Thursday, March 27, 2014

Smart - or not: Ontario's Regulator calls for more new meters

I looked into an Ontario Energy Board (OEB) Notice of Proposal after seeing a tweet:
The Board is of the view that, given the current metering infrastructure and pricing environment, it is appropriate to ... require a distributor to install a MIST [Metering Inside the Settlement Timeframe] meter on any installation that is forecast by the distributor to have a monthly average peak demand during a calendar year of over 50 kW.
The comments the OEB has received on the proposal are informative - as is the omission of comments from a couple of well-paid government organizations that should have an opinion.

This is, I assume, a complex subject - particularly for people under the impression all of Ontario's electricity consumers already have "smart" meters.

They don't.
The OEB proposal addresses, for better or worse, a gap in policy.

Essentially all residential consumers should now have "smart" meters reporting through designed protocols and networks.  According to the most recent OEB Annual Yearbook of Electricity Distributors, about 90% of all customers fall into the residential category, but they don't account for even 30% of overall demand.

Tuesday, March 25, 2014

Natural Gas hikes impact on electricity pricing in Ontario

"After re-checking its numbers, the IESO agreed that Luft was substantially correct"

The price of natural gas impacts Ontario's electricity price; probably in ways many people don't anticipate.

On March 18th, an article by John Spears presented generation figures from Ontario's natural gas-fired fleet that I perceived to be incorrect.  Ouput from the province's natural gas generators is down this winter.  I communicated my concerns to Mr. Spears and the source of the incorrect data, Ontario's Independent Electricity System Operator (IESO), and, on Friday a second article corrected the first.
I appreciate the efforts of both in rectifying the data error.

Data is much less powerful than narrative and, unfortunately, some incorrect narratives survive the correction of poor data.  I was aware of the mistake in the first Star article (claiming a rise in electricity generated from natural gas this winter) because I'd written of record natural gas generation during January's coldest period (much of it for export), and started a summary of February's electricity sector activity with, "February was a disaster for Ontario's electricity consumers - but not nearly as bad as it will be for Ontario's natural gas consumers."

Natural gas pricing is expected to remain higher than 1 year ago throughout the summer season as storage inventories are replenished for, primarily, next winter.  The implications for the future can be gleamed from the impacts of the past.

Refresher on Ontario's Market

Tuesday, March 18, 2014

Power at what cost: appraising Ontario Hydro's successors

It's been a decade and a half since Ontario Hydro was broken up into 5 successor companies.
Recently the generating company that is one of those successors, Ontario Power Generation (OPG), reported it's 2013 results - which weren't very good.  Earlier in the year Hydro One - the transmission and distribution successor - released 2013 financial results that indicated a record net income.

A day after OPG's 2013 results were released the government announced new Chairs to the Boards of both OPG and Hydro One.  It's not surprising that both new Chairs have backgrounds as politicians as both entities have image problems. A recent report by the Auditor General of Ontario hammering costs at OPG has many clamoring for changes in the governance there, and Ontario's Ombudsman has an active investigation into Hydro One's "billing practices and the timeliness and effectiveness of its process for responding to customer concerns."

OPG's 2013 performance is impacted by other entities.
This post is a broad overview of today's status of successor companies to Ontario Hydro [1], particularly in terms of their impact on the public generator.

Ontario Electricity Financial Corporation 

The Ontario Electricity Financial Corporation is, as noted in its first annual report, "the legal continuation of Ontario Hydro ... responsible for ensuring the prudent and efficient management of $38.1 billion (as of April 1, 1999) in debt, derivatives and other liabilities of the former Ontario Hydro."  Ontarians might think the OEFC is paying down debt, because since Ontario's wholesale market opened May 1st, 2002, they've been charged 7/10th of a cent on each kWh of consumption as a debt retirement charge (DRC).
That works out to around $1 billion a year.

Ontarians thinking debt at "the legal continuation of Ontario Hydro" is going down are wrong.

Looking at the history of annual financial reports, the total debt level of the OEFC is higher in the most recent report (see pg1-105) than it was in the report preceding the election of Liberal Dalton McGuinty as Premier of the province in 2003 (pg 16 here).

Wednesday, March 5, 2014

The blog, the question, the answer, and the wind moratorium?

I have a number of blogs - this being the main blog for my entirely my original content, and coldaircurrents the blog I usually post non-original content to, usually with some input as to why I find it relevant to the subjects I follow.
Yesterday I posted to a secondary blog I've been maintaining, partly to say more partisan, and meaner, things that I think may not fit with the brand I've built here.   The particular post is partisan, but its content is substantial, as indicated by both parties in an exchange in the Ontario Legislature's question period today.
I raised an eyebrow when commercial operation dates were mentioned in the question, but really couldn't avoid thinking there was a connection to my post when Minister Chiarelli says in answering:
the reality is since the first of award of contracts under the FIT program... there has been an actual moratorium on wind because we have not issued any new wind projects.
Where did that come from?
With the distinction between my blogs blurring ... here's a video of Lisa Thompson questioning Bob Chiarelli today, followed by my post of yesterday - which may have been known to both sides in the exchange.

Ontario Liberals Often Fail to Honour contracts (first posted at

The Toronto Star ran an article recently indicating a political leader in Ontario would not honour contracts.   That leader was PC leader Tim Hudak, and since I've said in the past Ontario's ratepayers would have saved billions by electing Hudak's party when they had the change in fall 2011, I thought I'd take some time to show why that is, and how the current government has not honoured the contracts signed prior to that election. The PC's party "Changebook" 2011 campaign platform included;
We will end the feed-in tariff program that, in some cases, pays up to 15 times the usual cost of the hydro. Hardworking farmers and other Ontarians who signed contracts to host energy production on their property will have their contracts honoured. But there will be no more of these deals. We will end the king of all secret, sweetheart deals – the $7 billion Samsung deal...
As Mr. Hudak's stance of trying to end contracts is portrayed as being impractical, in the Toronto Star article and elsewhere, it's important to note that in the two years following that election there has been little new contracting of supply.    Comparing the OPA's 2013 Q3 – A Progress Report on Contracted Electricity Supply to the same report for the quarter prior to 2011's election, only 33.6MW more "wind" shows as being contracted ( 5,755MW total), and 62.7MW more solar (of 2,050MW total).    The majority of renewable supply contracted since July 2011 is the conversion of Atikokan from coal to biomass (Hudak is currently being criticized for supporting another biomass project).

Saturday, March 1, 2014

Declining security and soaring industrial rates: February numbers show Ontario's Energy Policy is non-existant

February was a disaster for Ontario's electricity consumers - but not nearly as bad as it will be for Ontario's natural gas consumers.

Here's some storylines from my first look at February electricity data from the Independent Electricity System Operator (IESO):

  • $81.39 weighted average Hourly Ontario Energy Price (HOEP), which is up $16.40 from January, and 178% over February 2013 ($29.31)
  • Ontario Demand is shown [1] as 11.4% lower than January 2014, and 2.8% higher than February 2013
  • Total market value of ~$1.05 billion, by HOEP, is up 5% from January, and 177% from Feb. 2013
  • The 2nd estimate of the global adjustment is $178 million, up 10.8% from January's final, and down 66% from February 2012
  • The total costs (market value at HOEP plus global adjustment) will be $1.23 billion if the global adjustment is not changed when finalized, which would be the highest monthly value since the market opened in May 2002
  • Exports were ~966GWh, down 44.5% from January and 22.2% from Feb. 2013
  • Imports were ~877GWh, up 88.5% from January and 248.6% from Feb. 2013
  • Ontario's natural gas generators produced ~ 1.47TWh in February, down 39% from January and 36.5% from Feb. 2014
The increased HOEP is entirely a natural gas supply story: the victims in the story are the largest consumers in Ontario.  

The chart refers to "Class A" global adjustment consumers as "industrial" - which should be true, but isn't entirely correct