I have other blogs for other purposes: one aggregating articles from elsewhere; another for quick comments, or to work out one aspect of a bigger story, and an edgier blog intended to be meanly funnier in a way that could alienate some readers from my posts here. Today's post will draw on recent material from my other blogs as a petty squabble has reached an interesting data point.
The Toronto Star's Queen's Park columnist, Martin Regg Cohn (MRC), has been working to downplay the recent report from Ontario's Auditor General on the electricity cost impacts of the province's failure to adhere to the professional Electricity Power System Planning it had designed and introduced. MRC's latest column is titled "Why cheap hydro was too good to be true."
For perspective on the Star's "too good to be true" perspective, one might look at the trend over 50+ years in the country just south of us.
MRC's column today ends with "we can grapple with our electricity reality — a prerequisite to generating better outcomes." Presumably, if one were a grappler, one might look to Q & A for Ontario’s hydro system from the Star's "Queen's Park Bureau Chief Robert Benzie and Queen's Park Bureau reporter Rob Ferguson - but that would be a mistake. Here's their first point:
How is Ontario's Electricity Generated?No, that's not so.
The majority of Ontario’s electricity — 60 per cent last year — comes from nuclear reactors at Bruce, Darlington, and Pickering. Almost a quarter — 24 per cent — is from hydro-electricity from places like Niagara Falls, while 10 per cent comes from natural gas-powered generating plants. Only 6 per cent is from wind, and less than 1 per cent comes from solar, with a similar amount of electricity generated by biofuels.
The numbers are aligned with the statistics for 2015 released this week by the system operator (the IESO), but those figures are for " transmission-connected power generated in Ontario." The Toronto Star's Queen's Park writers might have known that a rapidly increasing amount on Ontario's electricity isn't transmission connected if they researched, a.k.a. talked to, The Toronto Star's Climate and Economy Reporter Tyler Hamilton. From Hamilton's blog this past week:
“So over 90 per cent of solar in Ontario isn’t being included in their annual figures,” points out Keith Stewart from Greenpeace Canada. “If we did include it all, solar would be about 2 per cent of total generation. It’s a clear example of how conventional power-sector thinking is blinded to the role of renewables and the evolution towards a more decentralized grid.”
I discussed this issue last week with Financial Post reporter Peter Kuitenbrouwer, who later wrote on the troubles with Statistics Canada solar data. A lot of folks would like to see better grappling with our electricity reality, but there's little evidence The Toronto Star's Queen's Park bureau are among them.
The best 2014 figures available for solar are in the Auditor General's report that MRC continues to pointlessly attack.
We know from reporting on contracted capacity reaching commercial operation that solar's capacity grew 44% from the 3rd quarter of 2014 to 2015's Q3, so the simplest estimations of 2015 solar are 2.6 TWh of electricity production at an expense of $1.272 billion.
That's about a $400 million increase in just a year - and over $1.1 billion in cost, during 2015, hidden form observers of the electricity sector that don't know how solar is growing.
The only other comment I'd make on the Star's Q&A column is that "Why are nuclear reactors so expensive?" is a stupid question without context. A slightly less stupid question would be "Why are nuclear reactors so expensive but cheaper than every other electricity source Ontario purchases except for production from legacy hydro-electric power plants?"
Regg Cohn discusses the Debt Retirement Charge in his column. It's a complicated topic, I suppose, but one somebody in journalism should have cited as the biggest swindle of 2015. There were many financial machinations around Hydro One in 2015, which I won't try to explain here, but I will share, and explain, two quotes from government documents demonstrative the swindle of the year:
From a Ministry of Energy backgrounder on October 9, 2015:
Based on the [Hydro One restated prospectus], an estimated deferred tax benefit of $2.6 billion would result in a benefit to the Province, at consolidation, of about $2.2 billion, based on the Province having about an 85 per cent share of Hydro One following the IPO. The actual deferred tax benefit will depend on the actual results of Hydro One at closing of the IPO.If you think about this paragraph, it spends as profit the increase in value of Hydro One due to reducing future taxes - which means spending now and having reduced revenues later.
As this deferred tax benefit results in a net fiscal gain, the Province proposes to credit it, along with other net fiscal gains, into the Trillium Trust...
That's unpalatable, but it's especially repugnant when joined to the essentially arbitrary reduction in money owed to the organization tasked with retiring the debt because (from the fall economic statement):
As part of the government’s commitment to using the proceeds from broadening Hydro One ownership for infrastructure investments and paying down debt, proceeds related to the book value of the shares sold and the pre-IPO special dividend payment of $800 million paid by Hydro One to the Province will be used to pay down the Province’s electricity sector debt and other payables. This will allow the Ontario Electricity Financial Corporation (OEFC) to reduce its overall debt, and contribute towards the Province’s targeted $5 billion debt paydown. This debt paydown does not affect OEFC’s stranded debt, as OEFC’s receivables from the Province will be reduced by an equivalent amount.Is this confusing.?
The government will use the proceeds of the sale of shares in Hydro One to either fund transit or retire electricity sector debt, but whatever debt is retired they'll match by reneging on the amount the government owes to the electricity sector by the government.
It owes it because for a decade sector profits have been spent by the government.
The stranded debt in 2016 is essentially a lie that functions to allow seizing another $1.6 billion from Ontario's businesses.
The Minister of Finance is legally entitled to perpetrate the hoax , but nobody is legally required to pretend there is any merit to the farce.
MRC also returns to attributing cost to the coal phase-out and rewrites history with:
"Ontarians gave a massive mandate to the Liberals in 2003 to get rid of coal..."
1. The recent events:
Appearance on The Agenda's Heated Over Hydro, which
I wrote on in TVO’s Paikin chooses to be a reason “why rates keep rising”, which may have led to,
MRC wrote Fun with numbers on your monthly hydro bill, which I replied to with,
It’s only $5+ billion to Martin Regg Cohn and the Auditor General responded to in,
I didn’t endorse fossil-fuel-generated power, and that seems to have led to,
MRC's "Why cheap hydro was too good to be true" today, backed by Q & A for Ontario’s hydro system written by other Star writers
2. It's unclear what "reporter" entails as the Star end-notes his articles with, in part, "His articles are part of a series produced in partnership with the Toronto Star and Tides Canada ..." Reports on certain aspects of certain stories seems to be the point. I will disclose Tyler Hamilton gave me the opportunity, 3 years ago, to investigate what being blocked on Twitter meant. I had implied calling for more wind given our huge excess of production might be explained as "looking for favours."
Now he's published as a partnership with Tides.