Ontario electricity customers pick up the tab for unneeded power development, again

The huge, 100-megawatt North Kent 1 wind power project proposed by the Samsung-Pattern Energy consortium was posted yesterday on the Ontario Environmental Registry. The announcement comes despite the Ontario Auditor General’s report in 2015 that Ontario has a significant oversupply of electrical power, and that Ontario ratepayers are paying too much for “renewables.”

In just the first eight hours today, the day after the announcement for North Kent 1, the Independent Electricity System Operator or  IESO curtailed about 11,000 MWh of wind generation alone.  It could have provided power for 1200 average households; instead it has cost Ontario electricity ratepayers $1.5 million … for nothing.

The power developers claim the power produced from this project during its 20-year agreement with the province will generate “electricity equivalent to the annual electricity needs of 35,000 homes.”

Their use of the wording “equivalent to” is interesting because with Ontario’s current and significant surplus of power, the electricity generated from this project will almost certainly NOT go to Ontario electricity customers, but instead will be sold at a discount to neighbouring jurisdictions like Michigan and New York State.

As an example, Samsung-Pattern’s Armow wind project just began operation this week, and energy analyst and blogger Scott Luft commented: “the only drivers of price in Ontario are excess supply and supply rate increases (primarily at OPG). Samsung’s announcement states ‘Armow Wind is expected to generate enough clean energy to power approximately 70,000 Ontario homes each year’, but …  it’s unlikely it will have the opportunity to power a single one — it will power American homes or nothing at all.”

Energy commentator Parker Gallant also remarked: “The power [from the Armow project] delivered to Ontario will be charged to all average ratepayers at 13.5 cents/kWh whereas the power (probably about 50% of production) will be charged out to those NY & Michigan ratepayers at about 2.5 cents/kWh. Ontario ratepayers will pick up the difference between the 2.5 cents the surplus is sold for and the 13.5 cents/kWh the Armow owners will be paid.”

Although the project may be appealed (almost every wind power project in Ontario has been) Samsung-Pattern confidently announce that construction on the project will begin later this year, and operations will begin early in 2017.

Comments on the project are accepted by the EBR in writing or online until March 18. Comments must relate to environmental impact.