IESO reports show failure to address systemic changes

Yesterday Ontario’s system operator released a number of reports. Personally these reports provide opportunities to check the performance of the system compared to my expectations, and estimates, and they also provide an indication of how well the IESO adjusted to taking over the responsibilities of the former Ontario Power Authority (OPA) after 2014.

The data released includes:

  • Updated Ontario Energy Report website with 2016 1st quarter information, with related electricity report (.pdf), and data file (.xlsx)
  • 2016 Q1 Progress Report on Contracted Electricity Supply (.pdf)
  • 18 month outlook (.pdf) and related date file (.xlsx)

On first flip through the reports, the graphic that most caught my eye was the 18-month outlook’s “Table 4.1 Existing Generation Capacity as of…” This table shows not only what the IESO considers the capacity, by fuel type, participating in their market, but also what I will call “Capacity Value” and they call “Forecast Capability at Outlook Peak.” This is an important number because it’s used to measure the system’s ability to meet anticipated peak demand. The numbers that caught my attention were a 280 megawatt (MW) capacity of solar, with the forecast capability at peak of 28 MW.  The 10% capacity value that indicates is sharply reduced from the 18 month forecast of June 2015.

IESOoutlookChange.PNG

Let’s ignore the low installed value for solar for a fleeting moment, and concentrate on the reduced capacity value. This June’s 18 month report explains it:Read More »

Murray’s spark and the knowledge gap

Ontario’s Minister of the environment and Climate Change delivered a speech at the Economic Cub today which followed a report in the Globe and Mail on a leaked draft document featuring his government’s plan to create a new body with a sweeping mandate to overhaul energy use in the province.

The writer of the article in the Globe, Adrian Morrow, tweeted live from the speech, including:

  • “Please stop buying internal combustion engine cars,” Murray exhorts his audience. “Next time you buy a car, go electric.”

  • [Minister] says auto execs tell him switch to electric cars “isn’t going to work. But they have no alternative”

Somebody should remind the Minister about a number of things, but particularly that his government just recently incentivized Toyota to move off of electricity from Ontario’s relatively clean grid to produce it’s own electricity, from natural gas.

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The world’s worst electricity market

Forbes opens an article titled Ontario’s High Electricity Prices Are Bad For Business with this quote from Pierre-Olivier Pineau, Chair of Energy Sector Management at the University of Montreal:

“Ontario is probably the worst electricity market in the world”

Friday, April 8th, Ontario’s market provided more evidence supporting that premise.

This tale doesn’t involve surplus “baseload” or huge wind output or even particularly low demand. This tale involves the price of natural gas and the Ontario market’s inability to recover even that small fuel cost.

 

April8

The closing price of natural gas on the Dawn hub (in Ontario) on April 8 was $2.68/mcf. My quick estimation just multiplies that by 7.5 to calculate fuel cost of producing one megawatt-hour of electricity: about $20/MWh.

April 8th, like all days, saw most natural gas fueled electricity produced by non-utility generators, with 3 exceptions: Halton Hills, St. Clair and Thorld generating stations also operated, and until hour 19 (7-8 pm), they all generated electricity well below the fuel cost of generating electricity.Read More »

Notes on IESO Supply/Demand outlook to 2035

This post originally appeared on my tumblr account last Friday night.

I’ve flipped through a slide deck Ontario’s electricity system operator, the IESO, has posted prior to insiders meeting March 23rd to discuss how the market should be manipulated in the future.

I’m going to run off some comments on the Preliminary Outlook and Discussion: Ontario Supply/Demand Balance to 2035 slides here.

That first point may sound flip, but if anybody detects a hint of the implication a market signal could trigger economic actors to enter, or exit, the market for electricity generation in the province, please let me know. For me the headline is this is a central planning document which would go nicely with a call to return to a unified public Ontario Hydro model.

After 14 years Ontario neither has a competitive market nor does it demonstrate any learning of what that is and how it might be accomplished.

First, for no particular reason, I’ll note slide 23 – which struck me due to its display of possible emissions, including those from imports. Ontario almost exclusively imports from essentially emissions-free Quebec. In addition to today’s healthy trade, anti-nuclear activists continue to tout Quebec imports as an option to replace the Darlington Nuclear Power Plant. I’ve written Ontario’s electricity future isn’t this Quebec Diversion, and this chart indicates the IESO is open to imports from elsewhere to meet much smaller needs than Darlington’s closure would necessitate.

image

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Wynne government reveals unintelligent carbon pricing

The press release begins:

To build on the work already underway to fight the effects of climate change, Ontario is laying a foundation to join the biggest carbon market in North America by introducing new legislation today that, if passed, would ensure that proceeds from the province’s cap and trade system are transparently reinvested into green projects and actions that will reduce greenhouse gas pollution.

There’s no shortage of people railing against any tax, but I’m not vehemently opposed to a carbon tax/price. Stéphane Dion launched his appeal for his Green Shift policy during 2008’s election campaign with:

The Liberal Green Shift plan is as powerful as it is simple: We will cut taxes on those things we all want more of such as income, investment and innovation. And we will shift those taxes to what we all want less of: pollution, greenhouse gas emissions and waste. 

I wasn’t opposed to that – I didn’t know it would accomplish much of anything, but a carbon tax instead of a payroll tax, or a beer tax, is not something I would get too worked up about. However, I have written on two objections to a carbon tax: the inability to price externalities, and the funding of thoughtless spending with revenues.

In stating,  “proceeds from the province’s cap and trade system are transparently reinvested into green projects ,” the Wynne government loses my confidence in their scheme.Read More »

Better Guardians needed for Ontario’s Electricity Sector

Retired Toronto Hydro employees called on agencies mandated to protect the public interest to investigate malpractice at Toronto Hydro only to be stonewalled.

Tom Adams’ Ontario Electricity Regulation Crisis Report Part 125 Guest Post: Stonewalled by Guardians demands reading – it’s about Toronto Hydro, but I fear its applicable to most things connected with Toronto.

My interests may be peaked as the guest post is co-written by Paul Kahnert. Adams writes:

On a personal note, some readers might recall that I had a long history as an advocate for the break-up and privatization of Ontario Hydro. The most articulate and energetic advocate for public power on the other side of that debate was Paul Kahnert, then a union activist with CUPE Local 1 and a Toronto Hydro employee. My adversarial engagement against Mr. Kahnert arose from his role as the spokesperson for the Ontario Electricity Coalition whose provincial campaign and court case stopped the sale of Hydro One in April of 2002.

Jump forward to 2015.

As I came to realize that Fiona Crean, then the City Ombudsman (now the Hydro One Ombudsman), was stonewalling my request for an investigation of the Union Street blackout and other major events of operational failure due to Toronto Hydro’s negligence after Crean lead me on, I also learned that Mr. Kahnert was spearheading a similar initiative. If you compare the timing of the Kahnert/Grant initiatives with my posts 122, 123 and 124 of this series, you will see that I was, in fact, following in their footsteps. Although we were familiar to each other previously, it wasn’t until this event that Mr. Kahnert and I realized that we were in many ways kindred spirits, sharing many objectives for an electricity future Toronto can be proud of. As we have become friends, Mr. Kahnert never tires of reminding me that consumers were far better off before the break-up of Ontario Hydro than they are now. He’s right.

This is how adults should act. They exchange ideas and communicate with respect. I do not know Paul Kahnert, but I came into communication with Tom Adams arguing pro-nuclear positions, and I’m very grateful I did.Read More »

TVO’s Paikin chooses to be a reason “why rates keep rising”

It took Steve Paikin 4 seconds to mislead the viewers of Ontario’s public broadcaster last night.

“Auditor General Bonnie Lysyk’s year-end report found that Ontarians overpaid for electricity by 37 billion dollars. ” – podcast

No, The Auditor General’s year-end report stated, correctly:

Global Adjustment fees, which are the excess payments to generators over the market price, amounted to $37 billion from 2006 to 2014

Should this confuse Mr. Paikin?

The electricity issue is not a a new one in Ontario and the global adjustment, while complex in some respects, does essentially refer to the difference between what a generator is paid, by contract (say $100 per unit), and what the market valued that power at (say $20 per unit).

… “Joining us now to explore why rates keep rising and  other mysteries of the energy file…”

Of a 3 person panel on Paikin’s show, one has a history of distracting people from understanding Ontario’s energy file, and another is actively paid by the government in multiple roles.

Martin Regg Cohn has been the Queen’s Park propagandist at the Toronto Star for long enough to have seen 3 annual auditor general reports critical of policies in the electricity sector. Of the 2011 Report he wrote:

Auditor’s aren’t infallible. This report is sloppy in its reliance on questionable foreign studies that claim every green job costs three or four jobs elsewhere when rates rise. These studies have long been discredited for their dubious methodologies and funding

Regg Cohn responded to the Auditor’s 2014 report by producing a distraction the morning of the report’s release.

Thanks to a whistleblower, we now have the secret details of how Ontarians are being hosed by The Beer Store…

This year Regg Cohn’s response to the 2015  AG report included the irrelevant but ominous:

… who watches the watchdog? Who audits the auditor to determine if Lysyk’s $16.5-million office budget delivers value for money?

$16.5 million is not a big worry among Ontario’s electricity consumers, who saw about $2 billion in charges added to their 2015 bills through the cost shifting of the global adjustment (the cost shifting is not discussed as it is complicated).

The second panel member was lawyer Lisa DeMarco. DeMarco’s attributes include:

These attributes don’t necessitate her being evil, but they do make Paikin’s first questions to her ridiculous:

  1. Do you think [Lysyk’s] criticisms are valid?
  2. So she got it all right except for all the things she forgot?

DeMarco produced pop platitudes predictably.

The third panel member was Brady Yauch, and I’m a fan of his, so I won’t dwell beyond advising all to follow the Consumer Policy Institute blog.

I don’t recommend listening to the show, but I did want to address the most blatant falsehoods presented.Read More »

nutter McGuinty attempts to stem criticism of electricity costs

Today the Globe and Mail has posted an article by Ontario’s former Premier, and now seemingly insane, Dalton McGuinty.

Here’s one thing the asshat writes which I can clearly state is a lie:

We also invested more than $21-billion in new generation – including doubling our output from Niagara Falls…

I’ve demonstrate in a couple of articles, most recently in A line and the race for expensive electricity, generation hasn’t significantly increased at the Niagara Falls generating station since the McGuinty era boring project completed.

on_ny_hydro

Not only are the results of McGuinty’s bore imperceptible, OPG’s most recent quarterly report indicated 1.9 terawatt-hours (TWh) of curtailed hydro supply in the first 9 months of 2015. In green measures I think that would be reported as enough to power 200,000 homes for a year.

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finance minister claims he could be worse

a primer for yesterday’s News Release from Ontario’s Ministry of Finance

The Office of the Auditor General of Ontario reported on the Ontario government’s flippant disinterest in accounting for the Debt Retirement Charge (DRC) in its 2011 Annual Report:

Given that the DRC has been collected from electricity consumers for almost a decade and that more than $8 billion in DRC revenue has been collected during that time, our view is that the Minister should make a formal determination of the outstanding amount of the residual stranded debt in the near future and make this determination public.

Subsequently, the Ontario budget of 2012 included a section on the Residual Stranded Debt – which the DRC was introduced to retire:

residual stranded debt is estimated to be $5.8 billion as at March 31, 2011… the residual stranded debt is estimated to be $4.5 billion as at March 31, 2012. Residual stranded debt is estimated to further decline to $3.6 billion as at March 31, 2013.

“$3.6 billion as at March 31, 2013”

The next budget knew less, reporting the $4.5 billion as of March 31, 2012, ignoring March 31, 2013 and preparing to extend the DRC as simply a tax with:Read More »

This Week: Idiots in Training

The government issued a news release on Thursday, as Hydro One was being sold, about it’s next great idea.

Ontario has appointed the Honourable David Collenette as a special advisor to assist the province in bringing high-speed rail to the Windsor, London, Kitchener-Waterloo, and Toronto corridor…

High-speed rail will improve travel options, reduce travel times and support economic development throughout the southwest corridor and across the province. It will also provide an opportunity to explore new partnerships between business and government, as well as new technologies.

Serving in the 3 consecutive mandates of the Chretien years, Mr. Collenette has experience in passing Clarity Act.

I can’t think of other definite achievements of those governments, but signing of the Kyoto accord to reduce emissions of greenhouse gases, but then increasing them instead, was really quite something.

Presumably this high-speed rail “corridor” goes from Toronto to Windsor.

The last time I was in Toronto’s Undone Station (its main train station) was two years ago. The experience was such that I’m unlikely to return.

I am from Mississauga, so I’ll try to think of the corridor as running from Mississauga to Windsor.

Being from Mississauga, I’m pretty sure not many there are looking to go to Windsor.

and

Being from Mississauga, I’m extremely confident not many from anywhere else in the province want to go to Mississauga.

The extraordinarily ridiculous thing is the belligerent ignorance, and/or outright cowardice, in considering this route a priority.Read More »