I am writing to you and your esteemed colleagues requesting that the new PC majority government repeal the Green Energy Act with the swiftest possible speed. I know you have railed against this misguided piece of legislation. Indeed, your estimate of its low caliber is echoed by Pierre-Olivier Pineau, Associate Professor and Electricity Market Expert, University of Montreal HEC Business School, who opined that “Ontario is probably the worst electricity market in the world.” (https://www.forbes.com/sites/judeclemente/2016/03/30/ontarios-high-electricity-prices-crush-business/#2a8c5ab44587)
As you know, this Act has been a disaster on many fronts – its inability to effect the desired reduced CO2 emissions, its harmful effect on the environment, its negative impact on the economy and our electricity rates, its stripping of municipal planning and zoning rights, and importantly, its deleterious impacts on rural residents who only want a safe and quiet place to enjoy their homes and properties.
1. Tweaking the GEA is folly, as the very Act is based upon faulty foundations – that the wind is free, clean, and always blowing somewhere. This myth fails to take into account that wind is unpredictable, non-dispatchable, unreliable and inherently intermittent. When added to a power grid designed entirely around dispatchable sources, it leads to grave system instability. As renewable energy sources are added into the mix, their impact is exacerbated by an inability to match loads (demand) with supply, as supply would be increasingly and inconveniently dictated by phenomena like the weather (and sunset). The green mantra also fails to acknowledge the requisite concomitant use of fossilk fuels (particularly, gas) run in an open cycle, stop and go, inefficient mode like the Don Valley at rush hour. And it fails to deal with the vast stretches of weather system patterns and the transmission requirements necessary to connect with Dorothy in wind-blown Kansas.
2. Furthermore, mere enforcement of GEA regulations is an insipid approach. The regulations fail to include infrasound, low frequencies, high frequencies, amplitude modulation, stray voltage, vibration, the trespass of shadow flicker, the destruction of prime agriculture lands, disturbances to water wells, impact on livestock and wildlife harm/harassment/ kill/displacement, among other winning features of IWTs. Nor does it address the legality of gagging lease holders from discussing health impacts, thereby precluding public safeguards. Moreover, the existing regulations regarding acoustic testing and monitoring, when implemented at all, are cumbersome by design, rarely feasible, and statistically dishonest.
3. The only honourable approach to addressing the Green Energy Act is to cancel it. In a Financial Post article entitled “Yes, Ontario’s Liberals can cancel their terrible renewable power contracts—and they should do it now”, (Lawrence Solomon, September 2016) argues for “cancelling Ontario’s odious renewables contracts”. He writes:
Mr. Ford, many rural residents have been holding on for a June 7th PC win as their last hope in dealing with the adverse living circumstances imposed upon us by the McGuinty-Wynne dynasties. I encourage you to repeal this disastrous Green Energy Act and return our homes and our pastoral farmlands to their idyllic pre-GEA state.
“The Green Energy Act is toast,” he added. “But the act is a very large, far-reaching piece legislation. It’s not just about some wind and solar generation. It has huge impacts on the administration of the electricity system.”
Post-election analysis: Five key local issues to watch
From deeply divisive wind energy projects, to school closings and transportation, five issues loomed large in the London region during the Ontario election.
GREEN ENERGY: ‘The pigs are not going to fly’
The London Free Press
Despite Doug Ford’s commitment to tear apart Ontario’s energy system, consumers shouldn’t expect to see much change in their electricity bills, says an energy analyst and researcher.
“Don’t expect your rates to go down. The overall cost of power is likely to rise over the next four years. The power system will look a lot like it does today,” Tom Adams said.
What will likely be gone: The Liberals’ $600-million conservation fund that paid homeowners for installing energy efficiency upgrades.
But even that won’t come without strong opposition, said Adams, author of several academic papers on energy and a consultant for consumer organizations.
Ford has promised to scrap the controversial Green Energy Act, the legislation that led to costly wind turbine projects across Southwestern Ontario – often over the objection of municipalities stripped of control over the location of energy projects.
The legislation became the flashpoint for anger over rising energy bills, which were caused only in part by sweetheart contracts with green energy suppliers.
A key question at the top of my Hydro One electricity statement is “What am I paying for?” According to Hydro One the charge includes:
1) The cost of generating the electricity used – ‘the Ontario Energy Board (OEB) sets the cost and the money collected goes directly to the electricity generators.’
2) The delivery – ‘money collected by Hydro One to build, maintain, and operate the electrical infrastructure which includes power lines, steel towers, and wood poles covering 960,000 sq km’
3) Regulatory charges – the Independent Electricity System Operator (IESO) uses this money to manage electricity supply and demand in the province.
4) HST – harmonized sales tax
5) 8% Provincial Rebate.
In Ontario we can generate power from three nuclear power plants, 45 hydro generating stations, 30 gas plants, 38 industrial wind turbine installations, 5 solar installations and 5 biofuel generating stations. The website gridwatch.ca provides an hourly overview of power generated, Ontario demand and imports and exports.
According to the IESO we have a total installed capacity of 36,853 MW of power that could be produced per hour if all generators were running flat out. To allow for maintenance and emergencies the IESO forecasts capability at peak demand rather than using total installed capacity. The forecast capability at peak demand for Ontario is 26,704 MW/hr, which is the production of power generation we count on.
The demand for power fluctuates with time of day, day of the week, weather conditions, and season. In 2017 the average hourly demand for power was 12,031 MW per hour. Therefore, we have tremendous capacity in the Ontario power system.
It is further complicated because not all generators are equal – nuclear, hydro and gas are reliable baseload generators that can be ramped up or down. But wind and solar are unreliable, intermittent and only produce power when the wind blows and the sun shines.
To accommodate a fluctuating supply considerable flexibility exists in the system. We pay for production, but we also pay for generation that is constrained or held back from the grid. Some generators are underutilized, and we pay them to sit idle and provide backup.
Using the information provided by the Independent Electricity Systems Operator (IESO):
The least expensive power Ontario generates is HYDRO. Our cleanest, greenest, cheapest renewable energy costs $62.00 per MWh. The Ontario Hydro power generating system has a total installed capacity of 8480 MW per hour potential production, with a capability at peak demand of 5786 MW / hr. On average the output from the Hydro generating system for 2017 was 3143 MW/hr. Although we only used 54% of the capability of Ontario hydro generation plants (the rest of the time we ran the water over the dam) Hydro provided 26% of our hourly generation of power in Ontario in 2017. The Hydro supplied to the electrical grid cost $1.707 billion dollars in 2017.
The second least expensive power generated in Ontario is NUCLEAR which cost $77.00 per MWh. Nuclear is the work horse for Ontario providing more than 63% of the power produced in this province. The average hourly output for 2017 was 7551 MW per hour. Costing $5.093 billion dollars per year.
Ninety percent of the power produced in Ontario is from Hydro and Nuclear and we underutilize both these systems to accommodate wind and solar energy. The daily cost for Hydro and Nuclear power produced is $18.6 million dollars per day or $6.8 billion dollars per year.
The total unit cost for WIND power is $159.00 per MWh produced (two and one-half times the cost of hydro and double the cost of nuclear). Wind has an installed name plate capacity of 4213 MW/hr but is an intermittent and unreliable energy source and only provided 765 MW per hour or 6% of the hourly generation of power for Ontario in 2017. Using the installed capacity wind energy should be providing 35% of the power production of this province, but due to the unreliable nature of wind the production could be 0% so nineteen gas plants were built since 2003 to back up wind and solar. The daily cost of wind energy that was produced was $2.9 million dollars per day or $1.065 billion dollars per year. This does not include the amount paid for constrained wind energy so under-represents the actual cost.
If we add in the cost of constrained wind which was 3.396 million MWh in 2017 and pay that out at $120.00 per MWh then the cost increase for constrained wind in 2017 was $407.5 million. The total cost of wind energy for 2017 then is closer to $1,065 + 407.5 = $1,472.5 million dollars or $1.4725 billion dollars per year.
The total unit cost for NATURAL GAS is $188.00 per MWh produced. Because natural gas is used as a back-up power for wind and solar the demand fluctuates hourly and again we have an energy source that is also paid when constrained. The gas plants are capable of producing 10,277 MW/ hr but only produced 489 MW/ hr in 2017. So we operated the gas plants at 5% of their potential! The daily cost of natural gas energy that was produced was $2.2 million per day or $ 805 million per year plus cost for constrained natural gas.
Constrained natural gas is paid $10,000.00 per month per potential MWh of production. So with a potential production of 10,277 MWh X $10,000 X 12 = $1,233,240,000 per year. The total for natural gas would be closer to $2,038.24 million dollars per year or $2.038 billion dollars.
The elephant in the room is definitely SOLAR weighing in at $513.00 per MWh produced (eight times the cost of hydro!) The contribution of roughly 1000 MWh per day is minimal but the cost is phenomenal at just over $0.5 million per day. A cost of $203 million per year. Again, we have not accounted for the huge amount of solar energy that is embedded in the local distribution systems eg small solar installations and panels mounted on your house. So the cost of solar is grossly under-represented, probably to keep us in the dark.
If the embedded solar is indeed 2,300 MW of installed capacity (using 13% as the potential production) we have an additional 299 MW/hr solar to pay for. At $513.00 per MWh that would be an additional 299 X 24 hr per day X $513 = $3.693 million per day or $1.348 billion dollars per year. So, the total cost of solar could be closer to $1.551 billion per year. ($1.348 +$0.203)
Only 10% of our power is produced from wind, solar and natural gas, made possible by underutilizing our nuclear and hydro power generation. The total cost for wind energy in 2017 was upwards of $1.4725 billion dollars plus solar at $1.551 billion dollars plus natural gas at $2.038 billion dollars for a total of $5.062 billion dollars!
That final 10% of the power generated in Ontario is probably costing us closer to $5 billion dollars – over 40% of the total cost of the generation of electricity in this province! And we still need to include the cost of the delivery charges, the regulatory charges and the HST!! Waste, waste and more government waste as we pay for duplication, underutilization and huge government subsidies for the generation of power in Ontario.
Energy consumption is a driver of economic growth. Policymakers in Ontario have made poor policy decisions, resulting in rising electricity costs, lower employment, and lower competitiveness, while achieving minimal environmental benefits. This publication presents a series of collected essays that critique the reasoning behind Ontario’s electricity policy changes and spell out the long term consequences.
Ontario’s main policy shift began around 2005 when the government made a decision to begin phasing out coal. The next major step occurred in 2009 when the government launched its Green Energy Act (GEA). The centerpiece of the GEA was a Feed-In-Tariff program, which provides long-term guaranteed contracts to generators with renewable sources (wind, solar, etc.) at a fixed price above market rates. In order to fund these commitments, as well as the cost of conservation programs, Ontario levied a non-market surcharge on electricity called the Global Adjustment (GA). Between 2008 and 2016, the GA grew more than 70 percent, causing a drastic increase in electricity prices. The high cost associated with aggressively promoting renewable sources is particularly troubling given the relatively small amount of electricity generated by these sources. In 2016, renewable sources generated less than 7 percent of electricity in Ontario while accounting for almost 30 percent of the GA.
Ontario’s decision to phase out coal contributed to rising electricity costs in the province, a decision justified at the time with claims that it would yield large environmental and health benefits. The subsequent research showed that shuttering these power plants had very little effect on air pollution. Had the province simply continued with retrofits to the coal plants then underway, the environmental benefits of the shift to renewables could have been achieved at one-tenth the cost.
The issue of rising electricity costs in Ontario can be partly attributed to the imbalances between supply and demand of electricity. Between 2005 and 2015, the province decided to increase its renewable capacity to facilitate the coal phase-out. However, since renewable sources are not as reliable as traditional sources, the government contracted for more natural gas capacity as a back-up. Meanwhile, the demand for electricity declined, partly due to rising electricity costs. The increase in the total installed capacity, coupled with lower electricity demand, has resulted in excess production being exported to other jurisdiction at a significant loss.
As a result of these structural shifts and poor governance, electricity costs have risen substantially in Ontario. Ontario now has the fastest growing electricity costs in the country and among the highest in North America. Between 2008 and 2016, Ontario’s residential electricity costs increased by 71 percent, far outpacing the 34 percent average growth in electricity prices across Canada. In 2016, Toronto residents paid $60 more per month than the average Canadian for electricity.
Ontario’s skyrocketing electricity rates also apply to the province’s industrial sector. Between 2010 and 2016, large industrial users in Toronto and Ottawa experienced cost spikes of 53 percent and 46 percent, respectively, while the average increase in electric costs for the rest of Canada was only 14 percent. In 2016, large industrial users paid almost three times more than consumers in Montreal and Calgary and almost twice the prices paid by large consumers in Vancouver. Some select large industrial consumers were granted rate reductions but still paid higher rates compared to large electricity users in Quebec, Alberta, and British Columbia.
Soaring electricity costs in Ontario have placed a significant financial burden on the manufacturing sector and hampered its competitiveness. Compared to multiple comparable American and Canadian jurisdictions, Ontario has exhibited the most substantial decline in its manufacturing sector over the past decade. Overall, Ontario’s high electricity prices are responsible for approximately 75,000 job losses in the manufacturing sector from 2008 to 2015.
Given the critically important role that affordable energy plays in economic growth and prosperity, the authors urge the Ontario government to pursue meaningful policy reforms aimed at lowering electricity costs for all Ontarians.
Elmira Aliakbari;Kenneth P. Green;Ross McKitrick;Ashley Stedman
Canada Pension Plan’s investment in part of a wind-solar power portfolio seems to ignore a lot of negatives, including the energy poverty rising in Ontario due to electricity bills
Canada Pension Plan contribution rates are rising again, as reported by the Financial Post December 14, 2017: “the contribution rate (i.e., the CPP tax) has increased from 3.6 per cent when the CPP was launched in 1966 to its current rate of 9.9 per cent. It will increase further to 11.9 per cent beginning in 2019.”
The Canada Pension Plan Investment Board (CPPIB) is an active investor, looking for good rates of return without taking “excessive risk.” So they either searched for assets that pay guaranteed above market rates, or were approached by U.S. Power giant NextEra who sold them their Ontario portfolio of 396 MW of wind and solar contracts. CPPIB paid $1.871 million per MW for a total of $741 million CAD and also assumed the debt (US$689 million) attached to the NextEra portfolio. The press release associated with the acquisition had this quote from Bruce Hogg, Managing Director, Head of Power and Renewables: “As power demand grows worldwide and with a focus on accelerating the energy transition, we will continue to seek opportunities to expand our power and renewables portfolio globally.”
Perhaps Mr. Hogg was unaware “power demand” in Ontario has actually fallen from 153.4 TWh in 2004 to 132.1 TWh in 2017 despite an increase in our population of approximately 450,000. He may also be unaware industrial wind turbines create health problems, cause property values to drop and kill birds and bats including those on the endangered species list.
What the CPP acquisition means is Ontario ratepayers will be indirectly contributing additional funds to the CPP without the benefit of reducing either their annual tax burden or increasing their future pension benefits. A “win, win” for CPP and a “lose, lose” for Ontario’s taxpayers. The sole redeeming feature is that the money will stay in Canada instead of flowing elsewhere.
Ironically, the CPP by acquiring and holding those assets will also be showing their support for energy poverty. The Ontario Energy Board (OEB) in their December 2014 report noted: “Using LIM* as a measuring tool, and relying on Statistics Canada household data, Ontario has 713,300 low-income households.” At that point in time the 713,300 households represented almost 16% of residential ratepayers in the province and one should suspect that number has increased over the past three years.
So, one should also wonder why NextEra, headquartered in Florida, sold those assets and their above market returns? The press related to their announcement of the sale speaks volumes: “As discussed during our earnings call in January, we expect the sale of the Canadian portfolio to enable us to recycle capital back into U.S. assets, which benefit from a longer federal income tax shield and a lower effective corporate tax rate, allowing NextEra Energy Partners to retain more CAFD** in the future for every $1 invested.”
No doubt the NextEra sale may be a sign of the future as the Canadian economy has shown serious signs of slowing as taxes rise and foreign investment falls. The bulk of the investment in the renewable energy sector in Ontario came from offshore companies who rushed to take advantage of the above market rates and guaranteed prices offered under the Feed-in-Tariff (FIT) program available under the Green Energy Act.
Those investors will look to cash in on the sale of those assets, so we should expect to see more public and private Canadian pension funds stepping up to purchase them.
*Statistics Canada’s Low-Income Measure is simply defined as half of the median adjusted economic family income.
Government contracts are indeed contracts. In the normal course of events, their terms may be enforced and the Crown held liable for a breach. However, government contracts are not the ironclad agreements they appear to be because governments may change or cancel them by enacting legislation.This paper discusses the means by which governments can make unilateral changes to contracts by statutory enactment.
Legislative supremacy is a central feature of the Canadian system of government. The federal Parliament and provincial legislatures may pass laws of any kind, including laws that change or cancel legally binding agreements, and even if the enactment has the effect of expropriating property or causing hardship to innocent parties who negotiated with government in good faith in entering into the contract in the first place. The powers of legislatures are limited only by the bounds of their constitutional jurisdiction and the existence of constitutional rights. In Canada, there is no constitutional right to compensation for expropriated property.
Just because legislatures can enact an end to a contract does not mean that they should. Using that power erodes confidence in doing business with government, and thus impairs the credit of the Crown and economic conditions in the jurisdiction. On the other hand, if democratically elected governments are to establish their own policies, they require the ability to make unilateral changes to agreements made by previous governments. If they cannot legitimately do so, then their predecessors can control policy decisions beyond the terms of their democratic mandates….
First off, thanks for taking the time to read my last letter to you and getting back to me.
That said, I still have not heard back from Mr. Ballard nor Mr. Thibeault, nor did you answer my two questions.
I acknowledge that my last letter was a tad long and that you may not have had the time to read the whole thing, and as such I am re-asking my two questions and await your response.
1. Given that the timing of the Notice of Posting to the Environmental Registry is completely inappropriate, will you repost the 45-day period to start January 1, 2018?
2. Who is ultimately accountable to the citizens of North Stormont when problems arise during the construction and 20-40 year operational period of the Nation Rise Wind Farm Project? Do we send our bills to the Premier of Ontario, the project developer/owner or to the participating land owners who invited the foreign owned wind developer into the township in the first place?
While waiting for you to answer my two questions, I spent numerous hours between field and office work reading the thousands of pages of EDPR prepared documentation in the off chance that you will not move the end of Christmas Day deadline to submit comments into the MOECC Registry.
What are my conclusions to date, you may ask?
Well, the EDPR-prepared documents are generously sprinkled with hundreds if not thousands of promises to the people, birds and bats and the environment of North Stormont.
For example, EDPR is promising that each turbine will not kill more than 10 bats and 14 birds per year, they will keep turbine noise within the old (not new) MOECC noise guidelines (we’ll hardly hear them like a soft whisper at most) and they will “lightly grade“ the areas where the access roads and lay down areas will go in.
There are two problems with this.
1. EDPR seems to have problems “keeping promises” at least to my wife and me. Perhaps others on my distribution list have had better experiences. EDPR made one promise to me and another to my wife during the so called “consultation meetings” with citizens of North Stormont, and sadly they are zero for two in keeping their promises with us;
2. Your Ministry of Environment and Climate Change (MOECC) does not appear to have the tools, resources, and/or interest to strictly enforce wind turbine companies’ promises. The most recent example of this came to light this past week in the Kincardine area where citizens have lodged numerous complaints about noise emanating from the Enbridge Underwood Wind Project. The turbines have been in place since 2007 and given the number of complaints received since the project start up the MOECC and Enbridge decided to perform a noise audit in 2011. Here comes the head scratcher, we are on the verge of the end of 2017 and the noise audit is still not completed.The MOECC confirmed that the MOECC and the wind project developer have been going back and forth with each other for over six years and they still can’t figure out whether there is a problem or not with noise levels emanating from the turbines. In the meantime citizens within the project area continue to have their lives disrupted because of the turbines.
This is unconscionable in 2018 Ontario.
Ontario is blessed to have an Auditor General that is absolutely committed to rooting out waste and mismanagement in Ontario. An example of this happened again this past week where Ms. Lysyk dropped another bombshell on the Energy File where she reported out that private electricity generators fleeced the rate and taxpayers of Ontario to the tune of some $260 million over the past few years.
The Energy File seems to be in complete and utter disarray.
Again Ms. Wynne I urge you to cancel the Nation Rise Wind Project to avoid further embarrassment to your government and if that is not possible just yet, please allow us to enjoy our Christmas season without the need to continue reading the worthless pile of turbine documents.
I look forward to hearing your answers to my two questions soonest.
Closure rides on the Elder et al v. Town of Falmouth Case
This pending case appeals the building commissioner and the ZBA’s decision wherein both are claimed to have incorrectly interpreted the by-law to allow the issuance of a building permit (Mar 2010) for Wind 2.
The Eilder group’s defense is grounded in a related action by the Court (Drummey v. Falmouth, 87 Mass. App. Ct. 127 (Feb 2015)), wherein Wind 1 required a special permit as part of a comprehensive bylaw scheme to control wind turbine placement and impact in the town. Drummey v. Falmouth was the definitive case forcing then Building Commissioner Eladio Gore to order the town to apply for a special permit for Wind 1. Building Commissioner Gore claimed Wind 2 was not addressed in Drummey v. Falmouth, and was thus exempt from his Wind 1 order.
“As a result of the province’s robust supply situation and flat yearly demand for electricity, the procurement phases of the IESO’s Feed-in-Tariff (FIT) and microFIT programs have come to an end. These programs have been instrumental in helping Ontario establish the clean energy supply mix it has today.”
IESO December 12th, 2017: Ontario’s electricity system ready for winter
Good riddance and don’t let the door hit you on your way out! Now to move onto the next order of business-canceling existing wind power contracts and halting construction of additional projects.