Tuesday, February 1, 2011

January a Record Month for The Global Adjustment?

This blog has identified the Global Adjustment as a measurement of the market's dysfunction.  Distorting a market price set by transactions between willing buyers and willing sellers (the Hourly Ontario Energy Price), the Global Adjustment is a mechanism to charge Ontario consumers for whatever production, at whatever price, the government has deemed desirable to contract.

The IESO has now provided a 2nd estimate for January’s Global Adjustment – it’s increased to $37.74/MWh (from the first estimate of $28.84) – which is shown as equating to $485.3 million dollars.  If that figure is not substantially revised downwards, it will surpass July 2009’s $466.9 million dollars – and demand in July 2009 was down almost 14% from 2008’s July, while this January demand grew over 2010’s January by about 2%, as expected.

The good news the Premier's office might provide you is Ontario received about $51 million dollars for the 1.54TWh of exports.   
The bad news is we paid suppliers over twice that to produce it.

Net exports were approximately 1.2 TWh (1.54 exports, 0.3 of imports), with an average retail price of approximately 3.3 cents/kWh.  Net exports multiplied by the $37.74/MWh global adjustment are $45.4 million – this is the figure reflecting how much more Ontario consumers would have paid for the same amount of electricity.

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