Ontario power prices go below zero

Delicate talks are currently under way with wind generators to see if there are ways to limit the flow of wind power onto the grid during periods of surplus.

John Spears Business Reporter, Toronto Star

Spring is here, the sap is rising – and Ontario is giving away electricity. That may come as news to householders, who had watched bills crawl steadily higher until the province took the edge off by awarding a 10 per cent discount starting Jan. 1.

But the combination of low demand and gushing rivers has driven prices lower than zero at certain times of day over the past week.

For example:

On Monday, prices dipped below zero for five hours during the night, going as low as minus 12.2 cents a kilowatt hour.

On Sunday, prices were also negative for five hours, dipping to minus 12.8 cents a kilowatt hour at the lowest.

The price fell to minus 2.2 cents a kilowatt hour for an hour on Saturday.

The negative prices, unfortunately, do not mean that householders will get a refund or a credit on their next bill.

Residents are generally locked in to regulated prices, or time of use rates. Others are committed to fixed prices under retail contracts, which don’t vary as market prices rise and fall.

But larger users, generally businesses, who are charged the market rate for electricity, can actually receive a credit for the power they use when prices are below zero.

So can neighbouring states and provinces, which trade power back and forth with Ontario.

Low prices are common at this time of year, says Terry Young, vice president of the Independent Electricity System Operator, which runs the province’s power market.

Temperatures are moderate, so there’s low demand for heating and air conditioning. Demand on Monday was a low as 11,746 megawatts – less than half what it would be on a hot summer day or a cold winter night.

At the same time, the spring run-off has filled rivers and reservoirs so hydro-electric production is high. Nuclear plants run close to full capacity all the time and can’t be scaled back, so surpluses can develop.

Surplus power and negative prices can be an opportunity for businesses that can boost production when the price plummets, said Young.

“There are customers who can respond to this,” he said.

Wind is also increasingly a wild card in Ontario’s power system. It wasn’t a huge factor over the weekend, but windy weather did help push Ontario into a surplus position in January.

A report has warned that if no action is taken Ontario could have surplus power on its hands one day out of every seven by 2013. (The surpluses would likely disappear within a few years, as the province starts shutting down nuclear reactors for major overhauls.)

Delicate talks are currently under way with wind generators to see if there are ways to limit the flow of wind power onto the grid during periods of surplus.

Currently, all wind power flows onto the system and most generators receive a fixed price of 13.5 cents a kilowatt hour.

Other generators with contracts are also paid the contract price, despite the zero market price. To make up the difference, customers pay “global adjustment,” a surcharge on the energy portion of their bill.

5 thoughts on “Ontario power prices go below zero

  1. Why aren’t we getting free power?……stupid question?………….give me a stupid answer!

  2. Ah…… the law of unintended consequences. What a country!

  3. 92% of our supply is contracted in advance, one way or another, and spring hardly has any hours in the other 8%.

    I must note this morning the price didn’t go negative, but all 4 Bruce B units dropped down output levels. The power not produced is probably ‘deemed’ generation, meaning we’ll pay the Bruce floor price of 4.5 instead of paying to get rid of it in addition to paying 4.5 cents for it.
    The Star article’s talk about ‘delicate talks’ with the wind industry is a nonsensical spin. The talks are about paying wind for ‘deemed’ generation the same way Bruce is – the expense is more, because they are developing a system to measure what turbines would have produced, if we could accept the output.
    The talks are about how to stupidly continue procuring supply, but with the foresight to make sure you can pay for electricity you can’t accept on the grid.

    Surplus baseload generation has been consistently forecast for about 30% of the time this spring.
    http://ieso.ca/imoweb/marketdata/sbg.asp

  4. Negative pricing is a nice way to say “getting hosed” or “losing our shirt”. When there is negative pricing we are paying for power we don’t need and then paying to get rid of it. This double expense is then up to us to pay. Reducing this expensive practice should be a priority. Shutting down wind turbines can create more problems with stray voltage if the surging wind power not to go on the grid is pumped into the ground. Grand scheme that would be. Stop wasting money on building wind turbines is the best plan. If nuclear goes down wind, no matter how IWTs are built they can never provide much power, not 24/7 and not without backup of equal MW capacity. If there is no plan to replace nuclear with something on demand we will be in the dark and still paying for it.

  5. Just wanting to say: To everyone in Haldimand County and surrounding areas, that want to voice their cares, concerns, as well as deep frustration on the issues of wind turbines……Please come out to the two meetings hosted by Peter Grosvener, and his Haldimand Wind Concerns team to be held MONDAY APRIL 19th @1:00pm at the TOWN OF HALDIMAND COUNCIL CHAMBERS. This is one meeting NO ONE with cares and concerns about these said turbines can afford to miss. Represenatives from Next Era and I believe Summer Haven, and Samsung are to be present at this meeting, so bring all your cares, concerns, signs, and most importantly…….your voices, and we, as a whole can show these Mega Conglomerants that as residents of Haldimand County……..WE DO NOT want their “eyesore” wind turbines on OUR FARMLAND!!! Also, I must add, on TUESDAY APRIL 19th @ 7:00pm at the Cayuga Secondary School, (54 Muncie street North 54 Hyway) there is to be a general public educational seminar/meeting with guest speakers/represenitives from areas where these turbines have been erected, and the ill effects they have on people’s health, livelyhood, welfare, wildlife etc. So please attend if you can!! One more further note, I just want to commend Peter Grosvenor and his “team” for all their dedication, and vast hours of hard work, they have put into these meetings, informing not only our mayor and council, but all residents of Haldimand County and surrounding areas on the REAL TRUTH of these wind turbines!! GREAT JOB People…….I’m proud to be part of your group!!! Thanks Again…….Mr. ROGER L ARNOLD…….Fisherville (HALDIMAND COUNTY)

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