New Ontario Government cancels renewable energy contracts

The official news release includes:

TORONTO — Ontario ratepayers will benefit from $790 million in savings thanks to the Government of Ontario’s decision to cancel and wind down 758 renewable energy contracts, Minister of Energy, Northern Development and Mines Greg Rickford announced today…

All of the cancelled projects have not reached project development milestones. Terminating the projects at this early stage will maximize benefits for ratepayers.

Rickford also confirmed that the government intends to introduce a legislative amendment that, if passed, will protect hydro consumers from any costs incurred from the cancellation. Even after all costs are accounted for, ratepayers can expect to benefit from $790 million in savings from this one decision.

I thought a short post is in order as the incoming mainstream media reports are not informative or in any way helpful.

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the harmful denial of the subsidy label

On May 12th the leader of Ontario’s official opposition party asked the government:

Why should Ontario’s businesses and families be subsidizing our competition in New York and Michigan?

In response, Ontario’s Minister of Energy, Bob Chiarelli said:

“…Any power we sell to the US, to Quebec, to Manitoba, or power they sell us, is surplus power. It’s opportunity power. It’s pure profit…

…The IESO will confirm that, last year, we made a net profit of $350 million—”

That perspective might be defensible in Mr. Chiarelli’s lobbyist-populated world, but it’s a harmful one for Ontario ratepayers.
The Minister might be communicating that with net revenue on net exports of 16.85 million megawatt-hours (MWh), the province netted $350 million of proceeds.[1]
That calculates out to $20.77/MWh.
“[T]he average price of electricity generation in Ontario… in 2015 was $83/MWh,” according to a December 2015 news release from Chiarelli’s Ministry of Energy.Read More »

chuck Farmer, and other procurement suggestions

Ontario’s IESO ineptitude in managing Ontario’s electricity supply is displayed in an article from the Lucknow Sentinel, IESO’s designation of Huron-Kinloss as potential host for green energy projects forces township to reaffirm its no wind turbine stance.

The local council noted a change in the IESO’s classification of the area’s transmission capability in determining where to force more industrial wind turbines (the same change I posted on April 14th)

“We can say that we are not a willing host, but what does that mean at the end of the day? Nothing because the contracts are let out by the IESO,” Twolan said, following the council meeting. “We’ve always said we’re not a willing host. We passed that a long, long time ago, but the new map that came out, it changes all the time and we had no input into that. And it doesn’t matter that we passed that we’re a non-willing host, they can still put that in there.”

Of 5 recent, and totally needless, industrial wind contracts awarded by the IESO, 3 went to communities that had actively announced themselves opposed.

So why the change in status?

Chuck Farmer, the IESO director of stakeholder and public affairs, said…

“I do understand their concern and I do want to stress that this is an assessment of transmission capabilities — so an assessment of the system ability and not a statement of any community stance,” Farmer said in a phone interview on April 27.

He said the redesignation occurred because previous projects slated for the area are now no longer moving forward, which freed up space on the system.

“That creates an indication there maybe room on the transmission system to connect some more projects in the area,” he said.

Farmer said he couldn’t elaborate on the disbanded wind projects previously set for the area.

This doesn’t suggest Farmer is capable of elaborating on any subject.

He uses the same logic as what my friend Parker Gallant calls Lucy math – you plan on spending what you don’t have on something you don’t need, decide you don’t need it after-all, and spend the fictitious savings from the decision on something else you don’t need.

The area is a stupid place for more industrial wind, and, unlike a well-paid IESO drone, I can support my claim.

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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 »

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 »

Wynne government reneges on the promise of the electricity act

Ontario Premier Kathleen Wynne’s government has betrayed 15 years of debt collection from Ontario ratepayers in completely perverting the Electricity Act to increase efforts, begun with Premier McGuinty, to turn the sector into a net subsidizer of government spending.

In the 1999-2000 Annual Report of the Province of Ontario the government of the day laid out the basic principles behind electricity restructuring:

  • Keeping electricity prices in Ontario as low as possible
  • Recovering any stranded debt identified as a result of the restructuring from the electricity sector, and not from taxpayers
  • Maintaining maximum value in the electricity sector until stranded debt is retired or defeased; and
  • Creating a structure where investments are undertaken on a sound commercial basis.

The government of today is carrying on the tradition started by the McGuinty government before it. Rates for winter electricity were announced yesterday and the increase over the previous winter is the highest ever. At over 12.6%, it’s only a little higher than the average of 9% over the past 8 years. While the public generator, Ontario Power Generation, has been a significant contributor to recent price increases, most of the increases came from the contracting of private supply after an Ontario Minister of Finance, Dwight Duncan, specifically planned for using OPG’s largest assets to level pricing: “Fixed prices for a large part of the energy consumed in the province would keep the overall blended price for electricity relatively stable.”

Giving government the ability to contract regardless of cost did not keep prices stable, as subsequent years displayed.

The most recently announced contract may be the most irresponsible yet (it’s one helluva competition). The abandonment of any intent to undertake investments “on a sound commercial basis” is clear in the contracting of 28 megawatts of hydro capacity to be constructed on New Post Creek. Whatever the hidden contracted cost is, it’s enough to justify spending $300 million for 28 MW of capacity. At that price the Darlington refurbishment would justify $41 billion in spending, and the public generators on the Niagara river system would be valued at $26 billion.Read More »

Federal Court rules on validity of Darlington Environmental Assessment – sort of

The Federal Court has released the full ruling on the validity of the environmental assessment that had provided preliminary approval for a new build of nuclear units neighbouring the existing Ontario Power Generation (OPG) Darlington generating station.

The issue was in court due to Greenpeace Canada, Lake Ontario Waterkeeper, Northwatch and Canadian Environmental Law Association – all professional anti-nuclear veterans.  The comrades had celebrated the ruling in a May 15th news release:

“The Federal Court has thrown out the approvals for building new reactors at Darlington.”

Well, not really.

From the ruling:

[394] My specific findings of inadequacies and unreasonableness in the EA Report do not vitiate the whole Report, although it seems to me that some reconsideration and corrective action is required that will allow the Cabinet and s. 37 decision-makers to assess, or re-assess, the whole Project and make their decision accordingly. I have attempted to craft a remedy that will allow this to happen without discarding what appears to me to be the highly competent work accomplished by the Panel.Read More »