Global Adjustment mechanism again headed to court.

Jeff Zochodne reports that a,

August lawsuit filed by National Steel Car (NSC) believes the revenue the IESO collects for the global adjustment, from the company “and others,” should be declared “an unconstitutional tax, not a valid regulatory charge.”
The company gives numerous reasons, including that the global adjustment allegedly “redistributes wealth from the consumers of electricity in Ontario to, among others, the generators of renewable electricity.”

I don't like their chances, partially because I doubt the quality of Ontario's courts, but I will discuss reasons the lawsuit has a chance at succeeding to demonstrate the need for changes in Ontario's too pliable electricity pricing structures.:

• pricing includes the full cost of current supply despite the intent of the Green Energy Act to grow value outside of Ontario's electricity sector, 
• the courts have already ruled the global adjustment structure to be a subsidy of one group of consumers, at the expense of all others,
• only certain consumers were exempted, at the end of 2015, from the Debt Retirement charge, and,
• another group of consumers has now been rewarded with a "Fair Hydro Plan"

The global adjustment mechanism being challenged was introduced in 2005 to ensure the full costs of electricity supply were paid by consumers of electricity (Section 25.33 (1) of the Electricity Act 1998) - it was intended to be the difference between what suppliers were paid through contracts (or regulated prices) and what the market valued supply at. In half of the first 26 months of the global adjustment the line item was a credit on consumer bills, but it's been a charge in all but one month since 2008.

Ontario Goes to Pot

"You have to recognize the culture of the province has changed, the economic life of the province has changed, and opinion and attitudes have definitely changed."

Mississauga South's C. Sousa, announced what the government was not doing the other day.

“We are not encouraging the consumption of cannabis. That would be a mistake.”

The presumably serious statement came as the government announced a new neighbourhood drug dealer.

The press release - from the government's main legal Minister - makes it abundantly clear the provincial government is gearing up to sell cannabis to people it doesn't approve of due to the actions of the federal government.

In response to the federal government's plan to legalize cannabis by July 2018, Ontario is committing to a safe and sensible framework to govern the lawful use and retail of recreational cannabis as a carefully controlled substance within the province.

The mock press probably got this story right.

from the Beaverton

regarding Ontario Electricity Generation and Costs, 2007 - 2015

This week I was handed some data indicating, by supply type, electricity generation and costs in Ontario. The data was a hard copy response of the IESO to a freedom of information request. There's nothing in the data that will surprise readers of my work, but perhaps it's time for a refresher, as today I read one flip comment by a mainstream journalist, joking they'd like to see "Ontario families can no longer afford skyrocketing nuke costs," and an opinion piece on the public broadcaster's site which included:

...as data from the [International] Electricity System Operator clearly shows (sic), it’s nuclear and gas plants that are responsible for the lion’s share of increases. 

"Clearly."
It is time for a refresher.

Some background on the data I'll share. The 2015 Annual Report from the office of The Auditor General of Ontario included a chapter on "Electricity Power System Planning." The entire chapter contained a wealth of information and continues to be cited frequently, but for those chasing hard numbers one particular star of the work was a figure revealing the quantity, and cost, of generation from various sources, inclusive of not only the larger generators frequently reported by the IESO (the "I" is not for international, but it is the electricity system operator), but also the seldom reported distributed generation - which is where most solar exists.

The freedom-of-information requests handed to me included this request:

Breakdown of Generation Cost by Energy Sources for the years 2007, 2008, 2009, 2010, 2011, 2012, 2013 and 2015. The Breakdown for 2014, which was included in the Annual Report of the Auditor General of Ontario, is attached as reference.

The data table that follows responds fully with the request - I have only reformatted it:

Ontario may contract more imports from Quebec - badly

On the morning of Tuesday August 8th La Presse published an article reporting on a draft contract which would see Ontario pay Quebec approximately $500 million a year for the ability to import 8 terawatt-hours of electricity. By late morning the office of Ontario's energy minister denied an agreement was reached, and the ruling Liberal party's press office was slamming the opposition party for "spreading misinformation."
Perhaps nothing will come of the proposal, but it's worth noting what constituency it is designed to appease, how that appeasement impacted the draft agreement, and the concerns all Ontarians should have with the processes, and institutions, involved in the province's electricity sector.

A timeline surrounding the leaked draft document dated June 22, 2017:

• during May Ontario's Minister of Energy GlennThibeault and this Quebec counterpart, Pierre Arcand, discuss "the possibility of further enhancing electricity trade in order to cost-effectively improve our respective electricity systems," [source]
• La Presse's report, translated on Google Chrome, includes, "Thibeault sent a letter to his Quebec counterpart...on June 13 to explore the possibility of entering into a new long-term agreement to purchase electricity",
• June 20th Peter Gregg "takes on the role of IESO President and CEO",
• June 22nd Hydro-Quebec's Steve Demers writes a "Dear Peter" letter to the new head of Ontario's system operator introducing a written proposal valid until July 14,
• July 27 Ontario's Thibeault writes the June offer was "inconsistent with our discussions in May", notes following discussions between staffs of Premier's Couillard and Wynne HQ "would be instructed to work collaboratively with IESO on enhancing electricity trade..."

I think Thibeault's July 27th is very good. To communicate why, I will focus on a short technical quote from the leaked draft agreement which explains the shortcomings of Hydro-Quebec's proposal. 

First I'll note 8 TWh, the proposed annual import level, is only slightly higher than the total annual imports into Ontario from Quebec (much of which will be wheeled through to New York). There was some noise about whether the amounts were feasible with existing infrastructure: they are.

Premier Wynne's neglecting business

"Small business optimism in Ontario took a nosedive in June."

So begins the Ontario section of the Business Barometer from the Canadian Federation of Independent Business (CFIB). The members of the CFIB have legitimate reasons to be pessimistic. In this post I will demonstrate the indifference to the needs of employers in the current Ontario government's electricity policies, with a particular focus on the unfairness of the so-called Fair Hydro Plan.

I recently spoke with Jocelyn Bamford of the Coalition of Concerned Manufacturers. The group has been in the press due to electricity cost concerns, but other concerns are newly presented to these employers, by the provincial government. I perceive 3 primary concerns:

1. Electricity
2. Cap and Trade
3. Labour costs

I'll begin with electricity. 

As context for the following information on rates in Toronto, the U.S. Energy Information Administration (EIA). American data shows U.S. residential consumers pay 86% more for a unit of electricity than industrial consumers, and about 20% more then commercial consumers. The definitions of groups don't work well in comparing to Toronto, but note small consumers pay, on average, the most per unit, and largest the least. 

On July 1st rates dropped for Ontario consumers charged on Regulated Price Plans (RPP), due to legislation dubbed a "Fair Hydro Plan" (FHP). I pulled average consumption levels for residential and other customers of Toronto Hydro from the spreadsheet accompanying the Ontario Energy Board (OEB) 2015 Annual Yearbook of Electricity Distributors, calculated average monthly figures and fed those into the OEB's Bill Calculator for Toronto Hydro customers. For non-RPP consumers (Class A and B) I found a Toronto Hydro presentation considering monthly figures for one consumer (on slides 19 and 20). There are some issues the presentation data, but the 18 cents/kWh for Class B consumers is what I expected.

Not only do "Class B" industrial users not enjoy preferential electricity pricing, they probably pay more than the average Toronto household. This is exceptionally rare. I can find instances of American utilities charging industrial consumers more than residential ones, but nothing for a decade among utilities the size of Toronto Hydro with one notable exception: Niagara Mohawk Power Corp. [1] Ontarians might be interested in knowing the territory of that utility includes the American cousins of Niagara and St. Lawrence river power plants (in Canada, Beck and Saunders). Legal cases have established set uses for the power produced by the big public hydroelectric plants in the New York. Regardless, it's been 6 years since even that utility saw residential rates lower than industrial ones.

Solar: Ontario's Base-Value Power

What is the generation source least valued by Ontario's electricity market in 2017?

That is the question I asked on twitter the other day. I know it's not the most serious format, it's a small sample size, and my running the poll means there will be selection bias in the responses. I did invite others with different views of the energy world to share it - but they did not.

I got some feedback that the question was unclear. While there are multitudes of factors impacting/corrupting the metric, this question is precise. The IESO allegedly operates Ontario's electricity market, they do publish summaries for hourly generation by fuel (xml format) and they do publish an Hourly Ontario Energy Price (.csv format).

The least valued "fuel" - or generation source - this year as the 22nd of June, is the lowest valued by a big margin, lying 29% below the next least valued.

The lease valued source is the source least expected to be the least valued.

The least valued source is solar.

Which shouldn't come as a surprise. 

I'll briefly review the theory, put Ontario's experience in a broader context, and finally cherry pick one day to examine. Cynics may be surprised the day is June 12th, which is the highest demand day of 2017.

A citizen's map of Industrial Wind Turbines in Ontario

I have produced and put online an interactive map of Industrial Wind Turbines in Ontario. Having done so feel I should explain why, and how, and invite others to participate in improving data.

The map is embedded later in this post, as is a YouTube clip of me talking to its design and functionality.  I talked for longer than I expected, and I suspect I shall write on this longer than I expect too, because I think the issues of public data availability is important, and I have a particular fascination with data mining, manipulation, presentation and technology.

There was a paper published late in 2013 titled Mapping Ontario’s Wind Turbines: Challenges and Limitations. The abstract began:

Despite rapid and vast development of wind turbines across the Canadian province of Ontario, there is no map available indicating the location of each wind turbine. A map of this nature is crucial for health and environmental risk research and has many applications in other fields.

These seem like noble goals, so it might be surprising there's not a single official source of spatial data 3-4 years later.
The scope of the desired map was described in the paper:

A map showing individual wind turbines would be a valuable resource for researchers to examine health effects, as the distance that a resident lives from a wind turbine could act as a proxy indicator of a "dose" and could be used...

This is one example, but it could be measured against a lot of things - bat counts, bird carcasses, house and farm values, household income. The possibilities need not be known, only the data requirements, and most of these were described well years ago.

Ontario electricity: How we got to here

It is the best of times, it is the worst of times.

The best: over the first five months of 2017 the reporting from Ontario's system operator (the IESO) indicates less than 2 terawatt-hours (TWh) of electricity has been generated from natural gas fueled facilities, with the remainder of 59 TWh generated on the IESO system coming from near-zero greenhouse gas emission sources. Since April 2014 coal has not been burned to produce electricity in the province. Emissions intensity of generation over the first 5 months of 2017 is approximately 14 grams of CO2 equivalency per kilowatt-hour (g CO2 eq / kWh), which is particularly low for a jurisdiction receiving less than 30% of its generation from hydro-electric sources.

Some things will be viewed as good, or bad, depending on the perspective of the observer: the last two months demand of IESO supply has been lower than in any month since 1994. If "conservation" is good, it would seem Ontario has it good. Supply is plentiful. So plentiful the IESO reported 19 per cent of of "wind energy produced in the province" was dispatched down (curtailed) in 2016, and Ontario Power Generation (OPG) reported 16% more hydroelectric generation could have occurred if not for surplus supply. The numbers on the surplus in 2016 are noteworthy: 7.6 TWh curtailed equates with 5.5% of the 137 TWh "withdrawn from the high-voltage transmission system by Ontario loads", but a further 21.8 TWh was exported meaning total supply (including imports) was 21.5% more than those loads required.

Some things are now viewed as bad, that were previously viewed by some as good. Regulated Price Plans charging residential, farms and other small business consumers what the government had longed planned to have them paying are suddenly being cut steeply through a debt scheme to be paid off whenever down the line. In order to keep cost hikes in line with previous projections the government already had to abandon first the collection of a Debt Retirement Charge and then the provincial portion of the Harmonized Sales Tax - some feel the lower government revenues a negative.

I've written often on the causes of higher rates in Ontario. I am inspired to do so again by the uncovering of documentation from a previously hidden Integrated Power System Plan in 2011. Shawn-Patrick Stensil, of Greenpeace, acquired the documents through a long Freedom-of-Information (FOI) process.

This post examines 3 long-term plans' annual forecasts of Ontario's electricity supply mix, with a focus on the capacity mixes forecast for 2016 compared to the current actual supply composition.

The current situation is not accidental.

This is how we got to here