January's final numbers for the Ontario electricity market are a monthly average (weighted) Hourly Ontario Energy Price (HOEP) of $65.43/MWh (the highest since December 2005) plus a global adjustment rate (class B) of $12.61/MWh: the total, $78.04/MWh, is down from $81.58 in January 2013.
While the total commodity rate hasn't changed much, the changed composition of the price, a lower global adjustment charge and a higher market rate (HOEP), makes a big difference to Ontario Power Generation (OPG). Here's how Parker Gallant and I put it last May:
The big lag on OPG’s earnings has been the unregulated hydroelectric segment. It contributed more than $500-million or 46% of OPG’s pre-tax generation in 2008. Now it loses money. The reason for the loss is simple: OPG’s non-regulated hydro-electric assets are the only significant generation in Ontario exposed to the market price of electricity, which has collapsed under the McGuinty Liberal green energy manipulations. OPG’s non-regulated generation has fallen by 31% since 2008, revenue by 58%.In 2014, coal-fired generation is removed from the market place, and suddenly the value of production from OPG's non-regulated hydroelectric assets is receiving ~$71/MWh, instead of the $33 it received for the corresponding period in 2013. I estimate the difference is nearly $90 million in revenue to OPG, and we are only 7 weeks into the first year without coal.