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Tag Archives: surplus electricity Ontario

Reasons for Nov 1 hydro rate increase not transparent

17 Saturday Oct 2015

Posted by ottawawindconcerns in Renewable energy, Wind power

≈ 1 Comment

Tags

electricity bills Ontario, green energy, hydro bills Ontario, Ontario, Ontario economy, Ontario Energy Board, Parker Gallant, power exports Ontario, surplus electricity Ontario, Wind Concerns Ontario, wind farms, wind power, Wynne government

Wind? You pay. No wind? You pay. And pay.

Wind? You pay. No wind? You pay. And pay.

Reposted from Wind Concerns Ontario

The OEB hides the truth on rate increases

The Ontario Energy Board (OEB) reported their semi-annual bad news via the News Release that always contains depressing announcements about upcoming rate increases.   Couched in words meant to assuage the reader, is this statement: “The price is increasing by approximately $4.42 per month on the ‘Electricity’ line, and about 3.4% on the total bill, for a household that consumes 800 kWh per month.”

The OEB doesn’t issue a press release when your local distribution company increases their rates, part of the “total bill,” so that reference is meaningless.

If you look at the actual price rise from November 1, 2014 to November 1, 2015 the increase is considerably more than 3.4%.   In fact the increase on the charge for the “Electricity” line is 12.8% excluding the HST applied on that increase.   The charge for electricity for the “household that consumes 800 kWh per month” increased by a total of $130.31, not the $53.04 that the OEB infers.   Even using the “average” RPP (regulated price plan) posted on their site and comparing November 1, 2014 to November 1, 2015, you get an increase of 12.5%!

Costs from renewables are one-third of the increase

Looking further that what’s in the OEB News Release, we find that they attribute the increase as follows: “Increased costs from Ontario Power Generation’s (OPG) nuclear and hydro-electric power plants make up about 40% of this increase. Costs from renewable generation sources are another driver, representing about one-third of the increase.” I emphasized the last sentence as it doesn’t reflect certain facts about renewable generation (principally wind and solar), including the need to pay OPG for spilled (unused) hydro power, payments to gas plants to idle (ensuring power is available when the wind dies down or the clouds cover the skies), or directions to complete marginal generation (Mattagami’s project cost was $2.6 billion) which produces power when it’s not needed, in the Spring and Fall periods when Ontario’s demand is low.

Millions lost in one day

You need only look back to October 13, 2015, a windy day when the industrial wind turbines were cranking out unneeded power. The reported 3,450 MW of wind capacity was spitting out an average of 2,200 MW per hour, at a cost for the whole day of $6.5 million. Ontario was busy exporting 2,228 MW every hour that day, being paid 1.8 cents a kWh and at the same time, paying wind developers an average of 12.3 cents per kWh—we lost more than $5.5 million. That’s just one day!

Now if the OEB were really transparent, they would bring these issues to the forefront.   At a minimum, the people who write news releases for the OEB should also be required to take some remedial math courses!

Ontario electricity customers should demand that the Ontario Energy Board, whose mission is to “regulate prices in the public interest,” demonstrate factual reporting and provide consumers with the truth about rate increases.

© Parker Gallant,

October 16, 2015

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Ontario Q1 electricity losses: selling our power off cheap

30 Thursday Apr 2015

Posted by ottawawindconcerns in Renewable energy, Wind power

≈ 4 Comments

Tags

CFRA, electricity bills Ontario, hydro bills Ontario, Ontario economy, Parker Gallant, Rob Snow, surplus electricity Ontario, Wind Concerns Ontario, wind farms, wind power

Q1 ratepayer pain: electricity export costs skyrocket

Ontario's electricity customers pay and pay and pay while neighbours get our power cheap
Ontario’s electricity customers pay and pay and pay while neighbours get our power cheap

Wind almost 40% of exported power; cost of surplus export $437 million in just 3 months

The first quarter of the current year indicates Ontario is exporting record quantities of surplus electricity.

It appears to be part of the Liberal government plan as this excerpt from Finance Minister Sousa’s budget “Building Ontario Up” claims:  “Through our four-part economic plan, we are supporting greater investment in productivity and innovation, providing a renewed focus on international exports, encouraging the transition to a low-carbon economy and creating more jobs for Ontarians.”

It would be better if our surplus electricity was exported profitably, instead of a cost to ratepayers, but alas, that is not the way the Liberal Energy Ministers past and present have structured the portfolio.

The first quarter of the current year saw Ontario export a record 6.65 TWh (terawatts) — that’s enough to power 690,000 average households for a full year.

Export costs up 75% in first quarter

The 6.65 TWh sold to our neighbours was up 75% from 3.81 TWh in 2014′s first quarter. We sold that surplus at prices well below what we received.  Exports represented 17.5 % of Ontario’s demand in 2015 versus 10% in the same period in 2014. Wind (generated and curtailed) in 2014 was 2.05 TWh and 53.7% of Ontario’s exports; in 2015, wind grew to 2.61 TWh and was 39.2 % of our exports.

The concept of exporting is one that economists encourage; however, they expect it will be profitable, create jobs, and not burden the rest of the economy though subsidization.  Subsidizing exports is often referred to as “dumping” and frequently challenged under the WTO (World Trade Organization) rules.

Cost to ratepayers is shocking

Examining the cost to Ontario ratepayers for the 3.81 TWh exported in 2014 and the 6.65 TWh exported in 2015 using data from the Independent Electricity System Operator’s (IESO) “Market Summaries” is shocking.

The 2014 first Quarter exports cost (average of $102.6 million/TWh) ratepayers $391 million to produce and was sold via the HOEP (hourly Ontario electricity price) market at an average of $75.54 million/TWh. That cost Ontario’s ratepayers $103 million.  In 2015, the 6.65 TWh exported cost Ontario’s ratepayers $672 million (average cost of $101 million/TWh), and sold at an average of $35.4 million/TWh, costing Ontario ratepayers $437 million.

To put some context to the latter, the money lost exporting the 6.65 TWh  was equal to 6.6 cents per kilowatt hour.   The foregoing subsidy does not include other costs Ontario’s ratepayers pick up including: spilled hydro, steamed-off nuclear or payments to idling gas plants. The subsidies supporting exports is double what Energy Minister Bob Chiarelli suggests is needed to assist almost 600,000 “low-income” households to pay their hydro bills. Ontario’s ratepayers will start paying the latter January 1, 2015.

This analysis would not be complete without noting the cost of wind generation (two quarters) in 2014 was $252.7 million (average cost of $123.5 million per/TWh) and $322.5 million for 2015!

Perhaps our Finance Minister should “focus” on the harm to Ontario’s ratepayers instead of dumping our surplus electricity on our neighbours who are happy to take it and not raise the issue with the WTO.  If the first quarter of 2015 is indicative of the full year, ratepayers will pick up $1.8 billion in subsidies to supply our neighbours with cheap electricity, while Ontario’s citizens struggle.

Parker Gallant, April 28, 2015

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

Chart courtesy Scott Luft of Cold Air Online
Chart courtesy Scott Luft of Cold Air Online

EDITOR’S NOTE: Parker Gallant will be on the Rob Snow show on radio CFRA, Friday May 1st, to discuss this. Listen in an AM 580 or online at cfra.com

 

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