Ontario’s October power bill was $1-billion over market value – wind and solar
Wynne’s billion-dollar hydro boondoggle
7:35 am, November 10th, 2014
TORONTO – For anyone who wants to understand what a complete mess Ontario’s Liberal government has made of our hydro bills, Parker Gallant is must reading.
A retired banking executive, he easily dissects and explains in English the never-ending nonsense the Liberals pump out to justify their green energy financial disaster.
An occasional Sun News Network contributor and newspaper columnist, Parker and Scott Luft, an energy analyst and blogger, published a report last week on energy pricing for Wind Concerns Ontario – an anti-wind turbine group – that was truly alarming.
Titled “October, 2014, Ontario’s breath-taking, record-breaking month for electricity bills,” Parker and Luft reveal that last month, Premier Kathleen Wynne’s Liberal government paid $1 billion more for electricity than the market value of that power.
Put another way, the so-called “Global Adjustment” in Ontario – the difference between the market value of electricity and what it actually cost to produce – topped $1 billion, for the first time, ever.
For the average Ontario household, Parker and Luft note, that will mean an extra charge of about $30 on November’s hydro bill alone, although it won’t appear as a separate item on many residential hydro bills because the Global Adjustment is incorporated into “time of use” rates.
The Liberals say the main reason for the Global Adjustment is to “cover the cost of building new electricity infrastructure … as well as providing conservation and demand response programs.”
But as Parker and Luft explain it:
“The situation has developed as a result of Ontario’s rush to incorporate renewable energy in the form of wind, solar and biomass into the grid, without proper planning on how this new capacity would align with demand.
“The result is that during the spring and fall seasons, when demand is lower, IESO (Independent Electricity System Operator) has a surplus supply capacity of over 100% during many hours of the day. Through the Global Adjustment fund, Ontario’s electricity consumers pay contracted generators to idle or curtail generation of thousands of megawatts.
“In October, wind power generators produced almost 600,000 MWh of electricity at a cost of $81 million and additionally were paid another $11 million for 100,000 MWh that they could have produced, but were asked not to add to the grid.
“Due to the glut of power in October, Ontario sold this power to neighbouring jurisdictions at an average of 4.31 per MWh, or $2.6 million, meaning a loss of almost $90 million for Ontario electricity users.”
Parker and Luft note these costs do not include the amount the government had to pay to the province’s privately-run nuclear operator not to produce electricity, because under the 20-year deals it signed with wind (and solar) operators, it has to buy their power first, meaning other sources have to be reduced when there’s a surplus of wind and solar.
Their advice to the Liberals is the same as energy analyst Tom Adams and University of Guelph economist Ross McKitrick gave in their recent report for the Fraser Institute, What Goes Up.
That is, at least stop making the situation worse by bringing more wind and solar power on line.
As Adams put it: “Wind and solar power systems provide less than 4% of Ontario’s power but account for 20% of the cost paid by Ontarians, yet the government wants to triple the number of wind and solar generators. That’s a good deal for wind and solar producers but a raw deal for consumers.”
(The Liberals insist wind and solar power only account for 8% of the cost of our energy bills — and that they were needed to close down polluting, coal-fired electricity. But that’s absurd because the Liberals didn’t replace coal power with wind and solar, but with nuclear power and natural gas.)
Sadly, the longer the Liberals double down on their green disaster, the faster hydro rates are going to rise.
Even the Liberals acknowledged last year that hydro bills would jump 42% over the next five years.
Now-retired auditor general Jim McCarter produced similar numbers in his 2011 report that was sharply critical of the Liberals’ renewable energy programs, noting green energy initiatives would account for more than half (56%) of a 7.9% annual increase in hydro bills over the next five years.
Hydro rates were bumped up again on Nov. 1 and there’s no relief in sight.
Then again, Al Gore does think the world of the Liberals.