging Germany and Denmark for the privilege of having the most expensive rates in the industrialized world.

It seems the Liberal Ontario government has apparently abandoned the “Chiarelli” math (units are based on the price of a Tim Horton’s coffee) and have now moved on to a shell game. They tell us their management of the energy portfolio is constantly saving us money—you just have to look for the pea under the right shill, oops, I meant shell!

©Parker Gallant,
April 26, 2014

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

Economist: Ontario’s actions on electricity bills possibly illegal

12 Saturday Apr 2014

Posted by in Renewable energy, Wind power

≈ 3 Comments

Tags

, , , , , , , , , , , ,

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

Email us at ottawawindconcerns@gmail.com

Eastern Ontario farmers on turbines: expensive, inefficient, and No thanks

11 Friday Apr 2014

Posted by in Wind power

≈ 1 Comment

Tags

, , , , , , , , , , , , ,

According to the Eastern edition of Farmers Forum, the paper did a survey at the recent Farm Show in Ottawa and asked people whether they “approve” of wind turbines.

The startling result is the majority of those responding said they did NOT approve of large-scale wind turbines, and the reason for most was that wind power was expensive and inefficient. Several remarked on what having turbines would do to their community (thank you! You are the good guys!) and others said that the economics just didn’t make any sense. The Auditor General for Ontario said that to the government in 2011, but it still has not done any cost-benefit analysis.

Note that one North Gower area farm owner said he is “not allergic to money” and would still put one on his property—not where he lives, we venture.

Farmers not sold on wind turbines, survey says

By Brandy Harrison

OTTAWA — While farmers are among the few who can directly benefit financially from hosting wind turbines, Eastern Ontario farmers are more likely to oppose than support them, a Farmers Forum survey shows.

In a random survey of 100 farmers at the Ottawa Valley Farm Show from March 11 to 13, nearly half — 48 per cent — disapproved of wind turbines. Another 29 per cent approved and the remaining 23 per cent said they were neutral.

But positions on the issue weren’t always clear cut. Even when farmers threw their lot in with one side of the debate or the other, their reasoning was peppered with pros and cons.

It’s in stark contrast to a Farmers Forum survey of 50 Western Ontario farmers at the London Farm Show in early March, where 58 per cent were strongly opposed to wind turbines. Farmers opposed outnumbered those who approved by nearly three-to-one.

The number of turbines reveal the difference: Of the 67 wind projects representing more than 1,200 turbines province-wide, almost all the turbines dot the landscape of Western Ontario. Only two projects are in Eastern Ontario, an 86-turbine project on Wolfe Island, south of Kingston, and another 10 turbines near Brinston, south of Winchester, which were completed in January.

Wind power is so controversial that 13 farmers polled at the farm show wanted to remain anonymous, unwilling to come out publicly as a supporter or a critic.

Nearly three-quarters of farmers who disapproved liked green energy in theory but panned turbines — and sometimes the Green Energy Act as a whole — as a too-costly, inefficient electricity source that’s driving up their power bill.

Eric VanDenBroek doesn’t mind the look of the turbines that are only a short drive from his Winchester dairy farm but isn’t a fan of the way the program was rolled out.

“Financially, it’s already proving to be a disaster,” …

Read the full story and see the chart of responses here.

 

Police allege criminal breach of trust McGuinty former chief of staff

27 Thursday Mar 2014

Posted by in Uncategorized

≈ 1 Comment

Tags

, , , , , , , , , , , ,

Police allege criminal breach of trust against McGuinty chief of staff over gas plants scandal

By Keith BONNELL, OTTAWA CITIZEN March 27, 2014 11:54 AM
 Police allege criminal breach of trust against McGuinty chief of staff over gas plants scandal

The OPP allege that David Livingston, former chief of staff to Dalton McGuinty, committed criminal breach of trust in giving an outside tech expert access to 24 computers in the premier’s office.

OTTAWA — Police are pursuing a criminal charge of breach of trust against the right-hand man of former Ontario premier Dalton McGuinty in an investigation sparked by the controversy over deleted gas plant emails.

Authorities say they believe McGuinty’s former chief of staff, David Livingston, gave an outside tech expert access to 24 computers in the premier’s office — access it’s suspected was used to permanently delete information.

By allowing someone who was not an Ontario Public Service employee to alter government computers, police allege, Livingston breached the public trust.

And while just what exactly the outside expert may have done to the computers in the premier’s office is not fully known, police now have two dozen hard drives in hand and are trying to see if they can figure it out.

The case against Livingston is detailed in the “information to obtain” (ITO) Ontario Provincial Police used last month to request a search warrant for a storage facility in Mississauga, where the government hard drives were being stored.

Some of the allegations are being made public for the first time after the Citizen and other media went to court to have the police document unsealed.

The accusations have not been tested in court, but a judge has ruled it is in the public interest to make them known.

Police allege that during the transition period after McGuinty had resigned from office under a cloud of allegations over the cancellation of gas plants in Mississauga and Oakville, Livingston arranged to get special computer access so that one user would be able to access the computer profiles of the entire premier’s office.

…

Read the full story here.

Ottawa economist on the Fraser Institute report: Ontario in bad shape

18 Tuesday Mar 2014

Posted by in Ottawa, Renewable energy, Wind power

≈ 2 Comments

Tags

, , , , , , , , , , ,

HIGHLIGHTS OF THE FRASER INSTITUTE REPORT

Comparing the Debt Burdens of Ontario and California

On March 8, 2014, the Vancouver-based Fraser Institute published a research study comparing the debt burdens of the state of California and the province of Ontario. Within the United States, many people consider California to represent a prime example of irresponsible government spending coupled with poor cash management. However, the Fraser Institute report uses a number of measures to compare Ontario’s situation to that of California. In almost all cases, Ontario is much worse.

Here are the highlights of the report:

  • California’s current debt in the form of government-issued bonds is US $144.8 billion, while Ontario carries CDN $267.5 billion, almost double the amount of California.
  • This figure actually understates the disparity between the two regions, as California has a much larger economy. The gross debt in the form of bonds is 7.6% of California’s economy, while it is a “whopping” 40.9% of Ontario’s economy, more than five times as large as California.
  • Per capita, each Ontarian’s share of provincial government debt is CDN $20,166 (i.e. $80,664 for a family of four), compared to US$ 3,844 in state government debt for each resident of California.
  • Servicing this debt through interest payments is more costly in Ontario. 9.2% of budget revenues in Ontario are devoted to interest payments, compared to 2.8% in California.
  • Ontario’s expenditures as a share of the economy grew from 15.5% in 2001-2002 to 19% in 2011-2012.
  • Over this period, total government spending in Ontario has been steadily increasing from one year to the next. Thus, unlike California, Ontario has not managed to stabilize the growth of the debt in terms of GDP.
  • Ontario’s net debt for 2012-2013 is the second highest as a percentage of GDP of any Canadian province, trailing only Quebec. However, Quebec’s annual budget deficit was only half as large – 0.7 % compared to Ontario’s 1.4 %.
  • Ontario’s budget analysts project that from 2012-2013 to 2015-2016 net interest payments will represent the fastest growing expense for the provincial government, growing at 5.5 % annually – more than twice the projected rate of health care expenditures.

Robert Lyman

Ottawa, March 18, 2014

Editor: It’s worth noting that Energy Minister Bob Chiarelli admits Ontario is spending $1B a year on power generated from wind energy; he also admits we don’t need it. Sound financial planning!

The Fraser Institute report is available here.