A Bitterly Cold Emphasis on a New Year’s Problem

The figures are in for January 24^th, and they show the highest winter electricity consumption in over 2 years – for both the daily hourly average Ontario demand, 20036MW, and the hourly maximum of 22733, at 7pm.

The average Hourly Ontario Energy Price (HOEP) was $38.98/MWh for the day.  It peaked at $45.66/MWh (it did peak at 7pm, along with demand).

Foreign purchasers should get it at the market rate - presumably the HOEP, which average about $40/MWh.

Ontario users will pay about $68/MWh,
or 6.8 cents/kWh.  That is about the average paid under the Regulated Price Plan (RPP), it should also be about the average on the TOU plan, and because the IESO shows the Global Adjustment at 2.88 cents/kWh ($28.8/MWh), all roads point to the same price for Ontario purchasers of electricity. 

So for those who dismissed the New Year’s Day figures, let’s do the math estimating the cost to Ontarians of yesterday’s exports.

The Daily Market Summary shows an average hourly export of 3123MW.   Each hour we exported electricity for about $87,000 less than we paid suppliers to purchase it.  On the highest domestic demand day in over 24 months, that is about $2,100,000 over the course of the day.

Visiting another IESO page, we see the production breakdown by source.  Let’s look at the 19^th hour, which had the 22733MW of Ontario demand (output first / capacity second):

·         Nuclear                  10797/11033

·         Coal                        2695/3577

·         Natural Gas            5921/6863

·         Hydro                     5208/6708

·         Wind                         398/1250

·         Other                        147/2722

·         TOTAL                25310/31718

Production of 25310MW looks like it is less than capacity, and maybe it is, but there are only 3 days when production peaked above 25310MW.  September 1^st, 2010 (production maxed at 25420MW, demand at 24444MW), the day before that, August 21^st (25818MW and 24917MW), and August 1^st, 2006, which has the all-time high demand of 27005MW, and had production of only 25475.

Previous discussions have centred on supply mix issues.  But clearly yesterday’s production isn’t related to how much wind is on the grid, or how many nuclear reactors are operating.  Yesterday’s over production was deliberate.

The text from a January 11^th 2011, Speech by Paul Murphy , President and CEO, IESO, to the Ontario Energy Network includes “… finally for the first time they are beginning to be charged the true cost associated with when they use it.

The alternative, and this is what we have lived with for years, is to have those who consume less in the peak hours continue to subsidize those who use more. How fair is that?”

This is a question of secondary importance.

Yesterday, Ontarians were coping with cold temperatures, and dinner, while paying 9.9cent/kWh, reportedly to discourage consumption, while we were subsidizing electricity exports – from peaking, GHG emitting, production.

The important question is, when did the IESO decide it should function to service suppliers at the very direct expense of Ontario consumers?