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Electricity exports cost Ontario taxpayers $200 million in June

BY , QUEEN’S PARK COLUMNIST

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TORONTO – Electricity watchdog Parker Gallant keeps a wary eye on energy prices in this province.

In a recent post on the website www.windconcerns.ca, Gallant points out the government paid $200 million in June to dump electricity at a loss.

Gallant, vice-president of Wind Concerns, estimates 1.9 terawatts (TWh) of Ontario’s electricity production (15.2% of Ontario’s demand of 10.6 TWh) was exported to Michigan, New York and Quebec, in June.

Ontario was paid $29.1 million for those exports. Unfortunately, it cost provincial ratepayers $249.9 million to produce that same electricity.

Here’s the math: Ontario exported the power at the Hourly Ontario Electricity Price (HOEP) of $15.31/megawatt hour (MWh) or 1.53 cents per kilowatt hour (kWh) for $29.1 million. However, the cost to produce and transmit that 1.9 TWh, was $131.43/MWh (13.14 cents/kWh) — or $249.9 million.

“Most of that wound up in the big (and growing) pot referred to as the Global Adjustment (GA),” Gallant reports.

“So Ontario’s electricity ratepayers picked up the difference of $221 million, which when added to our export losses for the prior five months of 2015, brought costs to almost $1.1 billion for the first six months of 2015,” Gallant said.

Seniors weep when they open their hydro bills. Often they must make a choice between heating their home or buying groceries. And yet we’re paying millions for neighbouring jurisdictions to take excess electricity off our hands? It’s unconscionable — the outcome of a failed Green Energy Act that’s cost this province billions of dollars and hundreds of thousands of jobs.

Now these same people who destroyed our once magnificent hydro system are planning to take over pensions from the private sector?

Be afraid. Be very afraid.

This isn’t new. In his 2011 report, then-auditor general Jim McCarter reported from 2005 until 2010, consumers lost $1.8 billion on electricity exports.

When I asked Energy Minister Bob Chiarelli about the latest $200 million loss, he seemed unaware of it, claiming the province makes money on such deals.

His spokesman got back to me later.

“The electricity system is planned to meet peak demand which can, from time to time, lead to excess supply during unexpectedly low demand periods,” said Matt Whittington.

“During these times, Ontario exports to our neighbours when we have available power and we also are able to rely on imports of power from our neighbours when it is cost-effective. Exports reflect the prevailing market price and are scheduled when it is economic for both Ontario and the associated importing jurisdiction,” he said.

The Independent Electricity System Operator (IESO) estimates, Whittington said, the benefit to Ontario from electricity trading in 2014 was approximately $320 million — which Gallant disputes.

Tory leader Patrick Brown said Liberal policies are making it harder for families to make ends meet.

“At a time when Ontario has the highest hydro rates in North America, the Liberal government should be looking for ways to reduce the financial burden on Ontario’s families and create an environment that allows businesses to invest in our province,” he said.

“Instead, today we learn that the Liberal government’s photo-op environmentalism will cost Ontarians more than $1 billion in the first six months of 2015 alone,” he said.

New Democratic Party deputy leader Jagmeet Singh blames the boondoggle on private power deals.

“Ontario families and businesses are paying for electricity that gets dumped into the U.S. at deep discounts,” Singh said. “While Ontarians pay more and more for hydro, we’re subsidizing electricity that lights the New York skyline. It’s bad for jobs, it’s not fair to families, and it’s bad for businesses.”

You know, if the Liberals hadn’t botched the electricity file, we’d all be paying less for hydro and could all retire earlier. And you really sure you still trust them with your pension?

Better stock up on cat food.

http://www.torontosun.com/2015/08/12/ontario-taxpayers-spend-200-million-on-exported-electricity-in-june

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