Power Surge: 2013's annual commodity cost increase equals rise from 2006-2012

2013 Ontario Electricity Annual Review: Part 2 

The cost of the electricity commodity surged in 2013. I estimate the total cost for electricity grew from approximately $10.2 billion in 2012 to almost $11.9 billion in 2013; $1.7 billion is also the growth of the commodity cost between 2006 and 2012.

The price paid by most consumers in the province is determined by two things: the costs of purchasing supply, and the distribution of those costs between consumer classes.
  

TABLE 1: costs are increasingly being recoverd via the global adjustment

The simplest method to estimate the total cost of the market is to take the IESO's "Total Market Demand" valued at the Ontario market rate, and add the Global Adjustment (which is the charge for the supply costs not recovered by the market price). 1

Between the IESO's hourly data and the monthly global adjustment values, not only the overall value of the market can be estimated, but the costs per unit for different consumer segments.

GRAPH 1: Note that exports are far below the "Total market", or average rate; making the Class B rate above the average

Wynne winding Ontario down

Today the U.S. Energy Information Administration (EIA) announced "new tables and maps in the Electric Power Monthly provide detailed accounting of generator additions and retirements"
The statistics presented will provide no comfort to Ontario ratepayers smarting from 16-17% electricity price hikes in 2013 as they look to surviving 2014.

The EIA figure for planned capacity editions in next 12 months (as of November) is 2,091.8 megawatts (Table 6.1).

The latest 18-month Outlook from Ontario Independent Electricity System Operator (IESO) indicated 1,884 megawatts of wind capacity due in 2014, but that is simply for generation on the IESO's direct grid.  Additional supply can be embedded within local distribution company grids.  The IESO's outlook notes:

Over the next 18 months, Ontario continues to expand its renewable resource capacity as more than 3,300 MW of wind, solar, hydroelectric and biomass capacity are expected be connected to the transmission grid. By May 2015, the total wind and solar generation connected both to the transmission and distribution networks in Ontario are expected to exceed 7,000 MW.

The EIA's figure for additional "Renewable Sources" to be added in its next 12 months in 5,566 MW.

This week's cold snap, accompanied by large exports to the United States, put an exclamation point on the stupidity statement that is Ontario's green energy waste.

Exports setting Ontario electricity market price

Parker Gallant and I recently wrote on the previous cold snap and noted that the market price in Ontario is sometimes set by exports.

Today that's the case.

Today I'll show some indicators of the day's pricing in the markets likely to impact pricing in Ontario.

Some quick background: the Ontario price I usually show is the Hourly Ontario Energy Price (HOEP), which is really an average of a market control price that is set every 5 minutes.  The U.S. screen captures (and links) below are locational marginal prices (LMP), which I believe are also 5 minute prices set by zone/location.  However, I believe Ontario only has hourly schedules of imports and exports, so the hourly change in exports can/should reflect what is about to happen to LMP's in the export markets.

MISO (Midwest Independent System Operator)

Polar Vortex almost generates a profit for electricity exports from Ontario

This post is a "re-blog" of sorts, as it is co-written with Parker Gallant, and has been posted to the Energy Probe site.  There's a couple of edits here, and I've included footnotes to support a number of the statements

The first 7 days of 2014 ended with an average market price higher than it had been in years.[1]  On January 2nd prices were sent upwards as neighbouring Quebec appealed for conservation during bitter cold which sent demand to near record levels.

When “total” demand, which includes exports, peaked at 25,980 MW at 7 pm of the 7th day, Ontario’s system operator indicated generation on it’s grid was greater than it had ever been[2]; strong nuclear, hydro and wind output was supplemented by record output from Ontario’s natural gas generators.[3]

The Hourly Ontario Energy Price (HOEP) was a high $278.93/MWh, but it wasn’t due to Ontario’s demand stressing supply. The key price drivers were coming from the grids connected to Ontario’s.[4]

As demand peaked on the 7th, exports averaged 3,187MW with multiple U.S. jurisdictions hitting winter demand records due to the cold impact of what is being called a polar vortex.[5]   This made January 7th a record day for revenue on net exports, with 62 GWh valued at approximately $7.3 million dollars (~$117/MWh). [6]

How profitable those exports were for Ontario entities is a matter of opinion. The same day saw record production of over 44 GWh from industrial wind turbines in Ontario. That production, even when fetching an average price of $111.41/MWh, wouldn’t make any profit.

Chiarelli steps it up; finds a $7 billion lie

Very disappointed to hear Ontario's Energy Minister on CBC Ottawa Morning, again just making up numbers that he finds convenient.

Here's what he said on OPG:

...they’ve generated over $7 billion dollars bottom line profit which goes to the gov’t of Ontario to help pay for schools and other necessary services.

Well, I happen to have some figures compiled from actual work I did in preparation for writing on OPG and it shows that Wynne's Chiapetti is once again making a bold statement in error.

Here's OPG's "Net Income" since it's first annual report: annual on the left axis, and the red line is cumulative on the right axis.  From inception to the end of 2012, cumulative net income was just shy of $5 billion.

When is Tim Hudak not considered another Mike Harris?

Now we know when his constrant critics won't consider Tim Hudak to be another Mike Harris.

The Toronto Star provided opinion space for Tim Hudak to communicate that his PCs have a plan to bring prosperity to Ontario, and concurrently ran an editorial that began:

In order to maintain the prevailing theme of simplicity, let’s cut to the chase on Ontario Progressive Conservative leader Tim Hudak’s proposed “Million Jobs Act”: it’s campaign sloganeering, at best.

The Star's Queen's Park propagandist, Metro Martin Regg Cohn, took a stab at statistics in dismissing Hudak's plan by noting:

...Statistics Canada said Friday there were 588,000 people unemployed in the province. That’s a daunting number, but it’s rather less than the number Hudak claimed. He was off by about 400,000 jobs — that’s plus or minus 70 per cent — from the official tally.

Well, I empathize with communicators, and I will firmly support Hudak's party in 2014, so I was willing to cut him a lot of slack and not check to see if he was definitely rounding way, way up in the potential of any jobs plan.

But Metro Martin had concluded his column with a smug, "we're not stupid," so I figured in checking the possibility of adding 1 million jobs I might confirm 2 things.

2013 Ontario Electricity Annual Review: Part 1 - Supply

In 2013 Ontario's demand was little changed, while prices for the electricity commodity in Ontario escalated about 16%.
Analysing data from the year provides illustrations for many topics covered on this blog since inception: supply continues to grow while demand does not; excess generation is dumped on export markets far below the cost of supply to Ontarians, and the global adjustment pricing mechanism continues to become a greater component of the commodity charge even as it becomes clearer it's largely improvised each month.

This post will focus on supply. [1]

Most of the data I collect, and manipulate for reporting, comes from the Independent Electricity System Operator (IESO).  That data reports "demand", but the term is used to mean the sum of supply on the IESO controlled grid; it does not reference actual metered demand.

The IESO does not, and cannot, report supply embedded within the local distribution company (LDC) grids, which likely grew rapidly in 2013.  The IESO is likely to report demand slightly down, but that is likely only true because there is no accounting for the growth in solar power, with all panels currently embedded in LDC areas; adjusting for the impact (which shows as lower demand), my estimates indicate the past 3 years experienced essentially the same demand/supply.