Spilling: Ontario’s water taxes and surplus baseload generation

Following a recent post in which I displayed the growth in hours the market failed to produce a positive price for electricity I was advised a much better indication of Ontario having too much committed supply is when the price exceeds the taxes on hydroelectric generators. I’ve since performed some research, and analysis, that do show this is a better methodology for estimating periods of surplus baseload generation (SBG).

The Ontario Ministry of Finance shows two charges levied on hydro-electric (hdyro) generators: property taxes and a water rental charge of 9.5% of “a stations’s gross revenue from annual generation”. The property tax escalates with the production level: 2.5% (of revenues) on the first 50 gigawatt-hours (GWh),  4.5% on the next 350 GWh, 6% on the next 300 GWh, and 26.5% on all annual generation above 700 GWh. This makes the top rate 36% (combining water rental and property tax).

OPG’s hydro generators have a number of rates, but all are between $40 per megawatt-hour (MWh), and $45/MWh. For simplicity, I picked $15/MWh (36% of $41.67/MWh) to query IESO data in order to estimate the percentage of hours  Ontario has experienced surplus baseload generation.Read More »

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Spilling on OPG’s wasted hydro

Ontario continues to waste its water rights on the Niagara river.

I revisited some posts I’ve written on this topic today, and updated data to bring the graphics up to the end of 2015

niagara.png

A very quick refresher to explain this first graphic.

  1. The U.S. and Canada share water rights on the Niagara river. Ontario Power Generation (OPG) runs the Niagara river power plants in Ontario, and there are similar plants on the U.S side (R. Moses Niagara). When I first encountered the issue in 2011, the U.S. side had additional generation because OPG could not get enough water through its turbines to utilize the full allocation.
  2. In March 2013 OPG completed the Niagara tunnel, which was to get more water to it’s turbines. OPG claimed output would increase by 1.6 million megawatt-hours (MWh).
  3. I’ve collected Ontario generation data back to 2010, and compared monthly summaries to the U.S. Energy Information Administration data for the U.S. sites.

The opposite of what should have happened is what has happened, as the gap that had disappeared about the time the tunnel entered service re-emerged, and continues to grow.Read More »

OPG’s strong 2014 results: aka how I made OPG $243 million

This was first posted on my coldaircurrents site  – which I use for posting found items of interest. This post went beyond pointing out OPG’s 2014 results, with enough of an edge I’m double posting it here.

OPG’s final 2014 results have been released and the net income they are reporting is, if my records are correct, the highest since 1998

[Toronto]: – Ontario Power Generation Inc. (OPG or Company) today reported income of $568 million, before extraordinary gain, for 2014 compared to $135 million for 2013. Net income, after extraordinary gain, for 2014 was $811 million, compared to $135 million in 2013.

Let me tell you about extraordinary items.

but first…

There are new business segments for contracted generation (biomass, hydro and gas partnerships) and eliminated business segments (thermal, or fossil fuels, and non-regulated hydro).

I’ve flipped through OPG’s 2014 MANAGEMENT’S DISCUSSION AND ANALYSIS and spotted some things of interest to me, relevant to many things I’ve written.

There’s news in OPG’s reporting that, I’ll just put out there, maybe I should get a nice cheque for.

Read More »