McGuinty hiding report on electricity costs

CBC – The Canadian Press
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The Opposition is demanding that Premier Dalton McGuinty come clean and release a report on future electricity costs amid fears that soaring hydro bills are heading even higher.

The Ontario Energy Board acknowledged in a Sept. 17 letter that it conducted a “preliminary analysis and forecast” of electricity costs, but doesn’t plan on making it public.

The Conservatives, who uncovered the letter, asked McGuinty 10 times in the legislature whether he would make the report public.

But the premier refused to acknowledge the existence of the OEB report and instead kept bringing up the former Tory government’s record on hydro rates.

“The fact of the matter is that they quietly presided over the gradual decay of the electricity system in the province of Ontario,” McGuinty told the legislature.

“They refused to make essential investments in new generation and in new transmission. They refused to work with Ontarians so that we might together conserve electricity and reduce demand.”

But the premier’s refusal to make the report public suggests he’s concealing evidence that hydro rates are going up, said Opposition Leader Tim Hudak.

“There’s got to be a reason why Dalton McGuinty is burying that report,” he said outside the chamber.

“Clearly, rates have already gone through the roof and he’s going to put them up higher. I just wish the premier would be honest, would tell families exactly how much hydro bills are going to go up, and make that report public.”

Duguid unaware of report

Energy Minister Brad Duguid said he wasn’t even aware of the OEB report.

“There are a series of reports we receive, whether it be from the Ontario Energy Board or others in the sector, that make projections as to where costs are going,” he said.

Consumers should have “greater clarity” about future hydro costs once the government releases its 20-year energy plan at the end of December, Duguid said.

Given the heat the Liberals are taking over rising electric bills, NDP energy critic Peter Tabuns said he doubts they’ll release anything that predicts higher rates before next year’s election.

“They want to make sure that between now and voting day they can say whatever they want to whatever crowd they’re in front of,” he said.

Report ‘preliminary and incomplete’

A spokesman for the OEB, which regulates Ontario’s electricity and natural gas sectors, confirmed it isn’t planning to release the report.

“It was work undertaken by staff as part of its ongoing industry monitoring, and wasn’t prepared for any proceeding, consultation or other public forum,” said spokesman Alan Findlay.

“Given its preliminary and incomplete nature, the analysis is not in a thorough or reliable form that would responsibly add to the public’s or the sector’s insights into costs.”

The Liberals have been dogged for weeks over rising home electricity bills, with opposition parties blaming McGuinty’s green energy policies, as well as July’s addition of the HST, for soaring costs.

They say they’re swamped with complaints from homeowners, who’ve already been hit with an extra eight per cent for electricity because of the HST, plus the costs of installing smart meters and moving to expensive time-of-use pricing.

Environmentalists are also warning that consumers may be hit with another rate hike this spring.

Ontario Power Generation has already asked to raise its rates next March to start paying for the re-build of the Darlington nuclear units, said Jack Gibbons of the Ontario Clean Air Alliance.

OPG is seeking a 6.2 per cent rate increase for “everything they want to do, including the re-build,” Gibbons said. For the average residential customer, it would raise their bills by 1.7 per cent, he added.

“It’s unacceptable to consumers to raise your rates for the highest cost and the highest risk option to meet our electricity needs,” Gibbons said.

“Consumers want the government of Ontario to give them new supply that’s clean and green, but at a reasonable cost. And nuclear power doesn’t meet that test. The cost is way too high.”

The province announced in 2006 that it wanted to build two new nuclear reactors to supply electricity, but has yet to sign a contract to proceed with the multi-billion project.

12 thoughts on “McGuinty hiding report on electricity costs

  1. If Dalton wants to dredge up earlier days in Ontario’s electricity history, then so can I:

    Let’s get a handle on this kinda complicated topic.

    In order to do that we have to deal with empirical facts.

    This is the primary failing of current Liberal policy with regards to electrical generation/ distribution in Ontario.

    1) Ontario has never suffered a “blackout” or “brown out” in my life time (48 years) that was caused by inadequate generation capacity. We have always been able to both generate and purchase sufficient power to meet demand. The blackout to which Dalton eludes in 2003 was caused by inadequate maintenance of the distribution network in Ohio made worse by a software bug in that grids system management computer.

    2) All non storm-related blackouts/brown outs in local Ontario grids, like the one in Toronto just last month, have been caused by both maintenance and capacity problems with Ontario’s own power distribution network. NOT lack of generation capacity.

    3) As a result of both conservation and economic downturn, electricity consumption in Ontario has been dropping both steadily and dramatically since the highs reached in 2005. We are now below 2002 levels.

    The observant among you will have noticed that this contradicts Dalton’s assertion that we didn’t have enough power in 2003 but had more then enough at our high consumption mark only two years later.

    4) Today, Ontario’s electricity generation capacity from all conventional sources is 35,000 megawatts. The maximum daily consumption in 2009/2010 was just under 27,000 megawatts reached just this August. Estimated maximum consumption today (Sept 29, 2010) is under 17,000 megawatts (www.theimo.com). With the exception of seasonal highs, we ALREADY have essentially DOUBLE the generating capacity from all conventional sources then we need.

    5) In order to get elected Dalton lied, (surprise, surprise) jumped on the upwelling tide of environmentalism and promised to shut down Ontario’s coal fired plants. Because Ontario for no good reason, hadn’t kept up to date on pollution controls for her coal assets, some of them like Nanticoke, are very polluting. Dalton of course, shut down the most modern, least polluting plants and kept Nanticoke going at full tilt. The results were easily predictable.

    This is the sole reason for vast expenditures on new and massive natural gas generation and The Green Energy Act. All of this abject foolishness could have been avoided if:
    First, we had intelligent people in government concerned about governing instead of power for power’s sake.
    Second, Ontario simply installed modern pollution controls on ALL her coal plants. Unfortunately, none of these two things happened.

    Here are the problem’s Dalton created:

    1) Surplus baseload generation (look it up!) or: Why Bruce power gets paid NOT to produce electricity. (They are not the only ones)

    To be fair, Dalton didn’t actually create this problem he just made it worse. Here is how it works: As vast quantities of electricity cannot be economically stored, it must be used when it is generated. Supply and demand must be closely monitored and matched. This means that
    generation assets must be there to be “dispatched” or not as demand fluctuates. Some assets like wind, solar and yes even nuclear are not “dispatchable”. The availability of wind and solar cannot be predicted and nuclear cannot be readily turned off and on. It takes about a week
    to fire up a Candu. It is the antithesis of wind and solar. Unfortunately, we have such vast nuclear generation in Ontario that it all by itself can provide 100% of baseload requirements.

    Now, one would think that this would be just peachy except for one overriding fact. ITS CHEAP! If you have too much power it is better to pay a small penalty to keep cheap nuclear off the grid than a huge penalty to keep more expensive generation off the grid.

    OK, that makes sense (sort of). However, wind makes this problem go from bad to insane! Any wind on the grid at night must be used as it is generated or the generators must be paid NOT to produce power just like the nuclear guys. EXCEPT: Nuclear is 3.5 cents per kilowatt and wind
    is 13 cents per kilowatt. AND; wind turbines generally produce most of their power at night. So, we pay a nuclear guy 3.5 cents/kwh NOT to produce power, we pay wind 13 cents/kwh NOT to produce power and/or we give this power away or pay to have it taken off our hands.

    This is why Denmark is now paying 45 cents per kilowatt for electricity which Sweden, Norway and Germany generally get for free!

    2) Smart meters and Time of Use (TOU) billing.

    Actually, this is (was) a GOOD IDEA had it been the only thing Dalton did. It may have gone some way to addressing the surplus baseload problem illustrated above thereby reducing the huge monetary losses this creates. Unfortunately, This is at odds with and completely contradictory to the Green Energy Act and Feed In Tariff program for the reasons stated above.

    3) No reliable, efficient generation and distribution.

    Without this, Ontario is screwed forever! The Liberal ad-hoc, vested interest led energy policy is exactly the opposite. In their foolish rush to replace “dirty” coal which was only dirty due to incompetence, they have been building vast new natural gas generation and “alternative” energy.

    The reason I mention all these technologies sort of at the same time is this: Coal can “load follow” more efficiently then natural gas. So much so that in a side-by-side comparison, natural gas is so inefficient that it will produce the same or more CO2 for the same electricity produced at greater cost for both fuel and maintenance. As for natural gas availability… Yes we are told we have lots, mostly “shale gas”. However the hydro-fracturing of underlying rock shales is so hideously harmful to aquifers one must question the environmental wisdom of this pursuit. Wind and solar are useless for the obvious fact that the wind don’t blow and the sun don’t shine predictably. Hydro power is a no brainer except for the rather significant environmental damage
    caused by massive dams. Without water storage, output of “run of the river” installations begins to mimic wind and solar.

    Our current energy mix is perfectly fine and we could have favourably addressed surplus baseload with TOU billing. The resulting savings from not having to give away or pay others to take our surplus power would have paid for this program.

    But no! Stupidly prevails!

    Instead of properly maintaining and upgrading the existing grid and generation assets to ensure reliability, these resources are being redirected to build completely unnecessary new distribution to completely unnecessary new generation.

    The result is unreliable generation, unreliable distribution AND horrendously expensive power!

    Bye, Bye economy!

    Best regards…

    Sean Holt
    sean.holt@sympatico.ca

    914 Larocque Road
    Brightside, Ontario
    RR#4 Lanark, K0G 1K0
    (613) 259-5323

  2. Sean:

    I don’t agree with you on a number of points but nothing of great importance except this…

    http://ontariowindperformance.files.wordpress.com/2010/09/po_fig2_wpyearly2_3wpfull.jpg

    I recently looked at this issue and found that Wind Power is NOT generated mostly at night. It is equally dreadful throughout the day.

    Putting in TOU meters so that we can be shifted towards the hours when renewable power is most available would mean high noon in summer (for solar) and perhaps three PM for wind power — although the peak in output that I see is not that great.

    I don’t believe that the politicians (Liberals) and institutions (Pembina) that drove this fiasco understood much of anything about what they were doing. The other political parties are guilty as well because they did nothing to learn about renewable power and the fiasco that Europe had become — particularly Spain!

    This is what happens when an energy minister with a high school education is given control of a highly technical portfolio. But, at least he would perform better as mayor of Toronto — right?

    This is a truly sad situation.

  3. Bring back the boys-(pre Harris years)who ran the system in the old days,and,ask them what they would suggest.No,that would be too simple,the demand is not there anymore.Too many industries have already downsized,or left Ontario.

  4. Curious article. I checked the letter and it now makes sense
    OPG was asked, but answered that the weren’t aware of the OEB having done the forecast.

    OPG is a supplier. The would not be the appropriate group. One of the issues is whether the OEB, OPA or IESO would be the best group to provide such a forecast.
    Regardless, the article, or Hudak, is incorrect – it’s an OEB document being looked for.

    Sean, a very detailed argument. I agree with David’s assessment, and really the issue of cost, and SBG, is related to procuring supply that can’t be matched to demand, and spending billions of infrastructure to price product by demand.

    I don’t know the basis of your statement, “The maximum daily consumption in 2009/2010 was just under 27,000 megawatts reached just this August. ” If that is from the ieso.csv files, I believe the Ontario Demand figure plus exports – imports would give you that amount of Ontario production – the Total Market figure is Ontario Demand plus what we export, but imports need to be removed to get Ontario production.

    Maximum Ontario Demand was July 8th this year, and just 25075MW at 3 pm (record was the 1st of August, 2006 at 4pm)
    Since Mr. McGuinty likes pointing out what he inherited, I’ll note 2002’s peak was 25414MW on August 13th at 2 pm.

    Maximum Ontario Production (Ontario Demand Plus Exports less Imports) actually did peak this year (since IESO records start in 2002), at about 25818MW (August 31st at 4pm). I see that 35000MW figure a lot – but we’ve never hit 26000 in actual output to the best of my knowledge.

  5. TVO has a Green Energy program at 8PM this Thursday. That’s tomorrow evening.

    Steve Paikin is the host.

  6. If that is a program that has run before, he did note that Industrial Wind Turbines are controversial in rural areas. What there needs to be on TVO is an actual program on Industrial Wind Turbines.
    I hope TVO isn’t funded by CANWEA……..or the Trillium Fund or what ever other organizations have their fingers in a piece of the pie.

  7. It sounds like Tom Adams is joining the show. Check Tom’s site. Maybe something to watch.

  8. I checked the Agenda site at TVO on Tuesday, and the title of the show did make it look like they would be connecting the rapid price escalation to the GEA and other government policies.

    The site has been down ever since.
    Tom Adams’ site says; “We will be discussing smart meters, microFIT rates, and deals with companies such as Samsung among other subjects.”

  9. When talking about cost of electricity why don’t we use the real price.
    My final cost including taxes is now 26 cents/KWH, up from 20 cents.

  10. Hi All:

    Some of you are questioning the details in my initial post so here are some of my sources.

    Total generating capacity in Ontario (www.theimo.com): “There is approximately 35,781 MW of installed generation in Ontario’s electricity market.” “Ontario is capable of importing or exporting approximately 4,600 MW at any one time, depending on system conditions.”

    The most power ever used in a single day in Ontario (top 20) in the last 8 years was 27,005 MW in August 1, 2006. Estimated maximum for summer 2010 is just shy of 26,000MW. (www.theimo.com)
    My figure of 27,000 was irrelevant for arguments sake. We still have vastly more generation supply capacity then demand.

    Imports/exports really don’t figure largely into our generation capacity as we can generally produce more then we have ever needed. Furthermore, I stated as much in the first paragraph my initial post.

    I already addressed the seasonal high consumption issue in my original post. My assertion that we have essentially double the generating capacity then we need for most of the year is accurate.

    TOU was never implemented to support alternative energy. The smart meter program predates the Green Energy Act. The bill to implement the smart meter program was introduced in the legislature
    in November 2005. You can look that one up yourself. The intent was (and still is) to decrease peak use and increase off peak use of power for the reasons I already explained in my initial post. Obviously, this existing program was never even considered in conjunction with the GEA.

    My output of wind at night was a general statement based on a meteorological phenomenon called
    “stable atmosphere” whereby air masses move more parallel to the ground at night then during the
    day as a result of turbulence created by rising air heated by the sun. My apologies for not actually checking historical hourly out-put of Ontario’s turbines.

    My points on shale gas are accurate and widely documented and reported.

    If I’m egregiously in error in any of my other facts, please advise so I won’t repeat those inaccuracies
    in future postings.

    Thank you.

    Sean Holt.

  11. David:

    Look forward to the article. If the information is not yet in the public domain, drop me an email
    (sean.holt@sympatico.ca)

    I didn’t check the max time, the IESO has a chart detailing these things but only by date.

    As for TOU, I still assert it is a generally sound idea. As for the implementation, don’t get me started!

    Best…

    Sean.

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