Sunday, April 13, 2014

LTEP 2013: The Liberals' Temporary Electricity Ploy

Ontario's short-term government announced a Long-Term Energy Plan (LTEP) in December, which they dubbed "Achieving Balance."  The well-written document has some promising language regarding cost control and flexibility, but is vague on how all demand situations will have supply to match.
The events of the past winter made it clear supply shortfalls are, in planning terms, imminent.  The LTEP is a flawed document in electricity planning, but it's a much worse if viewed as an "energy" plan.  It is a political document that doesn't foresee a comprehensive planning role for the Ontario Power Authority, tasked in the Electricity Act with producing an Integrated Power System Plan (IPSP) - presumably free from the glare of the political spotlight.
 "Achieving Balance" is a political document which ignores opportunities to leverage the low-emissions character of Ontario's electricity sector into positives beyond its borders, and could well harm the province's nuclear industry internationally.

The history of the planning of planning the electricity section is instructive for understanding the political placement of LTEP 2013, and the outcomes the last time planning structures were similarly ignored.

History of plans

The Ministry of Energy will work with its agencies to ensure they put conservation first in their planning, approval and procurement processes.
... future planning philosophy should be reoriented to emphasize demand management increasingly rather than maintain the focus on supply expansion, as is traditional.
A 1970's commission (under Dr. Omond Solandt) was initiated due to concerns with transmission lines:
Public concern with issues related to and raised by power system planning in Ontario first arose from the siting of a new series of 500 kV transmission lines around Toronto. They were required to accommodate the additions of power from the nuclear stations and the large fossil fuel fired stations, Nanticoke, on Lake Erie south of Hamilton, and Lennox, near Kingston on Lake Ontario.
Current planning foresees far more transmission lines - for no more supply.  The Wynne government has been clear that it's major supply choice is no supply/conservation/efficiency - whatever it's called, it's the same claim made for over 3 decades.  The current gas plant scandal involves, in part, relocating local Toronto area generation with generation at the distant Lennox site noted in the Solandt report, and the equally distant Lambton site.

The Porter Commission, in 1980, called for conservation and demand managemen.  It was followed by a period of oversupply, which included delaying mega projects (Darlington) as anticipated demand growth failed to materialize. The period of oversupply ended with the mothballing of 7 nuclear reactors late in the 1990's [1]

June 2001 saw the formation of The Select Select Committee on Alternative Fuel Sources.  This all-party committee of the Ontario Legislature reported one year later; their report recommended, among many other things,"the Ontario government shall mandate the closure of all remaining coal or oil-fired generating stations by 2015."
In the election of 2003, two of the parties involved in that committee made the 2015 phase-out a part of their platform - the 3rd, which promised to move up the date to 2007, won the election.
The Electricity Conservation and Supply Task Force was formed prior to 2003's election, but reported after the change of government.  It's report advocated for a, "Minister of Energy role in providing clear and consistent policy direction," along with a, "broader role for the IMO[2] in planning and ensuring resource adequacy."

The Electricity Act was modified, to introduce (as of 2005) the Ontario Power Authority (OPA), in part, "to conduct independent planning for electricity generation, demand management, conservation and transmission and develop integrated power system plans for Ontario."  

The OPA, working within the parameters of directives from the Minister of Energy, delivered a draft IPSP in 2007, which was revised for 2008.  That plan died with the introduction, in 2008, of the Green Energy and Economy Act (GEA). The Premier had appointed "furious" George Smitherman,  his Deputy Premier, as Minister of Energy early in 2008, and it was the lightly educated Smitherman that pushed through the GEA legislation significantly written by lobbyists.

The movement away from professional planning of the sector may have been influenced by the entrenched bureaucracy's inability, and effective refusal, to fulfill the Premier's campaing promise to phase-out coal by 2007.
By 2005 the System Operator (IESO) was noting phase-out plans "beginning in 2007 and ending in 2009."
By June 2006 it was stating the, "government’s coal replacement schedule will require significant delays."
Shortly after the IESO released that outlook the Minister of Energy issued the OPA "direction for the preparation of the "Integrated Power System Plan," which included the vague; "Plan for coal-fired generation in Ontario to be replaced by cleaner sources in the earliest practical time frame..."

If Premier McGuinty was paying attention in 2008 he could have noticed 23 TWh of coal-fired generation and a record 22.2 TWh of exports.  Perhaps the discrepancy between generating with coal for export and the political directive, from the legitimately elected government, to move off coal incented the Premier to go outside of the bureaucracy for the Green Energy Act - which masqueraded as a plan. Regardless, The Green Energy Act was introduced by Minister of Energy Smitherman, who was claiming "about 1% per year of additional rate increase associated with the bill’s implementation over the next 15 years." 
It would become apparent that was untrue.

In November 2010 a new Minister of Energy, Brad Duguid, introduced a "Long-Term Energy Plan" (LTEP - 2010). The document noted, more realistically, that over the next 5 years, "residential electricity prices are expected to rise by about 7.9 per cent annually."

LTEP 2010 kicked off a new round of planning by the bureaucracy.  A supply mix was developed and issued to the OPA as part of a directive to produce a new Integrated Power System Plan (IPSP II).

The OPA worked on IPSP II and reportedly delivered a draft the Minister of Energy prior to the fall election in 2011.  The work was never released publicly.

Following 2011's fall election, a bill was introduced that would have eliminated the OPA and the IESO with a single Ontario Electricity System Operator (OESO).  That bill died when Premier McGuinty prorogued the legislature, and resigned, in the fall of 2012.

When the government of McGuinty's successor, Kathleen Wynne, announced a new Long Term Energy Plan (LTEP 2013), IPSP II appeared to be eliminated from memory and the failure of the OESO bill ignored.

It was unclear to me, at the time, whether the professional institution legally tasked with developing an Integrated Power System Plan would vet LTEP 2013 as they had the previous LTEP.  The passage of months makes clear it will not.

The government of Kathleen Wynne is big on "conversation" but small on process - and possibly indifferent to laws.

In future posts I'll explore further shortcomings of "Achieving Balance: Ontario's Long-Term Energy Plan." There are significant concerns with the document itself, but the greatest shortcoming may be government's disposal of the processes designed to put some distance between long-term planners and the politics of the day.


Endnotes
1.   The period of undersupply ended as 4 of those reactors had returned to service (6 of the 7 reactors mohtballed in the 1990's are currently operating).
2.  Independent Market Operator, which essentially became the IESO(Independent Electricity System Operator) with the changes to the Electricity Act that created the Ontario Power Authority.


This post is an update - initially a rough draft was inadvertently posted.

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