Category Archives: Contracts Cancelled

Wynne’s 50 billion dollar ‘mistake’

elephant in the roomPremier Wynne’s $50-billion elephant – Parker Gallant Energy Perspectives

Do a Google search of “premier wynne+elephant in the room” you get 1,140,000 hits while a search for just “premier wynne” only gets 486,000 hits. The word “elephant” has been used by Ontario’s premier on a number of occasions. For example, the “elephant” popped up at one of the expensive Ontario Liberal Party fundraising dinners a year ago where she declared, referring to the provincial deficit, “So while some want to characterize Ontario’s deficit as the elephant in the room, I think a panda is the more appropriate metaphor,” she said. “Truly, Jia Panpan and Jia Yueyue [visiting pandas at the Toronto Zoo] were adorable. But the pandas are leaving Ontario in 2018, and in 2017-18 our deficit will be gone, too.”

The “elephant” has returned for her government in the form of high electricity prices but instead of cute little “pandas,” Premier Wynne was forced to call them her “mistake”!

Let’s look at that elephant now.

The recent release of Ontario Power Generation (OPG) 2016 annual report provides enough information to allow one to figure out exactly what created the elephantine mistake and where to point the finger. To do that we will compare the results of 2016 to 2009* and show the cause of the above market climb in electricity prices.

Price Comparison

IESO’s (Independent Electricity System Operator) data discloses the cost of electricity generation in 2009 was 6.22 cents/kWh or $62.20 per megawatt hour (MWh) or $62.2 million/TWh (terawatt hour) and in 2016 was 11.32 cents/kWh or $113.20/MWh or $113.2 million/TWh. The increase from 2009 to 2016 represents a jump of 82% in only seven years and in simple terms, is a jump of 11.7% annually.

Using the above prices to show the full cost of electricity generation in those two years is accomplished by multiplying total generation by the cost per TWh so:

Total generation 2009: 148 TWh X $62.2 MM= $9,205 MM

Total generation 2016: 149.5 TWh X $113.2 million = $16,923 MM

(Source: IESO)

That means an increase of $7,718 million (+83.8%) in the raw cost of the commodity-electricity.

Finding the “mistake”

Why did the cost jump 83.8%?

Let’s start with the generation produced by OPG who, according to their 2009 annual report generated 92.5 TWh and 78.2 TWh in 2016. Bruce Nuclear in 2009 generated 35.7 TWh and in 2016 they generated 46.1 TWh. Collectively OPG plus Bruce generated 128.2 TWh in 2009 and that represented 86.6% of total generation (148 TWh) by all generators that year. In 2016 the collective total was 124.3 TWh which represented 83.1% of all generation (149.5 TWh) in that year as reported by IESO.

Costing the generation

2009

For OPG: The costing of generation coming from OPG is a relatively simple task requiring only their gross revenue for the year divided by the generation they reported. For 2009 gross revenue was $5,640 million for the 92.5 TWh delivered making the all-in cost $61 million/TWh.

For Bruce Nuclear: The reported price paid to Bruce was $65.90/MWH. So, for the 35.7 TWh they generated, the gross revenue generated was $2,352 million or $65.9 million /TWh.

The combined costs of $5,640 million from OPG plus the $2,352 million from Bruce was $7,992 billion to produce 128.2 TWh making the combined cost per TWh $62.34 million or 6.23 cents/kWh.

As noted above, total costs for all generation reported by IESO for 2009 was $9,205 million meaning $1,213 million ($9,205 million less OPG/Bruce combined of $7,992 million) was spent to acquire the 19.8 TWh generated by the other private generators, making their costs per TWh $61.3 million or 6.13 cents/kWh. (Note: 9.8 TWh was generated by OPG’s coal plants in 2009.)

2016

For OPG: As noted above OPG in 2016 generated 78.2 TWh and their gross revenue was $5,653 million making their generation cost per TWh $72.3 million (7.23 cents/kWh). Included in OPG’s gross revenue was a $207 million payment for hydro spillage of 4.7 TWh due to SPG2. (surplus base-load generation).

For Bruce Nuclear: Bruce in 2016 generated 46.1 TWh at a reported cost of $66 million/TWh making so gross revenue was $3,043 million including the cost of steaming off almost 1 TWh due to SBG.

The combined costs of $5,653 from OPG plus the $3,043 million from Bruce was $8,696 million to produce 124.3 TWh making the combined cost per TWh $70 million or 7.0 cents/kWh.

Cost of the “other” generation

The all-in costs for generation for 2016 was, as noted above, $16,923 million. If one deducts the combined costs of OPG and Bruce Nuclear for their generation in 2016 ($8,696 million) the balance of $8,227 million went to pay for the 25.2 TWh produced by other generators. Simply dividing the $8,227 million by the 25.2 TWh creates a cost per TWh of $326.5 million or 32.7 cents/kWh. ***

Had the 25.2 TWh cost ratepayers $70 million/TWh, or the same as the OPG/Bruce Nuclear generation combination (25.2 TWh X $70 million = $1,764 million), Ontario ratepayers would not be on the hook for the $6.9 billion in excess costs! ($8,227 million – $1,764 million= $6,932 million or the very high $326.5 million/TWh)

In just one year’s data, compared to 2009, we have located many of the reasons for higher electricity costs. The Premier now claims $50 billion was needed to invest in transmission and generation but her “mistake” was in not seeing the costs would go up more than 83%, principally related to the acquisition of intermittent, unreliable renewable energy from wind and solar!

There may be even more elephants in this particular room.elephant in the room 2

*The choice of 2009 is related to the Legislative passage of the Green Energy and Green Economy Act (GEA) in the Spring of that year creating the FIT and MicroFIT programs and subsequent acquisition of renewable energy at above market prices.

**Surplus Base-load Generation is simply anticipated “base-load less Ontario demand”.

***The per TWh cost reflects the FIT contracted generation for industrial wind turbines, solar panels, bio-mass along with curtailed wind, conservation spending, the cost of selling our surplus power to other jurisdictions at only 15% of its cost, etc. etc.

READ AT:  https://parkergallantenergyperspectivesblog.wordpress.com/2017/03/16/premier-wynnes-50-billion-elephant/

 

Behind the scenes at Premier Wynne’s news conference

wind-blown

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!

Source: Behind the scenes at Premier Wynne’s news conference

CANCEL WIND AND SOLAR CONTRACTS!!!

New Year New Resolve

dscn1859The Multi Municipal Group is starting off the New Year with a public declaration and continued resolve to fix Ontario’s Green Energy Act.

January 3 2017

Public Declaration Concerning : the exploitation of rural Ontario by the Government of Ontario and the wind power development industry

 

 

We Won! Project is harmful to health & environment

Clearview residents halt wind turbine development

Ontario Christmas Lights

Do you like my Christmas lights? 

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Oh Sorry.  I live in Ontario and can’t afford to turn them on.

D’Amato: Hydro woes will finish Liberals

Dec 14, 2016 Waterloo Region Record   By Luisa D’Amato 

 “Do you like my Christmas lights?” asks the latest joke circulating on social media.

The sentence is written in white on an imposing inky-black background. It’s puzzling for a moment as you stop to ask yourself where the lights are.

But then you get it. At the bottom of the black square is the punchline: “Oh sorry, I live in Ontario and can’t afford to turn them on!”

What is it with fuel and the Liberals, anyway? The political career of former Premier Dalton McGuinty was dashed by his party’s decision five years ago to cancel planned natural-gas plants in Oakville and Mississauga, costing Ontarians more than a billion dollars.

Today, high electricity prices are doing the same thing to the political career of Premier Kathleen Wynne. Out-of-control prices have put a chokehold on small businesses, the engines of job creation. Moreover, some families are forced to use dangerous portable heaters because they don’t have access to their electricity. It’s a crisis.

Politicians in power devote a lot of time and energy toward pretending that nothing is wrong, when it really is. But when you watch televised newscast clips of Wynne (whose approval rating is now at the lowest of any premier in Canada, at 16 per cent), you can see how rattled she seems to be.

While it’s touching that she takes responsibility, the politicians don’t quite seem to understand the significance of what’s happening. In one videotaped interview I saw, Energy Minister Glenn Thibeault agreed it must be “disconcerting” to have the power cut off because you can’t pay.

Not exactly, minister. “Disconcerting” is when someone else beats you to those prized theatre seats in front row mezzanine. Not being able to pay your hydro bill is a whole different thing. It’s crushingly stressful. It’s soul-destroying.

The opposition gets it. Both the Conservatives and New Democrats regularly pound the Liberals on this topic in the Ontario Legislature. New Democratic Party leader Andrea Horwath was in Cambridge on Tuesday to meet with a woman who struggles to pay hydro bills.

Think about why costs are soaring and you encounter the fatal flaw of the 13-year-old Liberal government. It meant well. But there’s a big difference between having a grand visionary outlook and actually being able to manage something.

Give McGuinty credit for dreaming up the idea that we could put people back to work and help save the environment. He thought it would create jobs for Ontario to produce wind turbines and solar panels. As an incentive, the government offered lots of money to buy the power back. That’s part of what put prices up so high, so quickly.

There’s more. The difference between low market prices and the higher prices promised to these new producers of wind and sun energy is called the “global adjustment charge.” Between 2006 and 2015, we paid an unnecessary $50 billion subsidizing this vision, Auditor General Bonnie Lysyk says.

That subsidy accounts for 70 per cent of consumers’ electricity rates in 2013. But the difference between the market price — what we would be paying if the Liberals had left well enough alone — and the global adjusted rate isn’t clear on our bills. Lysyk says it should be. The government, unsurprisingly, wants to leave it murky. Because obfuscation is all they’ve got left.

ldamato@therecord.com

READ AT: http://www.therecord.com/opinion-story/7018820-d-amato-hydro-woes-will-finish-liberals/#.WFoJO-S5h8k.twitter

Is the FIT really Dead?

zombie.pngThe flames of political fires are blowing hot shifting winds of change creating a scorching backdraft for Ontario’s renewable energy program. The Minister of Energy’s latest directive spells out the end of FIT application procurement (feed -in -tariff). FIT 6 is to be pronounced dead as of  the end of December.

“The final FIT application period will be held in 2016. The IESO shall cease accepting applications under the FIT program by December 31, 2016 and any unallocated procurement target at the end of that procurement process will remain unallocated”

A tiny step heading in the right direction. It is never too late to do the right thing and is on the right path of cancelling wind contracts.

Minister of Energy- Glen Thiebault’s December 16, 2016 Directive:

 

 

Information is Power

Wind Turbines --- say NOWind Warriors share the common quest seeking information about wind power. Information sources are often not available, incomplete or obscure.

The Independent Electricity System Operator is a starting point to understand the components of Ontario’s energy grid.  Experts are aware of IESO’s short comings and limitations but for citizen researchers the information presented marks a good place to begin the quest for knowledge and data about how power is generated.

ontario-energy-map
Interactive Map of Electricity Generation Sites:

ELECTRICITY GENERATION SITES: http://www.ieso.ca/ontarioenergymap/index.html

chatham-kent-ontario-kruger-energy-port-alma-wind-from-merlin-road-5
Chatham Kent- Kruger Port Alma Wind view from Merlin Road 5

WIND CONTRACTS: https://www.powerauthority.on.ca/current-electricity-contracts/wind

 

installed-capacity-by-fuel-type-june-2016-for-power-data-with-solar

SUPPLY OVERVIEW: http://www.ieso.ca/Pages/Power-Data/Supply.aspx#list

ABOUT IESO: http://www.ieso.ca/Pages/About-the-IESO/default.aspx

Repeal The Green Energy Act

dscn1455
Hydro Grid located outside the shuttered Nanticoke Coal Generation Plant

 

“Ontario’s legislature must repeal Green Energy and Green Economy Act, legislation that drove unprecedented politicization of power sector decision making and needlessly harms ratepayers.”  Tom Adams Energy Expert

Ontario’s electricity bills are rising and Global News asked a panel of experts to weigh how they would make things better. The responses focused on the influence of renewable generation and cost impacts to those who foot the bills.  Parker Gallant, Jane Wilson of WCO, Mark Winfield, and Tom Adams provided insights into the causes of the current deepening consumer crisis.  Energy poverty which is forcing the heart wrenching decision whether to eat or try to pay the electricity bill.

Ontario electricity rates: Experts explain how they would make power cheaper

Green Energy Act No real fixes Ahead

wrong-way“Premier Wynne’s “mistake” will continue to drive up our bills for some time. If she pays any attention to the dreamy musings of Environmental Defence and their ilk in the drive for 100% renewables, those heart-wrenching stories will become a daily occurrence.”

November 25, 2016;  Parker Gallant Energy Perspectives  

A recent press release from Environmental Defence announced the launch of yet another effort to “green” Ontario via an organization formed by the usual cadre of environmental non-government organizations (ENGO).

This one, the 100% RE or Renewable Energy, pushes the insanity of suggesting Ontario’s “next energy plan should empower citizens and communities to join the global movement toward 100 per cent renewable energy.” It suggests Ontario “should follow the lead of communities, such as Oxford County, that are transitioning to clean and healthy 100 per cent renewable energy”.

It is apparent that the people at Environmental Defence — the same ENGO that was a participant in the creation of the Green Energy Act — somehow believe they are superior energy planners than those with qualifications. Beyond Environmental Defence, the 100%RE group includes the usual suspects such as the David Suzuki Foundation, Pembina, Greenpeace, the Ontario Clean Air Alliance, Physicians for the Environment, the Registered Nurses Association of Ontario and several lesser known names, including the Toronto Environmental Alliance and TREC. The latter were responsible for the Toronto Exhibition Place wind turbine used by countless Ontario Liberals as a photo-op but which generates almost no usable power and whose control now rests in the hands of Toronto Hydro. TREC have placed a plaque at the base of the turbine with the names of the people who invested in the turbine and have no hope of ever seeing a return on their money.  One of the names on the plaque is Dianne Saxe, the current Environmental Commissioner.  (It appears supporting industrial-scale wind turbines that kill birds and bats did not deter the Ontario Liberal government from appointing Ms. Saxe as commissioner of the environment.)

Now, with Premier Wynne’s recent mea culpa at the Ontario Liberal Party convention when she referred to Ontario citizens having to choose between heating their house or buying food, one has to wonder:  exactly why did it take her so long to admit to her mistake?  Maybe it’s because the Ontario media has recently noted rising electricity bills are causing energy poverty; the hard-luck stories in print and on TV are often heart-wrenching.  Those stories, and the relentless arrival of the monthly hydro bill, has had a lot to do with recent polling results showing that 67% disapprove of the job Premier Wynne is doing.

One of the obvious “mistakes” Premier Wynne made was not paying attention. When she was confronted by communities back in August 2013 declaring themselves “unwilling hosts” to industrial wind turbine developments, her response, as reported in the Ottawa Citizen, was to shrug it off: “Wynne has asked the Ontario Sustainable Energy Association to raise awareness in communities slated for the turbine projects about the benefits of hosting, including the financial gains that can come from being power generators in a cash-strapped economy.”

Was she so naive that she didn’t realize those “financial gains” would come from the pockets of average households, and that OSEA claimed responsibility for developing the Green Energy Act that had a role in rising electricity bills?

Her announcement on the repeal of the 8% provincial portion of the HST is at best comparable to sticking her finger in a dike to stop the flood.  It has apparently slipped her mind she was part of the team that placed the tax on our energy bills, while simultaneously blessing a 10% rebate known as the Ontario Clean Energy Benefit.

The net gain to households from those actions was a 2% reduction, at the same time as the Ontario Energy Board was approving rate increases for both the electricity and distribution lines on our bills that were multiples of the 2% net gain from the Liberal government actions.

The upcoming plan to add a “cap and trade” tax to households will quickly negate the latest 8% reduction.  On top of the new tax, Ontario Power Generation, which generates about 60% of the power we consume in the province, has submitted a rate application to the OEB that could add $63 to the average bill.

Premier Wynne’s “mistake” will continue to drive up our bills for some time. If she pays any attention to the dreamy musings of Environmental Defence and their ilk in the drive for 100% renewables, those heart-wrenching stories will become a daily occurrence.

Creating the Green Energy Act based on faulty ideology, and with no comprehensive cost-benefit analysis in place was a big mistake — one that remains fundamentally not corrected.

READ AT: https://parkergallantenergyperspectivesblog.wordpress.com/2016/11/25/premier-wynnes-mistake-no-real-fixes-ahead/