Tag Archives: Parker Gallant

10 years of “irrational” energy planning in Ontario

03 Tuesday Jun 2014

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Here from former banker Parker Gallant, an analysis of what has gone wrong on the energy file in Ontario over the last 10 years.

Ontario’s Power Trip: Irrational energy planning has tripled power rates under the Liberals’ direction

Parker Gallant, Special to Financial Post | June 2, 2014 | Last Updated:Jun 3 8:17 AM ET

Dalton McGuinty's Liberals claimed the province’s electricity sector was in a mess when they took over in 2003. Look at it today.

Ontario Hydro may well have been a mess. But it was a mess that produced less expensive electricity

In the summer of 2003, just before Dalton McGuinty’s Liberals gained power in Ontario, 50 million people in the U.S. Eastern Seaboard and Ontario suffered an electricity blackout caused “when a tree branch in Ohio started an outage that cascaded across a broad swath from Michigan to New England and Canada.” Back in 2003 Ontario’s electricity prices were 4.3 cents a kilowatt hour (kWh) and delivery costs added 1.5 cents per kWh. An additional charge of 0.7 cents — known as the debt retirement charge to pay back Ontario Hydro’s legacy debt of $7.8-billion — brought all-in costs to the average consumer to 6.5 cents per kWh.

The McGuinty Liberals claimed the province’s electricity sector was in a mess when they took over in 2003. The Liberals’ first Energy minister, Dwight Duncan, said then that he rejected the old Ontario Hydro model. “It didn’t work. We’re fixing it. We’re cleaning up the mess.”

Fast forward 11 years. Today, Ontario electricity costs average over 9 cents per kWh, delivery costs 3 cents per kWh or more, the 0.7-cent debt retirement charge is still being charged, plus a new 8% provincial sales tax. Additional regulatory charges take all-in costs to well over 15 cents per kWh.. The increase in the past 10 years averaged over 11% annually. Recently, the Energy Minister forecast the final consumer electricity bill will jump another 33% over the next three years and 42% in the next 5 years.

Summing up: Whatever mess existed in 2003 is billions of dollars worse today. The cost of electricity for the average Ontario consumer went from $780 on the day Dalton McGuinty’s Liberals took power to more than $1,800, with more increases to come. The additional $1,020 in after-tax dollars extracted from the province’s 4.5 million ratepayers is $4.6 billion – per year!

Why?

First, the Liberal Party fell under the influence of the Green Energy Act Alliance (GEAA), a green activist group that evolved into a corporate industry lobby group that adopted anthropogenic global warming as a business strategy. The strategy: Get government subsidies for renewable energy. The GEAA convinced the McGuinty Liberals to follow the European model. That model was: Replace fossil-fuel-generated electricity with renewable energy from wind, solar and biomass (wood chips to zoo poo). In the minds of those who framed the Liberal’s energy policies, electricity generated from wind, solar, biomass – green energy – was the way of the future.

The plan was implemented through the 2009 Green Energy and Green Economy Act (GEA), a sweeping, even draconian, legislative intervention that included conservation spending and massive subsidies for wind, solar and biomass via a euro-style feed-in-tariff scheme. The GEA created a rush to Ontario by international companies seeking above market prices, a rush that pushed the price of electricity higher. The greater the increase in green energy investment, the higher prices would go.

At the same time, Liberals forced installation of smart meters, a measure that added $2-billion to distribution costs. Billions more were needed for transmission lines to hook up the new wind and solar generators. At the same time, wind and solar generation – being unstable – needed back-up generation, which forced the construction of new gas plants. The gas plants themselves became the target of further government intervention, leading to the $1-billion gas plant scandal.

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To force adoption of often unpopular wind and solar plants, the GEA took away municipal rights relating to all generation projects, stripping rural communities of their authority to accept or reject them.

To pay for the rising subsidies to wind and solar, the Liberals adopted an accounting device that would spread the cost over all electricity consumers. The device was called the “Global Adjustment.” The Global Adjustment draw on consumers grew fast and will continue its upward movement. In effect, the Global Adjustment is a dump on ratepayers for energy costs that are above market rates. During 2013, the total global adjustment was $7.8-billion. Of that, 52% went to gas/wind/solar/biomass.

The GA for 2014 is expected to rise to $8.6-billion, adding another 2.9 cents per kWh for each electricity consumer.

To oversee all this, the Liberals established the Ontario Power Authority to do long-term energy planning (LTEP) and to contract renewable generation under the feed-in tariff (FIT) program that guaranteed wind and solar generators above-market prices for 20 years or more. In 10 years Ontarians have seen four versions of the so-called long-term plan, suggesting there is nothing long-term or planned. The Auditor General’s report of Dec 5, 2011, disclosed that no cost/benefit analysis was completed in respect to those feed-in tariff contracts.

Whatever mess existed in 2003 is billions of dollars worse today

The numerous Liberals who have sat in the Energy Minister’s chair have had a penchant for believing how the sector should function, issuing “directives” from the cabinet. The directives created the most complex and expensive electricity sector in North America. The Association of Major Power Consumers issued a “Benchmarking” report in which they stated: “Our analysis shows that Ontario has the highest industrial rates in North America. Ontario not only has the highest delivered rates of all these jurisdictions; the disparity in rates also is growing.”

The almost 100 directives over the past 11 years from Liberal energy ministers have instructed the OPA, the Ontario Energy Board, Ontario Power Generation and Hydro One on a wide variety of issues from building a tunnel under Niagara Falls to paying producers for not generating power, subsidizing industrial clients for conservation while subsidizing other industrial clients for consumption. Numerous new programs have been created that support clients in Northern Ontario, urban clients for purchasing EVs (electric vehicles), homeowners for purchasing CFL light bulbs and a host of other concepts without weighing the effect on employers or taxpayers.
Aside from the burden on consumers, Ontario’s Power Trip has cost jobs as companies – Caterpillar, Heinz, Unilever and others – closed Ontario operations while others, such as Magna, failed to invest in Ontario due to high electricity prices and high taxes that would have created private sector jobs.

Were “green energy” jobs created? Government claims hit 31,000 in a press release in June 2013 but since then no mention of green job claims appears in releases. The recent budget of Finance Minister Charles Sousa reported 10,100 jobs in the “clean tech” sector, a far cry from earlier claims.

Ontario Hydro may well have been a mess a decade ago. But it was a mess that produced electricity priced to consumers at 6.5 cents a kWh. Current prices of 15 cents a kWh will rise to over 20 cents a kWh by 2018/19, forcing the average Ontario ratepayer to pay an additional $700 annually. By that date the cost of “renewable energy” to Ontario’s 4.5 million ratepayers will result in an annual extraction of $8-billion to satisfy the perceived benefits of wind, solar and biomass. Over the 20 years of the FIT contracts, $160-billion in disposable income will be removed from ratepayer’s pockets to access a basic commodity, all in the name of “global warming” and renewable power without use of a cost/benefit analysis.

Perhaps it is time for a change in the governing of Ontario and particularly the way the electricity sector is overseen.

Parker Gallant is a former Canadian banker who looked at his local electricity bill and didn’t like what he saw.

Read the full opinion and comments here.

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

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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.

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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.

Parker Gallant on wind turbines and farming: who got the money?

07 Friday Mar 2014

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Farmers Forum, March 2014 edition

 

Wind turbines: Divisive and useless or welcome easy money?
By Parker Gallant
I recently had the pleasure of being invited to do a presentation to the Prescott Federation of Agriculture by dairy farmer Reg Presley. The presentation explained what is behind the four lines on our electricity bills. Judging by the looks on faces, questions and comments afterwards, I think some of those at the OFA meeting were shocked by what we are all paying for.
Traveling through rural Ontario we frequently encounter strange sights now appearing with regularity. Those sights are industrial wind turbines soaring up to 500 feet, sometimes spinning and other times idle. Meant to displace fossil fuels (coal) those turbines were touted as producers of clean electricity which would save us health costs. That was the spin.
My interest in energy didn’t come from viewing the turbines. It came from a nasty electricity bill received from Hydro One for our place in Prince Edward County; a farming community. The research I put into the electricity system reflected on my banking background and why my bill had jumped. As I delved into the way the system functioned I was shocked to see Ontario had implemented a “renewable energy” strategy with no cost/benefit study! It was initially launched by Dwight Duncan when he sat in the Energy Minster’s chair and later expanded by the passing of the Green Energy Act under George Smitherman.
What I found was the move to renewable energy drove up the cost of what all Ontarians tend to regard as a “necessity of life.” Wind generated electricity presents itself in the middle of the night and in the spring and fall; periods when demand is lowest. Also, their intermittent nature means they need rampable back-up power and gas plants (including those moved at a cost of $1.1 billion) fill that gap. Because wind and solar generators get “first to the grid” rights our grid manager is often faced with conditions that may cause blackouts or brownouts.
In those situations Ontario is forced to either export power at a loss, spill hydro, steam off nuclear or pay wind and solar developers for NOT generating.
Those events cause our bill for electricity to rise and recent estimates indicate our loss on just the export side costs Ontario ratepayers in excess of $1 billion annually.
With another 3,700 MW of wind and 1,200 MW of solar to be added to Ontario’s supply those costs will continue to grow! The Energy Minister recently said rates will increase 33 % over the next three years.
Things looked differently a few years ago when Premier McGuinty in a speech stated: “we know the price of fossil fuels will keep going up, while we know the price of renewable technologies will keep coming down. We know where the world is going. And we choose to lead, not follow.”
As a result wind and solar developers swept through Ontario, signing up farmers, promising cash payments for simply allowing them to erect a wind turbine occupying less than an acre of land. Leases were signed and the money started to flow. Early signers found out later they should have held out for more money. Later on lessors discovered those turbines created friction with their neighbours and even family feuds because of the “global warming” debate. The leases locked in farmers, controlling future actions such as severing land, exiting the lease or negotiating early termination; meaning the friction(s) could not be cured.
Those turbines also kill birds and bats; bats that no longer consume insects that infect or destroy crops and result in the need to use pesticides. The estimated cost of pesticide use by Science Magazine as a result of bat kills by wind turbines in Pensylvania was $74 per acre.
Last year I discovered my neighbour had optioned some of his farmland to a wind developer and we chatted about it extensively, discussing the cash payments versus the down side of wind turbines.
Former Premier McGuinty’s musings have not materialized as that “cash crop” to benefit farmers but has wound up in the wind and solar developer pockets while the rest of us hand it over. The lead McGuinty envisaged has been a blow to our pocketbooks. Perhaps we should have simply been a follower.
Parker Gallant is a Toronto-based former Royal Bank vice-president, who has retirement property in Prince Edward County. He is vice president of Ontario Wind Concerns, an anti-wind power umbrella group.

Parker Gallant: why your electricity bills are so high

06 Thursday Feb 2014

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Tell me again:  why have Ontario’s electricity rates gone up so much?

If you live in an Ontario city and just received your first electricity bill for the year, you are probably looking at it and scratching your head!   Wow, did we really use that much electricity for those lights on the Christmas tree?

The answer is, no, you didn’t, but your electricity rates and your delivery rates have climbed a lot over the past several years, even though you may have used less electricity.

Ontario’s electricity sector is very big with annual revenues of about $20 billion (approximately 4.5% of total 2012 Ontario primary household income).  The sector has been undergoing massive changes over the past decade as the current Liberal government, supported by the NDP, decided we should go “green” and save the world from global warming or its current iteration, “climate change.”

So exactly what has caused the price of electricity in Ontario to rise at a level we haven’t seen in our lifetime?   Here is a list of the principal changes that have affected our electricity bills during the past decade. Many will continue to push our bills even higher over the ten years.   They are in no particular order and remember, they all cost you money.

§     $230 million for taxpayers and almost $900 million for ratepayers to move the gas plants.

§     $60-$70 million annually—the Ontario Power Authority or OPA’s budget. One of our “energy ministers” created the temporary (OPA) instructing them to develop a Integrated Power System Plan.  It’s no longer temporary even though it has never produced an acceptable plan.

§     $300 million plus annually for the OPA to run the province’s “conservation” program, to pick up your old fridge, provide coupons for purchases of lightbulbs and thermostats.

§     Rate increases: when you actually conserve electricity the program allows your local distribution company (LDC) to apply to the Ontario Energy Board (OEB) for a rate increase on their delivery rates because they lost revenue.

§     More: the same program supports local municipalities to convert their street lights to LED bulbs.

§     $20 billion, now reduced to $13 billion, for the OPA to sign that Samsung contract to pay them for putting up wind turbines and solar panels and (maybe) produce power over the 20-year contract.

§     70.2 cents per kilowatt for the OPA to develop the feed-in tariff (FIT) program which pays various school boards to put solar panels on school roofs, or for IKEA, Loblaws and Canadian Tire, etc. to put them on their stores, and then charge them 8 or 9 cents to buy back the power.

§     $11 billion because the energy minister(s) instructed Hydro One (transmission & distribution monopoly) to spend on both transmission and distribution assets, including a big chunk just to hook up solar panels and wind turbines.

§      $700.54 for each of Hydro One’s 1.1 million smart meters—a lot more than other LDCs spent. The total cost of smart meters for the province is around $2 billion .

§     Despite all that spending on smart meters Hydro One is continually messing up their distribution customer’s hydro bills due to faulty meters and a billing system that doesn’t work very well.(One radio commentator said it’s in constant “FAIL” mode.)

§     1,700 employees at Hydro One up 39% since 2005, but they actually distribute less electricity now than they did then.

§     $4.8 billion, as of spring 2013 for pension shortfalls at OPG and Hydro One. Ratepayers are on the hook for and must pay for through their monthly bills.

§     $600 million: the amount OPG went over budget on the Big Becky tunnel under Niagara Falls.

§     $2.6 billion because OPG was directed to move forward with the Mattagami project, for run-of-river hydro which will produce power principally in the spring when we won’t really need it.

§     $6 billion, the amount the Energy Minister recently said we made in “profit” selling our excess power but ratepayers subsidize those exports at a cost of over $1 billion every year.

§     We now pay wind turbine developers to not produce power and we also pay solar farm developers for not producing power because it might put Ontario’s grid at risk for blackouts or brownouts.

§     We now pay for meteorological stations to be erected at wind developments to measure how much power they might have produced, but we can’t use, and pay for it anyway.

§     Five: the top five executives at Hydro One earned almost twice as much as Hydro One paid out under the LEAP (Low-income Energy Assistance Program) grant program which was developed to alleviate “energy poverty.”

§     $7.7 billion: in 2005 when the Global Adjustment was called the Provincial Benefit it actually was a benefit and reduced electricity bills by $53.1 million, but for 2013 it was a charge on ratepayer’s bills that exceeded $7.7 billion.

§     $1.2 billion: on July 1, 2010 the Province started collecting the provincial portion of the HST and that 8% tax increase now costs ratepayers at least $1.2 billion annually.

§     140%: the amount the “Off-Peak” time-of-use rates have risen since they first appeared, moving them closer to “On-Peak” rates—so much for encouraging power consumption to off-peak hours as a conservation measure.

§     Discounts to big industry: because Ontario has added so much generation our Energy Minister has directed the OPA to start two new industrial incentive programs that will allow big industry to pay for electricity at huge discounts similar to what we are paid for our exports which ordinary ratepayers will subsidize.

§     3,600 megawatts of wind and 1,200 MW of solar: what the OPA has contracted for which will all be paid for at above market prices, and will push that Global Adjustment pot up much further than it was in 2013.

§     The “renewable generation connection” charge: what we pay for Hydro One to connect wind and solar projects to the grid.

§     $12 billion: what Ontario’s ratepayers have handed over to pay off the residual stranded debt of $7.8 billion but here’s the bad news—there is still $3.9 billion to be paid.

§     $1.5 billion: the cost for the Province via the IESO to develop a “smart grid,” some of which is now appearing on our bills under the “regulatory” line.

§     $200 to 400 million a year, we pay to subsidize electricity consumption for large industrial users.

§     $1 billion a year: what we pay gas generators through a “net revenue requirement,” so they can be at the ready when the wind’s not blowing or the sun is not shining.

§     $ 1 billion a year and more: what taxpayers have been paying for the past four years to provide ratepayers with a “Ontario Clean Energy Benefit” of 10%. It expires in one year, meaning electricity bills will jump by 10% more.

So, no, it wasn’t your Christmas lights that jacked up your bill.  Here’s hoping a light goes on somewhere in the halls at Queen’s Park, and the government takes action to stop this madness.

©Parker Gallant

February 3, 2014

The opinions expressed are those of the author.

Big Becky cost overruns: how come nobody got fired?

28 Tuesday Jan 2014

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Parker gallant on Big Becky: what is THAT going to cost you?

BigBecky

The big hole where your money goes

 

In February 2010 an article penned for the Financial Post I disclosed that the Ontario Power Generation’s OPG) new Niagara tunnel (“Big Becky”) was not only running late but had incurred substantial cost overruns—in excess of $600 million, in fact.
The effects of that overrun have not affected our electricity prices yet, but the writing is now on the wall based on the OPG application of September 27, 2013.  The increases requested in that rate application by OPG, if approved, will increase electricity rates by at least $6-7.00 per month ($72-84.00 annually) for the average 800-kilowatt (per month) consumer.   According to the submissions to the Ontario Energy Board (OEB), all of OPG’s “regulated” hydro rates will increase from 3.9 cents per kilowatt hour (kWh) to 4.4 cents per kWh due to the costs of the tunnel.  One-half a cent doesn’t sound like much, but when you consider that in 2012, OPG produced 18.5 billion kWh of unregulated hydro, it is time to bring out the calculators.
That overrun effectively means OPG is seeking to recover about $96 million annually for the cost of “Big Becky” for the next 50 years (amortization period), which equates to $4.6 billion for a tunnel originally estimated by OPG in the business case presented to their Board of Directors in 2005, to cost $873 million. It has cost 70% over that amount.
OPG is seeking approval for the foregoing as a rate increase for their “regulated” hydro as Big Becky is classified; that means it is considered “baseload” generation and its cost of production will be close to 10 cents a kWh.  At the same time they are also seeking approval for an even larger increase in their “unregulated” hydro which could generate as much as $300 million and was the cause of the media focus when they discovered the application.  The “anti-nuclear” lobby painted it as a rate increase related to OPG’s nuclear refurbishment plans, which was a false premise.
What the cost overrun on “Big Becky” demonstrates is that oversight at Queens Park is sadly lacking in the energy portfolio.   It is disconcerting to realize that this project was $600 million over budget, yet to the best of the writer’s knowledge no OPG employee or Board member was castigated or lost their job. A private sector firm would investigate and allocate “cause” to one or several individuals in the event a project of this size exceeded budget by a factor of 70%.
Perhaps it is time to privatize the electricity sector as the private, but regulated, natural gas sector has demonstrated they can do a much better job.
©Parker Gallant                                                                                                                                           January 25, 2014
The views expressed here are those of the author.
Reposted from Wind Concerns Ontario windconcernsontario.ca

Smart meters not “smart” enough for Ottawa Hydro

07 Tuesday Jan 2014

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Frequent contributor to the Financial Post, energy commentator Parker Gallant noticed the story in the Ottawa Citizen on Hydro Ottawa and its struggle with “smart” meters, and sent this along.

Smart Meters not smart enough to suit Hydro Ottawa

The people who run Hydro Ottawa exhibit the same traits as our teens when Apple or Samsung announce the launch of a new i Pad or smart phone–they want the latest gadget. So, Hydro Ottawa trotted off to the Ontario Energy Board (OEB) with a request that they be allowed to accumulate the costs associated with replacing 96,000 smart meters because the newer models had a few new apps.

Once they completed the conversion they would then seek a rate increase.

The OEB declined to approve the conversion concept however, so any of those costs will have to be absorbed by Hydro Ottawa or by their only shareholder, the City of Ottawa. That may result in reduced dividends ($18.6 million in 2012) being paid to the city, and in a mill rate increase depending on how well Hydro Ottawa manage their costs.

The OEB did grant a rate increase of 1.4% which will add an average of $8.28 annually to the delivery line of Hydro Ottawa’s bills or, as Energy Minister Bob Chiarelli might say, the cost of five Tim Horton’s coffees.

It is disconcerting to learn however that, while the OEB declined the smart grid upgrade, the OEB did allow Hydro Ottawa the right to collect 50% of legislated tax changes (capital tax related) from ratepayers as noted from the OEB’s decision on that issue:

EB-2013-0143 In its Supplemental Report of the Board on 3rd Generation Incentive Regulation for Ontario’s Electricity Distributors, issued September 17, 2008, the Board determined that a 50/50 sharing of the impact of legislated tax changes between shareholders and ratepayers is appropriate.

The Application identified a total tax change of $142,451, resulting in a shared amount of $71,225 to be collected from rate payers. Hydro Ottawa requested the Board authorize the recording of this amount in Account 1595 for disposition in a future application given that the associated rate riders are negligible. The Board agrees with Hydro Ottawa’s request and directs Hydro Ottawa to record the tax sharing debit of $71,225 in variance Account 1595 by March 31, 2014 for disposition at a future date.

While the cost of the tax sharing will be negligible, it is worth remembering back to when the province lowered the corporate tax rate. That considerably reduced the tax allocations, referred to as “Payment in Lieu of Taxes” (PIL), that the local distribution companies (LDC) were directing to repayment of the “Stranded Debt”. What happened then was the extension of the time required to pay out the “residual stranded debt” via the Debt Retirement Charge (DRC) we find on our electricity bills. The drop in PIL payments did not reflect itself in reduced distribution charges or reduced electricity charges at that time. 

Now, with local distribution companies (LDCs) suddenly facing new or increased taxes, the poor ratepayers are expected to simply cough up more money. The people running the LDCs and the OEB must believe the Ontario ratepayers have bottomless wallets.

Parker Gallant,

January 7, 2013

Special to Ottawa Wind Concerns

Donations welcome: PO Box 3, North Gower ON  K0A 2T0

email us at ottawawindconcerns@gmail.com

Another month, another $162 million. Thanks, Bob.

19 Thursday Dec 2013

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 chiarelli1.jpg.size.xxlarge.promo
I don’t need a calculator, I can do it all in my head.

 

Another month, another $162 million hit to Ontario’s ratepayers

 

The Independent Electricity System Operator (IESO) posted its November Market Summary on December 18 but so far, Energy Minister Chiarelli hasn’t claimed a profit.  He did just that on TVOntario’s The Agenda with Steve Paikin earlier this month, when he claimed Ontario generated a $6 billion profit on exporting electricity.

 

A look through the IESO market summary shows that Ontario exported an average of 2,243 megawatts (MW) each and every hour of November—that means a total of 1,614,960 MWh left Ontario destined for New York, Michigan and Quebec.  The average hourly energy price during the month was a paltry $14.93 per MW (or 1.5 cents per kWh), meaning revenue generated from those exports contributed just over $24 million to production and ancillary costs.

 

The average cost to Ontario ratepayers is also revealed in the market summary; that was considerably more, at $115.26 per MWh (or 11.5 cents per kWh). In other words, Ontario’s loss on the exported power was $162 million for the month.

 

It is obvious that much of the wind power generated throughout

November wound up either exported or

caused other generation to be exported or wasted

 

What that means to every one of the 4.9 million ratepayers in Ontario is a payment of an average of $33.00 each to subsidize those exports for November.  The exact role wind and solar played in those exports is not disclosed in the market summary, but wind production during November was high and totaled 721,000 MWh or 1,000 MW per hour.  The cost of that power production to the ratepayers is estimated to be almost $100 million, without including the costs of the gas plants backing wind up, spilled hydro, or steamed off nuclear at Bruce Power.  It is obvious that much of the wind power generated throughout November wound up either exported or caused other generation to be exported or wasted.

 

The total amount picked up by the average ratepayer in Ontario to support those exports so far in 2013 is approximately $280.00 each.   In announcing the new Long term Energy Plan, Energy Minister Bob Chiarelli’s forecast a rate increase of 42% increase over the next five years—it looks like that may come true much sooner than he forecast.

 

It is time to pull the plug on the 3,700 MW of uninstalled but contracted wind and the 1,400 MW of solar before the cost to subsidize electricity exports is more than the average ratepayer’s electricity bill!

 

The $6-billion dollar man, as energy analyst Tom Adams calls Minister Chiarelli, should seriously consider taking a math lesson or two before embarking on any more forecasts.

 

©Parker Gallant,

December 18, 2013

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

Parker Gallant asks, are these organizations really “charities”?

10 Tuesday Dec 2013

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Parker Gallant: federal finance minister attention to environmental “charities” welcomed

Claiming charitable status while pushing a political agenda just a walk in the park

Is the David Suzuki Foundation really a “charitable institution”?

An article in the December 6 Toronto Sun indicated that Canada’s Finance Minister, Jim Flaherty is ready to play hardball with environmental groups that abuse their charitable status.

Many people throughout Canada would applaud that as some “environmental” groups do not reflect what most Canadians would regard as a charity.   They don’t shelter the homeless, spend money on medical research, feed the destitute or care for the disabled.  Their objectives are aimed at “greening  the planet” with no scientific basis to back up their reasoning.

One of those that many Canadians either love or hate is the David Suzuki Foundation, co-founded by David Suzuki and Tara Cullis.  Suzuki threw his personal support behind Dalton McGuinty during Ontario’s 2011 election and was shamed by the media for it.  The Foundation was castigated for its visible support for a political party and agenda, despite the legal requirement that organizations with charitable status avoid political bias.

David Suzuki was personally rebuked; a letter to his “Friends” was published on the Foundation’s website and in the National Post April 14, 2012 to announce he had resigned from the Board of Directors of the David Suzuki Foundation.

“In a letter to his supporters on Friday, the former Nature of Things host said he left the David Suzuki Foundation’s board of directors because he wanted to be able to speak freely ‘without fear that my words will be deemed too political and harm the organization of which I am so proud.’ ”

But all is not as it appears: a visit to the Canada Revenue Agency website for Charities, indicates that the Foundation’s August 31, 2012 filings show David Suzuki listed as a “Director” as well as “President and Co-founder.”  The CRA filings also show former Mayor of Toronto, David Miller and another CBC icon, George Stromboulopoulos as directors in addition to David Suzuki’s daughter Severn Cullis-Suzuki.

Did he really go?

While the official year-end filed with the CRA appears to be August 31st the Foundation also publishes a “Statement of Operations” on their website that shows a date of December 31, 2012 and contains what they refer to as “A message from our co-founders.”   This message features a picture of David Suzuki and Tara Cullis along with the message.  The Directors list found on the Foundation’s website doesn’t list Suzuki so it may be that his resignation was tendered to the Board after August 31, 2012 and before December 31, 2012.  His resignation didn’t affect his influence on the Foundation however as Mr. Suzuki has continued as a regular blogger on the site (several postings within the past month) and left his 17-page biography (a direct link just before the donate button under “David”) for all to see as well as his picture on every page.

Has this adverse publicity (Suzuki called it “bullying”) affected the Foundation?  Maybe: it appears to have had an effect as “charitable donations” on the CRA site indicate they fell from $6.9 million in 2011 to $5.3 million in 2012 which is about the same drop as for all revenue.  The latter fell to $9.2 million from $10.9 million in the same period.   If one looks at the Statement of Operations however, posted on the David Suzuki Foundation site for the year ended December 31, 2012 versus 2011 it actually shows revenue increasing by $193,000 from $8.7 in 2011 to $8.9 in 2012.  It is impossible to determine from the statement what was or wasn’t designated as “charitable donations,” nor can one discern what actual expenses were.

Millions and millions
Looking at the CRA filings it shows a net worth for the Foundation of $10.5 million (August 31, 2012) and itemizes expenses in a more understandable format.  On the latter “compensation” is shown as $4,886,000; Professional & Consulting Fees as $1,120,000; research grants of $1,128,000; travel & vehicle expense as $233,000; occupancy $513,000; and political activity expenditures as $211,000.  The balance went to office supplies, staff training and other sundry related expenses.   If one tallies up those expenses it presents expenditures of $8.8 million— it is difficult for the observer to find the “charity” involved.

Traveling back to the “Statement of Operations” posted on the Foundation’s website, the expense categories are completely different carrying titles under the heading “Programs” such as Climate Change and Clean Energy, $1,180,000; Terrestrial Conservation $914,000; Marine and Freshwater $915,000; Program Management, $216,000; and  Communication $2,146,000.  This statement also discloses an expense referred to as “Fund-raising” which consumed $2,067,000 (24%) of total claimed expenses of $8,770,000 for the year ended December 31, 2012.

So, exactly what did this charity accomplish?  Did it feed the poor in Africa, or educate children in Ecuador, save a gorilla, or protect a species at risk, or even provide a single bed for a homeless person in Canada?   If your answer is, none of the above, why would anyone even deign to think that this is a “charity” or to believe that they should get special tax treatment by our government.

In the spirit of Christmas, I say “bring it on” Mr. Flaherty. It is past the time that the CRA gives these organizations special treatment!  A lump of coal for Mr. Suzuki and his Foundation!

©Parker Gallant,
December 8, 2013

Note: According to the CRA filings by the David Suzuki Foundation “The charity has not indicated that it is designated as a public or private foundation.”

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

Parker Gallant: Ontario already LOST $1.2B in power exports in 2013

03 Tuesday Dec 2013

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Ontario’s Power Trip: Province lost $1.2-billion this year exporting power

Parker Gallant | 02/12/13 | Last Updated: 03/12/13 8:00 AM ET
More from Parker Gallant
As a starting point, Ontario Energy Minister Bob Chiarelli needs a bolt of financial literacy if he believes not spending an extra $20-billion actually saves the system anything.

THE CANADIAN PRESS/Matthew Sherwood
As a starting point, Ontario Energy Minister Bob Chiarelli needs a bolt of financial literacy if he believes not spending an extra $20-billion actually saves the system anything.

That’s a cost $250 for every average ratepayer

Ontario Energy Minister Bob Chiarelli keeps spinning on his province’s energy mess. “Looking to the future,” he told a local newspaper, “we expect that [electricity] rates will continue to increase but we’ve taken very significant steps to mitigate those rate increases.” To support his claim, Mr. Chiarelli says that the province has deferred an investment in new nuclear power, renegotiated a Samsung power deal and brought in new controls on wind power that combined will save the system $20-billion.
As a starting point, this minister needs a bolt of financial literacy if he believes not spending an extra $20-billion actually saves the system anything.
The fact is that Ontario consumers and industry will not see any relief in their power bills. Nothing brings that point home more than an examination of how much electricity Ontario exports, mostly to the United States, and what those exports cost ratepayers.

Read the full story here.

Parker Gallant: Ontario’s insane power exports

27 Wednesday Nov 2013

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(reprinted from Wind Concerns Ontario)

Another weekend came and went and Ontario shipped 104,000 megawatt hours (MWh) to our neighbours in Michigan, New York and Quebec. Those exports were enough to provide electricity to almost 11,000 Ontario households for a full year but instead helped the buying jurisdictions hold down their electricity prices. Continuing at this pace of exporting 2,100 MWh each and every hour means Ontario will export the same amount of electricity used to power 1.8 million Ontario homes.

Those 104,000 MWh generated revenue of $2.4 million based on the average price received per kWh over the weekend (2.3 cents) but cost ratepayers in Ontario in excess of $11 million to produce. The difference of $8.6 million will find its way to the Global Adjustment (GA) pot, driving up electricity prices in Ontario. While last weekend (November 23rd and 24th) experience only amounts to about $2.00 each for the 4.5 million ratepayers, if we add that to the $8.00 for the prior two weekends, it becomes $10.00 for each ratepayer—collectively, that amounts to $50 million for power Ontario’s ratepayers never got to use but had to pay for over just six days.
Last weekend, wind turbines produced slightly over 60,000 MWh or 57% of Ontario’s exports; the costs for that production alone (minus the revenue earned) was $6.9 million. If one adds the cost of gas plant back-up of $900,000, payment for constrained wind ($150,000), and steamed off nuclear from Bruce Power ($800,000) it coincidentally comes to slightly more than the $8.6 million that went to the GA pot.
The hourly Ontario energy price (HOEP) held up (2.3 cents per kWh) better for the past weekend than the previous two, or the cost to ratepayers would have been even higher.
The Long Term Energy Plan or LTEP is due to be released Monday, December 2. If it does not attempt to turn down this insane wealth transfer from Ontario’s residential and commercial ratepayers to NY, Michigan and Quebec, then Ontarians should seriously look at exporting our Liberal politicians. I think many of us would even pay those jurisdictions to take them off our hands.
©Parker Gallant
November 27, 2013
The opinions expressed here are those of the author and do not necessarily represent Wind Concerns Ontario policy.