Parker Gallant Energy Perspectives
March 8, 2017
While the Premier was promising relief for Ontario electricity customers (and blaming lots of other people), more proof of the government’s mistakes was occurring …
The press conference and press release on March 2nd for Premier Wynne’s announcement on reducing electricity bills by 25% took a full hour — she and Energy Minister Glenn Thibeault hung around to answer questions from the media.
The speech and the press release were a mea culpa — she apparently hadn’t noticed rates had climbed and referred to those high rates as the “elephant in the room.” She laid the blame on all previous governments in her answers to questions, for example:
Decades of under-investment in the electricity system by governments of all stripes resulted in the need to invest more than $50 billion in generation, transmission and distribution assets to ensure the system is clean and reliable.
The decision to eliminate Ontario’s use of coal and produce clean, renewable power, as well as policies put in place to provide targeted support to rural and low-income customers, have created additional costs.
If the premier was genuinely interested in the cause for high electricity bills she could have looked no farther back than her immediate predecessor, Dalton McGuinty. Premier McGuinty brought Ontario the Green Energy Act and the misinformed, unfounded belief that getting power from industrial wind turbines and solar panels, while paying at price multiples of other available reliable power, would work!
Those wind turbines and solar panels were generating power out of phase with Ontario demand even during her news conference, for which ratepayers are paying as much as 80.2 cents a kilowatt hour (kWh).
During the news conference hour, Ontario ratepayers consumed 17,300 megawatt hours (MWh); 85% of that consumption was provided by nuclear (10,000 MWh) and hydro (4,900 MWh). The balance came from gas, wind, solar and biomass. The average generation cost of nuclear and hydro generation was about $59/MWh (5.9 cents/kWh) and $191/MWh (19.1 cents/kWh) for the 15% provided by gas, wind, solar and biomass. The former costs include the “water tax” on hydro generation and the “decommissioning and fuel disposal” costs of nuclear whereas the latter does NOT include the cost of curtailed wind, idling costs of gas plants or the costs of moving those two gas plants from Oakville and Mississauga to save Liberal seats during the McGuinty era!
Also during that hour, Ontario exported 1,075 MWh to Michigan and 1,203 MWh to New York. Those 2,078 MWh (20% of Ontario’s demand) were sold to our neighbours at an average of $11.38/MWh (1.14 cents/kWh). The exports cost about $202,000, under the contract terms, yet resulted in just $23,000 of revenue to offset that cost. Ontario ratepayers picked up the loss of $179,000.
In fact, for that whole day, “net exports” hit Ontario’s ratepayers with a cost of $2.4 million.
Admitting she made a “mistake” while blaming decades of previous “governments of all stripes” is not a solution. And the 25% reduction in bills isn’t real, either: Premier Wynne is kicking the can down the road and laying the burden of her mistake on taxpayers. She still doesn’t appear to have the political courage to admit she, Mr. McGuinty and their governments made a mistake believing the environmental non-government organizations who persuaded them to believe in a green dream that has now, negatively affected all ratepayers in the province, driving away jobs in the private sector.
The herd of elephants is still in the room. Premier Wynne should start clearing them out by cancelling all wind and solar contracts that have not put a shovel in the ground!
CANCEL WIND AND SOLAR CONTRACTS!!!