Wynne bungles elimination of debt retirement charge

Toronto's inept Premier has bungled the simple task of eliminating a billion dollar charge concurrent with halting a billion dollar credit.

Ontario intends to take the Debt Retirement Charge (DRC) off residential electricity bills, saving the typical homeowner $5.60 per month, after Dec. 31, 2015.
...The DRC would remain on all other electricity users’ bills, including large industrial users, until the residual stranded debt is retired.     [Ministry of Energy news release]

There's a great deal of trickery here as pre-electioneering results, again, in terrible electricity policy.

The Ministry of Energy news release notes the debt retirement charge (DRC) changes will occur as the, "Ontario Clean Energy Benefit (OCEB) ... is set to expire."

Some figures to explain the machinations:

• The DRC collects just under $1 billion a year, and the OCEB costs just over $1billion a year [1]
• The debt retirement charge (DRC) is 7/10ths of a cent on each kWh consumed in Ontario.
• Using a recent estimate of 17.25 cents/kWh, the DRC is 4% of all charges
• The OCEB is 10% of all charges (delivery, regulatory, etc.), but not on all kWh consumed
• The OCEB applies to residential, farm, and small business (less than 50kW average monthly peak) [source]
• more than half of all consumption is by large consumers/businesses not receiving the OCEB.

Consequently:

• With the end of the DRC and OCEB, voters' bills will go up for 2016, about 6% more than they otherwise would
• Expenditures on the Ontario Clean Energy Benefit will be reduced near 0
• Revenues from the Debt Retirement Charge (DRC) will be reduced by less than half, with the full burden of ongoing payments placed on the province's businesses.

Zombie Docs: Environment Defence's latest offence

This was first posted March 20th on my Wordpress site. My hope was the report being debunked would be generally ignored and this post would not have continued relevance. 

Unfortunately it's been a useful reference too often; as such, it belongs on Cold Air.

___

Environmental Defence issued what they consider a study, and it was treated as news (Globe, Star).
It shouldn't have been.

Your Home Electricity Bill: A Study on the Costs in Ontario includes some pedestrian costing estimation by a consultant, and regurgitates the spin from past reports that we had felt slain multiple times.

The costing breaks down a bill for $137 which it claims is "based on 800kWh/Month" - which I calculate as working out to 17.25 cents/kWh. The report also cites a Hydro Quebec study to demonstrate how Toronto and Ottawa, collectively known as Ontario (prices are actually higher in the rest of Ontario than these cities). One problem is the HQ data being graphed is in base units, with Montreal set to 100, as the base:  Montreal's $68.66/month (1000kWh residential demand) is the index, making Toronto's $124.75 182 on the index (because it's 82% higher).

This E.D. publication has Toronto rates at both 12.465 cents/kWh and 17.25 cents/kWh.

Awful.

Ontario Rates headed higher again - due to renewables

The Ontario Energy Board (OEB) has announced that electricity bills will be going up at least 2.4% a day from April 30-May 1st.

Fortunately it's only twice a year the OEB sets the Regulated Price Plan (RPP) rates for retail consumers in Ontario, so the annual increase isn't over 700%, but it isn't 2.4 either.
There's a couple of RPP plans; an old "tier" plan which charges less for the first tier of consumption, and the now more common time-of-use (TOU) scheme. Both RPP versions have rates set to average the the same amount; the calculations for that amount are communicated in a Regulated Price Plan Report.

Rates are set to average $92.50/MWh (9.25 cents/kWh) as of May 1, 2014; last year rates moved to average $83.95/MWh on May 1st.

Here's how the OEB's press release describes that annual 10.2% increase:

The price for consumers is increasing by approximately $2.83 per month on the “Electricity” line, or about 2.4% on the total bill, for a household with a typical consumption pattern of 800 kWh per month.

Ontario's rates are up near 10% a year since 2008
US rates are not [1]

So, the average cost of a kWh is going up 4% that day. Other portions of ratepayers' bills have been rising too, at times more rapidly than the charge per unit of consumption.

The rise in RPP rates has been a feature for over half a decade in Ontario. From 2008-2013 RPP rates increased an average of about 8.5% a year: US rates, over the same period, about 0%.

The OEB disguises the reason for the current hike in its news release:

The Global Adjustment, and a tale of a soaring wind and solar subsidy

It's been nearly 2 years since Greenpeace posted:

Nuclear has been responsible for 45% of recent increases on your electricity bill. Meanwhile, the impact of renewables on your electricity bill has been minor – about 6%.

I responded at the time as the statement, and the misunderstanding of Ontario's convoluted pricing that lead to it, were nonsensical.  However, I thought I'd pull some quick figures to bludgeon truth in demonstrating how much cheaper nuclear has become, while the costs of renewables, and their friend natural gas, have skyrocketed.
And then I'll try to add a more accurate perspective.

I estimate figures on an ongoing basis and, according to my calculations, nuclear generation is responsible for ~38.7% of the global adjustment mechanism (GAM) charges over the most recent 12-month period.  That statistic is well down from the 45% Greenpeace sited.

What is escalating during this decline in nuclear's share?

Solar and wind generation is now up to 21.5% of the GAM, from the 6% cited less than 2 years ago.

LTEP 2013: The Liberals' Temporary Electricity Ploy

Ontario's short-term government announced a Long-Term Energy Plan (LTEP) in December, which they dubbed "Achieving Balance."  The well-written document has some promising language regarding cost control and flexibility, but is vague on how all demand situations will have supply to match.

The events of the past winter made it clear supply shortfalls are, in planning terms, imminent.  The LTEP is a flawed document in electricity planning, but it's a much worse if viewed as an "energy" plan.  It is a political document that doesn't foresee a comprehensive planning role for the Ontario Power Authority, tasked in the Electricity Act with producing an Integrated Power System Plan (IPSP) - presumably free from the glare of the political spotlight.
 "Achieving Balance" is a political document which ignores opportunities to leverage the low-emissions character of Ontario's electricity sector into positives beyond its borders, and could well harm the province's nuclear industry internationally.

The history of the planning of planning the electricity section is instructive for understanding the political placement of LTEP 2013, and the outcomes the last time planning structures were similarly ignored.

History of plans

The Ministry of Energy will work with its agencies to ensure they put conservation first in their planning, approval and procurement processes.

-Achieving Balance: Ontario’s Long-Term Energy Plan (Dec. 2013)

... future planning philosophy should be reoriented to emphasize demand management increasingly rather than maintain the focus on supply expansion, as is traditional.

-Report of the Royal Commission on Electric Power Planning: 1980 (Chaiman: Arthur Porter)

Stories tell numbers: Macleans silly Aglukkaq attack

John Geddes, sorta, has an article in Macleans: Aglukkaq touts emissions cuts, numbers tell another story.
Sorta, because the article is basically a longer version of claims made by economist Andrew Leach, a frequent contributor to Macleans, on Twitter.

According to Leach, "This answer from Min Aglukkak grossly misrepresents what the business as usual case in GHG modeling is":

Mr. Speaker, our government is committed to protecting the environment while keeping Canada economically strongly. Thanks to our actions, carbon emissions will go down by close to 130 megatonnes from what they would have been under the Liberals.

I described Leach's description of the Minister's answer as "a silly statement about a meaningless statement."
The Macleans articled subsequently calls the "130 megatonnes from what they would have been" a "meaningless comparison."

If life is a search for "meaningless", Macleans has done better than I: Minister Aglukkaq may have communicated that the government has the economy in mind as well as the environment, and that "carbon emissions will go down... from what they would have been under the Liberals."
Which would be a good political message in ~40 words.

Arbitrary pricing: The idiocy in the Ontario Power Authority's annual report

It's Figure 3, in browsing the Ontario Power Authority (OPA) 2013 annual report, that initially angered me.

You should know why, because it demonstrates why any business submitting to hourly, and/or monthly global adjustment mechanism pricing, is being charged arbitrarily, introducing unpredictable variability to their cost that cannot be justified and serves no purpose.

The problem is, appropriately enough, obscured in a bland taupe.  I have written a number of times criticizing the government's conservation/efficiency policies, which seem designed by well-paid people whose largest draw of electricity is their central air conditioning for well-paid people to benefit from programs centred on central air (as peak saver has been) - but I never imagined the allocation of "conservation" cost would exclude any allocation in July.

Fools' Day: Ontario's electricity sector gets more ridiculous

Oy vey

Ontario's electrcity system operator, the IESO, posted a 2nd "estimate" for March's global adjustment charge yesterday, along with an initial estimate for April's.

OPA tweet yesterday, featuring the IESO's
Bruce Campbell (with the glasses) and, on his
left side, the OPA's Colin Andersen

Both are bad - but the pricing of the last 3 months does provide some insight into Ontario's electricity sector worth pursuing.

The 2nd estimate is a credit of $8/MWh - based on a total global adjustment pool of $67.7 million. The final global adjustment has not been a credit since June 2008.
A credit would mean the market sales exceeded the contracted cost of supply, which might appear to be possible, as it did in February, when the weighted average Hourly Ontario Energy Price (HOEP) was $81.83; only slightly higher than March's $80.41.  Applying the arbitrary global adjustment charge to make March $21/MWh cheaper than February looks to ridiculous.

Were you wrong in February, or or are you wrong now?
This is not a question likely to get a response from the OPA/IESO global adjustment team. There is a near-total lack of transparency on the composition of the global adjustment which facilitates it being recklessly calculated and arbitrarily applied.