Sunday, October 15, 2017

A gathering in Prince Edward County

Today in Picton people will assemble at a rally against what has become a 9 turbine industrial wind development in a ecologically sensitive area near Lake Ontario. I won't be attending as it's a 3-4 hour drive away, but I will contribute by arguing the existence of the contract for the location, at this time, is indicative of negligence at Ontario electricity system operator (IESO).

Details at the Prince Edward County Field Naturalists Facebook page
This rally coincides with a legal action launched by the Association to Protect Prince Edward County (APPEC). 
APPEC has commenced legal proceedings naming the Independent Electricity Operator (IESO) and WPD White Pines Wind Inc. (WPD) as respondents. APPEC alleges that the Feed-In-Tariff (FIT) contract between the IESO and WPD should have been terminated as soon as it became evident that WPD would be unable or incapable of fulfilling the FIT contract terms. These FIT contract terms have been made publicly available and are well known.
In 2010, a FIT contract for 60MW wind energy project to be operational within three (3) years was offered by the Ontario Power Authority (now the IESO) to WPD. The contract allowed for termination if the project was not able to deliver at least 75% of the contracted power.  -APPEC (on Facebook)
The inability to deliver 75% of contracted capacity is but one of the reasons WPD cannot now fulfill their end of the feed-in tariff contract.

Thursday, October 12, 2017

Site C'ing: BC's electricity adventure

Site C is a hydroelectric project in British Columbia that may soon to be cancelled.

The commentary surrounding the Site C project has been driven by political posturing, and a recent change in government is therefore likely to end, at least temporarily suspend, the project. The situation is worth commenting on from afar because while it's B.C. today, in another time and other places some different - and many of the same - people will be discussing the merits of big, public, baseload power projects and small, private, sporadic power projects.
"BC Hydro’s Site C Clean Energy Project will be a third dam and hydroelectric generating station on the Peace River in northeast B.C. It will provide 1,100 megawatts (MW) of capacity, and produce about 5,100 gigawatt hours (GWh) of electricity each year..."   BC Hydro
I have 4 questions I wish to address in discussing the future of Site C:
  1. Will there be a need for capacity?
  2. Will there be a need for energy?
  3. What are the costs and benefits of a Power Purchase Agreements (PPAs) with Independent Power Producers (IPPs)?
  4. What are the costs and benefits of publicly owned generation assets
While Site C would have a reservoir (9,300 hectares), the main energy store for the system would remain the Williston Reservoir (177,300 hectares) upstream on the same system. It's not surprising the site would generate 5,100 GWh annually as the implied 53% capacity factor[1] is essentially what the B.C. hydroelectric fleet achieves annually. [2]

Many of those claiming Site C won't be necessary comically follow that argument up with a list of alternative generation technologies. To evaluate the alternatives it is first necessary to determine the value Site C may provide.

B.C. currently has adequate supply - it's peak "load" occurred early in 2017, and the province was a net exporter of power during that peak (as it is during most peaks). BC Hydro's resource planning anticipates the ability to meet the peaks to become less certain, and disappear around 2023. The need for additional annual energy is predicted to come later. The difference between the ability to meet peaks and the ability to provide enough energy throughout the year is important.
Graphics from BC Hydro. Links to view source graphics: Capacity and Energy

Friday, September 29, 2017

Ontario Electricity Operator brags of ICI subsidy, continues spending on wind experiment

7 days after news broke of a lawsuit claiming the global adjustment charge is “an unconstitutional tax, not a valid regulatory charge,” Ontario's electricity system operator (IESO) issued a news release congratulating their generators and certain consumers:
Ontario’s peak demand days typically don’t happen at this time of the year. Yet with hot weather persisting, and in spite of summer’s end last week, the province experienced new annual peaks this week of 21,786 MW on Monday and 21,542 MW on Tuesday.
Generators did their part to help meet the peaks, as well as Ontario’s consumers participating in the Industrial Conservation Initiative (ICI) and other demand response initiatives.
According to preliminary analysis, consumers participating in the ICI are estimated to have reduced peak demand by over 1,500 MW this week. By reducing demand during peak periods, ICI participants can both reduce their electricity costs while helping to defer the need for investments in new electricity infrastructure that may otherwise be needed.
They didn't mention if the 21,783 MW remains 2017's annual peak it will be a record annual low (the 3rd one recorded in the past 4 years).


Tuesday, September 26, 2017

Global Adjustment mechanism again headed to court.

Jeff Zochodne reports that a,
August lawsuit filed by National Steel Car (NSC) believes the revenue the IESO collects for the global adjustment, from the company “and others,” should be declared “an unconstitutional tax, not a valid regulatory charge.”
The company gives numerous reasons, including that the global adjustment allegedly “redistributes wealth from the consumers of electricity in Ontario to, among others, the generators of renewable electricity.”
I don't like their chances, partially because I doubt the quality of Ontario's courts, but I will discuss reasons the lawsuit has a chance at succeeding to demonstrate the need for changes in Ontario's too pliable electricity pricing structures.:
  • pricing includes the full cost of current supply despite the intent of the Green Energy Act to grow value outside of Ontario's electricity sector, 
  • the courts have already ruled the global adjustment structure to be a subsidy of one group of consumers, at the expense of all others,
  • only certain consumers were exempted, at the end of 2015, from the Debt Retirement charge, and,
  • another group of consumers has now been rewarded with a "Fair Hydro Plan"
The global adjustment mechanism being challenged was introduced in 2005 to ensure the full costs of electricity supply were paid by consumers of electricity (Section 25.33 (1) of the Electricity Act 1998) - it was intended to be the difference between what suppliers were paid through contracts (or regulated prices) and what the market valued supply at. In half of the first 26 months of the global adjustment the line item was a credit on consumer bills, but it's been a charge in all but one month since 2008.

Saturday, September 9, 2017

Ontario Goes to Pot

"You have to recognize the culture of the province has changed, the economic life of the province has changed, and opinion and attitudes have definitely changed."
Mississauga South's C. Sousa, announced what the government was not doing the other day.
“We are not encouraging the consumption of cannabis. That would be a mistake.”
The presumably serious statement came as the government announced a new neighbourhood drug dealer.


The press release - from the government's main legal Minister - makes it abundantly clear the provincial government is gearing up to sell cannabis to people it doesn't approve of due to the actions of the federal government.
In response to the federal government's plan to legalize cannabis by July 2018, Ontario is committing to a safe and sensible framework to govern the lawful use and retail of recreational cannabis as a carefully controlled substance within the province.
The mock press probably got this story right.

from the Beaverton


Saturday, August 26, 2017

regarding Ontario Electricity Generation and Costs, 2007 - 2015

This week I was handed some data indicating, by supply type, electricity generation and costs in Ontario. The data was a hard copy response of the IESO to a freedom of information request. There's nothing in the data that will surprise readers of my work, but perhaps it's time for a refresher, as today I read one flip comment by a mainstream journalist, joking they'd like to see "Ontario families can no longer afford skyrocketing nuke costs," and an opinion piece on the public broadcaster's site which included:
...as data from the [International] Electricity System Operator clearly shows (sic), it’s nuclear and gas plants that are responsible for the lion’s share of increases. 
"Clearly."
It is time for a refresher.

Some background on the data I'll share. The 2015 Annual Report from the office of The Auditor General of Ontario included a chapter on "Electricity Power System Planning." The entire chapter contained a wealth of information and continues to be cited frequently, but for those chasing hard numbers one particular star of the work was a figure revealing the quantity, and cost, of generation from various sources, inclusive of not only the larger generators frequently reported by the IESO (the "I" is not for international, but it is the electricity system operator), but also the seldom reported distributed generation - which is where most solar exists.

The freedom-of-information requests handed to me included this request:
Breakdown of Generation Cost by Energy Sources for the years 2007, 2008, 2009, 2010, 2011, 2012, 2013 and 2015. The Breakdown for 2014, which was included in the Annual Report of the Auditor General of Ontario, is attached as reference.
The data table that follows responds fully with the request - I have only reformatted it:

Thursday, August 10, 2017

Ontario may contract more imports from Quebec - badly

On the morning of Tuesday August 8th La Presse published an article reporting on a draft contract which would see Ontario pay Quebec approximately $500 million a year for the ability to import 8 terawatt-hours of electricity. By late morning the office of Ontario's energy minister denied an agreement was reached, and the ruling Liberal party's press office was slamming the opposition party for "spreading misinformation."
Perhaps nothing will come of the proposal, but it's worth noting what constituency it is designed to appease, how that appeasement impacted the draft agreement, and the concerns all Ontarians should have with the processes, and institutions, involved in the province's electricity sector.

A timeline surrounding the leaked draft document dated June 22, 2017:

  • during May Ontario's Minister of Energy GlennThibeault and this Quebec counterpart, Pierre Arcand, discuss "the possibility of further enhancing electricity trade in order to cost-effectively improve our respective electricity systems," [source]
  • La Presse's report, translated on Google Chrome, includes, "Thibeault sent a letter to his Quebec counterpart...on June 13 to explore the possibility of entering into a new long-term agreement to purchase electricity",
  • June 20th Peter Gregg "takes on the role of IESO President and CEO",
  • June 22nd Hydro-Quebec's Steve Demers writes a "Dear Peter" letter to the new head of Ontario's system operator introducing a written proposal valid until July 14,
  • July 27 Ontario's Thibeault writes the June offer was "inconsistent with our discussions in May", notes following discussions between staffs of Premier's Couillard and Wynne HQ "would be instructed to work collaboratively with IESO on enhancing electricity trade..."

I think Thibeault's July 27th is very good. To communicate why, I will focus on a short technical quote from the leaked draft agreement which explains the shortcomings of Hydro-Quebec's proposal. 

First I'll note 8 TWh, the proposed annual import level, is only slightly higher than the total annual imports into Ontario from Quebec (much of which will be wheeled through to New York). There was some noise about whether the amounts were feasible with existing infrastructure: they are.



Monday, July 3, 2017

Premier Wynne's neglecting business

"Small business optimism in Ontario took a nosedive in June."

So begins the Ontario section of the Business Barometer from the Canadian Federation of Independent Business (CFIB). The members of the CFIB have legitimate reasons to be pessimistic. In this post I will demonstrate the indifference to the needs of employers in the current Ontario government's electricity policies, with a particular focus on the unfairness of the so-called Fair Hydro Plan.

I recently spoke with Jocelyn Bamford of the Coalition of Concerned Manufacturers. The group has been in the press due to electricity cost concerns, but other concerns are newly presented to these employers, by the provincial government. I perceive 3 primary concerns:
  1. Electricity
  2. Cap and Trade
  3. Labour costs
I'll begin with electricity. 

As context for the following information on rates in Toronto, the U.S. Energy Information Administration (EIA). American data shows U.S. residential consumers pay 86% more for a unit of electricity than industrial consumers, and about 20% more then commercial consumers. The definitions of groups don't work well in comparing to Toronto, but note small consumers pay, on average, the most per unit, and largest the least. 

On July 1st rates dropped for Ontario consumers charged on Regulated Price Plans (RPP), due to legislation dubbed a "Fair Hydro Plan" (FHP). I pulled average consumption levels for residential and other customers of Toronto Hydro from the spreadsheet accompanying the Ontario Energy Board (OEB) 2015 Annual Yearbook of Electricity Distributors, calculated average monthly figures and fed those into the OEB's Bill Calculator for Toronto Hydro customers. For non-RPP consumers (Class A and B) I found a Toronto Hydro presentation considering monthly figures for one consumer (on slides 19 and 20). There are some issues the presentation data, but the 18 cents/kWh for Class B consumers is what I expected.


Not only do "Class B" industrial users not enjoy preferential electricity pricing, they probably pay more than the average Toronto household. This is exceptionally rare. I can find instances of American utilities charging industrial consumers more than residential ones, but nothing for a decade among utilities the size of Toronto Hydro with one notable exception: Niagara Mohawk Power Corp. [1] Ontarians might be interested in knowing the territory of that utility includes the American cousins of Niagara and St. Lawrence river power plants (in Canada, Beck and Saunders). Legal cases have established set uses for the power produced by the big public hydroelectric plants in the New York. Regardless, it's been 6 years since even that utility saw residential rates lower than industrial ones.