Here are notes from my appearance before the Ontario Legislature’s Social Policy Committee, October 29, 2018 commenting on the Repeal of the Green Energy Act (Bill 34). (check against delivery)
Thank you madam chair and Committee members. My name is Tom Adams and I appear as an unaffiliated private citizen.
Bill 34 claims to repeal Dalton McGuinty’s signature legislation — the Green Energy Act.
Gross inefficiencies plague Ontario’s electricity consumers, many arising from that legislation. Good riddance.
However, Bill 34 focuses only on one of the least damaging elements of the original Green Energy and Green Economy Act — the role of municipal governments in siting certain types of power generation projects — while preserving the core of the McGuinty government’s original legislation.
While Ontario’s electricity system has some strengths — reasonable reliability and low emissions of conventional pollutants — the overall health of the system is poor and deteriorating.
Rates are too low to recover costs yet so high they exceed competitive market value. Consumers are burdened under a surplus of capacity arising from gross policy negligence over the last decade. A huge portfolio of long-term liabilities far greater than the inherent value of the underlying assets casts a pall over the future. Ontario’s core generation assets — our nuclear plants supplying over 60% of our energy at present — are almost all at the end of their initial design life and are facing retirement in the case of Pickering and in the midst of risky refurbishment investments in the case of Darlington and Bruce B.
It also bears recalling that the last three premiers of Ontario left politics sullied in no small measure by their electricity policy misadventures.
The original Green Energy and Green Economy Act had Schedules A through L impacting nearly every corner of Ontario’s power situation. By contrast, Bill 34’s changes are almost exclusively limited to Schedule A of the original Act. The new legislation restores some municipal government zoning powers, but the original law’s essential core remains intact. That core is empowering government ministers to control Ontario’s energy future at whim. Too often, the result of this governance model has been decisions based on political expedience while causing long-term harm to consumers.
Claims that the new legislation, Bill 34, will stop needless wind and solar miss the point. Growth of these generation types substantially halted long before this legislation arrived. More importantly, Section 25.35.1 of the new Act empowers the government to push silly energy schemes by simply issuing a so-called “designation” (the new word for “directive”).
While it is beneficial to the public interest to have input in power system planning from municipalities hosting new power generation developments, it is an exaggeration to claim that Bill 34 “repeals” the Green Energy Act.
Where the original Green Energy and Green Economy Act articulated in legislation a comprehensive program of central planning, Bill 34 adjusts this program only slightly by introducing another layer of government into the mix.
After Bill 34 passes, central planning will remain the core of Ontario’s power system governance. The minister will still have the power to issue directives to distributors through the OEB, control whether the OEB conducts hearings, control so-called “smart grid” investments (which has delivered little or no net value for consumers), and will still be able to control transmission and distribution systems through directives.
Bill 34 explicitly preserves the power of government, created by the original Green Energy and Green Economy Act, to order any person to disclose to the government their data on energy and water use. This is an invasive authoritarian power that could be abused. A disadvantaged party has no recourse under Bill 34. Notice also that Bill 34 leaves intact government’s authority, again created by McGuinty’s original GEGEA, to order energy providers to disclose anybody’s energy data (S.15.2.5) and empowers the government to publish a customer’s private information (S.7.2).
The last time Ontario’s electricity situation was independently reviewed in a holistic way by an official inquiry was the Advisory Committee on Competition in Ontario’s Electricity System, under the chairmanship of Donald S. MacDonald, a great Canadian who sadly passed earlier this month. MacDonald’s Committee reported in May 1996. It recommended a balanced mix of independent, professional public utility regulation for monopoly aspects of electricity service and competition for those elements suitable for competition. Had the MacDonald Committee’s recommendations been followed, we’d be far better off today.
Despite more than two decades of official statements about Ontario’s power situation being subject to “unprecedented change”, the circumstances of Ontario’s power situation today are strikingly similar to those that prevailed 21 years ago, particularly the current trajectory dragging the system into insolvency.
The only sliver of the original GEGEA worth preserving is the government’s authority with respect to energy efficiency labelling on appliances. Except for that, the Green Energy and Green Economy Act ought to be comprehensively repealed.
As long as this government leaves the core of McGuinty’s legislation in place, this government is expressing a preference for a politized power system.
Cleaning up Ontario’s electricity mess, including the Green Energy and Green Economy Act, will be a challenging undertaking. An excellent starting point for reorienting the power system toward stability and efficiency is to go back and review the work of the MacDonald Committee. I have additional suggestions on remedies we might discuss during questions.
If this government thinks the best path forward for Ontario’s power system is some version of central planning, let’s have that debate directly and do our best to create a system capable of some foresight.