Ontario and Quebec announced an electricity agreement guaranteeing Ontario 14 million megawatts-hours of imports from Quebec over the next 7 years. Compared to Ontario's other electricity contracts, this deal looks attractive at first glance. Looking closer the deal is less attractive,and putting the deal in the context of Ontario's move away from public power, at cost, to what was intended to be a competitive market system, it may be the most ridiculous contract of all.
The agreement, according to Ontario's press release, is for:
- energy capacity,
- trading electricity, and
- energy storage.
The capacity arrangement, securing rights to supply for peak demand hours, is technically convenient. Quebec has a very high winter peak demand, due to electric heating. They have a system designed to do that - but more capacity on the coldest days is desirable. Ontario's demand peak is usually in summer - and more capacity for that is desirable. Since April 2011 I've captured hourly intertie movements - and looking at each subsequent season's top 10 daily peak hours, its evident Ontario is a net importer from Quebec during the highest demand summer days, and usually an exporter during the highest demand winter days. While this relationship has existed, and would continue to exist, without an agreement, there are capacity reserve tests requirements enforced by the North American Electric Reliability Corporation (NERC), and this formal agreement should be useful in meeting those requirements.
Increased electricity ties with Quebec have long been recognized as having benefits. Significantly, late in 2006 an agreement was made to expand the connections between the two provinces by 1,250 megawatts, and the completion of the work allowed for greater trade by 2009.