Accounting And Ontario's Electricity System: A Farce

People are trying to make sense of the record low electricity price Ontario achieved this Sunday.  I wrote about it Monday morning, but most are getting their information from other sources, including the Toronto Star– and these source don’t seem to working with any foundation in accounting.  I have some experience with ‘retail math’ – which is probably about a grade 7 level of math. I combined unease with my qualifications, my interest in technology and theories of education, and my occasional feeling I should take a more active interest in my children’s schooling, and brushed-up on my accounting with some lessons at the Khan Academy (which I learned of in a recent column by Margaret Wente). 

Sunday Sees Record Low Pricing in Ontario’s Electricity Market

The official daily report from the system operator shows August 28^th’s  an average HOEP at $-22.58 (weighted average of $-17.53/MWh).  This is the lowest average price throughout a single day on record – breaking a record set only January 1^st.  

Duncan's Grow-Op Is Stealing Hydro

Public generation is increasingly being demoted to servicing private interests in Ontario. In April 2004, minister Dwight Duncan delivered a speech, to the Empire Club, titled “Choosing what Works for A Change.” In hindsight, the obvious question should have been, “Works for who?”

Government Machine Rewrites History To Protect McGuinty on Debt Retirement Charge

The OEFC's 2011Annual report for the next OEFC fiscal year, ended March 31^st, 2011, was being posted to their website as I was posting my article, Retire the Debt Retirement Charge .

Remarkably the 2010 report wasn't posted until October 2010 – who knew the next would follow 10, and not 12, months later.

Retire the Debt Retirement Charge

Ontario's Debt Retirement Charge (DRC) has become an election issue. The PC party made the removal of the DRC, which they introduced while forming the government¹, a part of their election platform . The pledge is contained in the “Getting Home Energy Bills Under Control” section of their Changebook platform. The elimination of the DRC should help do that in the long run, but probably not in the short term.  

Time for Hudak to Step Up, Or …

In early October, Ontario will vote in the next provincial government.  Events of the past 2 weeks have made it much more likely that the new government could be the same as the old one.

A 400% Rise in the Global Adjustment, and Other Disturbing Trends

The Global Adjustment provides both adequate energy supply and green energy for Ontario. It accounts for differences between the market price and the rates paid to regulated and contracted generators and for conservation and demand management programs.

The IESO provided a second, lowered, estimate for July's Global Adjustment (GA), of $30.75/MWh or $390.3 million. In July 2010, the figures were $7.50/MWh and $98.8 million.

Exporting Electricity: Smarter Guys In the Room

Diving into statistics doesn't always provide the expected result.  It would probably be best to leave it at that and move on, but ... I think I owe it to some traders to update a previous column ... and it never hurts to try and find something interesting.

Coal is Not Being Replaced By Wind

Wind is not going to replace coal in Ontario.  There are many claims wind generation is yet to replace any fossil fuel generating station in any jurisdiction, but Ontario may be particularly poorly suited for the introduction of industrial wind generation into our supply mix.  Electricity pricing looks to be an important issue destined to occupy much of the discourse in Ontario’s election this fall.  People generally don’t believe the government, but they also don’t believe bills could be rising so quickly, so much new capacity being announced, and yet some forecasts show shortages again by the end of the decade.  All are true, and the key driver of pricing increases in Ontario is a reckless disregard for operational efficiency that is driven by wind proponents.  That could lead to future shortages.