Friday, June 15, 2012

Electricity Exports Continue to Cost Ontario Families

Ontario electricity exports in May cost Ontario families, adding about 6/10th's of a cent to the charge on each kWh they consumed.

It's that time of the month where the govenment release it's silly spin on Ontario exports, and I am silly enough to rebut it once again.  This month is a little different as the release comes just days after the government announced it would sell the power it has been exporting, at very cheap rates, to industry willing to commit to adding employment in Ontario.

June 2012 Ontario Electricity Exports Bulletin:
"Ontario's electricity market generated over $17 million in May by exporting electricity to other states and provinces, bringing total net export revenues to over $93 million this year.
This revenue helps Ontario:

  • Keep costs down for families
  • Build and maintain a clean, reliable and modern electricity system
Ontario's families, and it's smaller businesses, end up paying a rate comprised of the Hourly Ontario Energy Price, plus the "Global Adjustment Class B rate"
Ontario's largest industrial consumers pay a rate comprised of the HOEP and a "Class A" rate (which is likely about $20/MWh less than the Class B rate lately).
Export customers actually pay somewhere between the HOEP and the price in their home markets (usually the government reports revenue about 10% higher than the HOEP would indicate).
In May most Ontarians will pay ~$77/MWh ($20.09 HOEP)
Big industry will pay, on average, ~$54/MWh
Export customers will pay about ~$22 ($20.09 HOEP + 10% observed variance)

I recently crunched some data to quantify the benefit of this to families in Ontario (data exercise)

The average rate paid for electricity in the total market (internal and external demand and production) was ~$67/MWh.
Because export customers paid only ~$22/MWh, the remainder of that $67 was added into the global adjustment pot, adding ~$5.80/MWh to each small business and residential bill in Ontario.

Assuming an average residential use between 800 and 900kWh per month, exports benefited Ontario families in May by removing $5 from their disposable income.

Presumably $5 that would have been harmfully dispensed with purchasing cigarettes ... or alcohol ... or food.

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