On December 2, the Ontario government released an updated Long Term Energy Plan (LTEP). Like the previous iteration of the LTEP released in November 2010, this version was released in the run-up to a provincial election and has more the character of an election platform document than an energy plan.
The LTEP has some solid components, including the plan to proceed with nuclear refurbishments one unit at a time at both Bruce and Darlington, thereby keeping Bruce Power and OPG on accountable for their performance. Another potential enhancement discussed in the plan is strengthening the east-west transmission connection over the top of Lake Superior, which would enhance the security of supply and efficiency of operation of the power system in north western Ontario. A future post will address the government’s biomass strategy, where I also see some value. It is also possible that the annual Ontario Energy Report promised in the plan could provide value. Here is my proposal for content such a report should include.
The updated LTEP repeats the government’s practice of violating their own energy planning principles once enshrined in law. Once upon a time, Ontario law required power plans to be produced by independent, qualified energy professionals, updated every two years, and reviewed in a public process by the Ontario Energy Board where rules of transparency would apply. None of these rules apply now. Instead, Ontario’s electricity future is all politics all the time.
Pollsters and lobbyist have supplanted engineers and economists as the principle architects of the updated plan.
One indicator of this shift is the positioning of conservation. Minister Chiarelli never misses an opportunity to inform us that if consumers don’t like their bills that just proves that they aren’t conserving enough. Minister Chiarelli’s claim that conservation will reduce costs is nonsense. If conservation was going to help us reduce the amount of new power generation capacity the government buys, why is the government still buying and approving for final implementation a massive amount of new generation capacity while Ontario exports power at a frightening loss (here is another one)? (See Parker Gallant’s excellent review of export loses in the National Post today.) Mr. Chiarelli’s talking point about how conservation will save us money also fails to account for the fact that the total power bill for Ontario, stretching out many years into the future, is now fixed. Irrespective of how much electricity is sold, consumers still have to cough up the same fixed amount of cash. A key driver for increased rates since 2006 has been falling demand. In addition, although many government agencies, including the Ontario Power Authority, the Environmental Commissioner and the Ontario Energy Board, support the government’s claims that conservation programs are good value for money, no independent research has been published to my knowledge on the costs and benefits of the government’s conservation programs.
The revenue requirement unpinning near term rate outlook in the revised LTEP is almost unchanged relative to the outlook a year ago obtained through FOI. My previous review of the revenue requirement evolution, including a column published in the National Post, focused on the role of previous Energy Minister Chris Bentley in backing away from some of the costly, wasteful components of the first LTEP. From the vantage point of revenue requirement, Minister Chiarelli is providing no value added for consumers.
The updated LTEP provides no break down of the cost components of future power bills. This information gap thwarts observers who might want to track actuals vs. forecast. Similarly, the updated LTEP provides no information on the amount of power generation curtailed or dumped due to surplus power.
The new LTEP signals the intention of the government’s intention to more actively politicize the public education curriculum to promote that government’s current opinions about energy and the environment.
The LTEP2 also announces the government’s intention to continue pushing “Smart Grid” and electricity storage, however in neither case is any supporting business case provided.
Here are podcasts of two of the interviews I did today reviewing the new LTEP:
From CFRA, look for “Former Executive Director of Energy Probe, energy consultant Tom Adams” December 3 (7:20).
From CBC Ottawa Morning, look for Power Play starting at 15:00.
Post Script December 5, 3 pm: I should have noted previously that LTEP2 encourages the Crown corporations OPG and Hydro One “to explore new business lines and opportunities inside and
outside Ontario.” Expanding the mandate of OPG and Hydro One to grow into new business areas could increase the investment risk that taxpayers already have in these government agencies.
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“Minister Chiarelli never misses an opportunity to inform us that if consumers donâ€™t like their bills that just proves that they arenâ€™t conserving enough.”
Nobody wants to hear that they made or may be making poor choices, I agree. The fact of the matter is, presuming that you have access to gas heating and gas hot water, if your home or condo is consuming more than ~6000 kWh/year, you are very likely consuming too much. My home used to consume 11000 kWh/year, typical of the average Ontario home, and now consumes 4000 kWh/year – same kinds of equipment, same standard of living, >@6% return on investment. My bill without conservation – >$160/month. with conservation <$60/month. The McGuinty government took little responsibility for rising rates, agreed, but should we mimic them by taking no responsibility ourselves?
"Minister Chiarelliâ€™s claim that conservation will reduce costs is nonsense."
If we stop approving unneeded (which right now means any) generation, it will. Otherwise, I agree. As demand drops, fixed costs are allocated over fewer kWh. Our problem is that we are not very good at managing contraction.
BC Hydro did estimate the total resource cost of conservation in its Draft 2012 IRP (see Figure 6-10 – I can send if you want). Under all DSM portfolios, it was below $40/MWh, and including benefits was below $15/MWh under all DSM portfolios. $15/MWh!! Even if Ontario produces a surplus due to DSM at $25/MWh that it sells on the market (where prices average higher than that) then I do not see the concern, other than that we should continue to shed more expensive supply side resources to keep the surplus to a minimum. What matters more is if we produce a surplus through new or refurb generation at much higher prices (even coal would be much higher than $25/MWh). A surplus is not a surplus is not a surplus.
You once called on this blog for a moratorium on all new generation until we had a proper system plan reviewed by the OEB through a proper process. Have you changed your mind in your support above for nuclear refurb, even on a stepped basis? Nuclear refurb is effectively new generation, and it will not be done for less than the market price (not even close), and certainly not less than the cost of conservation.
Stick to your guns. We can conserve more for peanuts compared to all new generation. Once conservation approaches the marginal cost of new generation, then we can consider new generation. My guess is that we are at least a decade from that point.
I suggest that whereas the cost estimates of Official Ontario for how much money is spent on conservation programs should be presumed reasonable, the effectiveness of this spending in terms of savings achieved should not be trusted.
Here are some of the components of conservation costs Ontario taxpayers and ratepayers are covering:
LDCs in 2012: $136.2 million (ref: http://www.ontarioenergyboard.ca/OEB/_Documents/EB-2010-0215/CDM_Summary_Report-2012_Results_20131205.pdf)
OPA program spending in F2012: $301.1 (ref: http://www.powerauthority.on.ca/sites/default/files/news/OPA-2012-AR.pdf)
Ministry of Energy home audit and retrofit from 2007-2012: $564 million (ref: http://www.energy.gov.on.ca/docs/en/Energy2012-13RbPBriefingBookPARTI-English.pdf)
What do we get for this expenditure of over half a billion dollars per year (other than “green jobs” in government agencies)?
Look at where some of this money goes. The OPA has a coupon program that gives discounts on compact fluorescent light bulbs, a program identical to one offered by the old Ontario Hydro more than 20 years ago. Would the customer participating in the program have bought the bulb without the program? How much of the consumption change in electricity going on is due to drastic price increases and official promises of more exciting increases in future? Does the new bulb replace a less efficient bulb? Does the customer leave the new, more efficient light on longer than the old bulb? The OPA claims to know the answers for all these questions and has vast, vast amounts of documentation to paper over the inherent uncertainty of measuring the effectiveness of paying people to not use electricity.
On the question of a moratorium, I am still convinced that a moratorium combined with a thorough, fact-based review of where we stand is required. However, I am not confident that such a moratorium is going to happen any time soon.
Don’t disagree. The OPA programs have not performed as well as those in neighbouring jurisdictions. There also appears to be no role for codes and standards, which seems like a no-brainer given results in other jurisdictions. Again, a proper review of a variety of DSM portfolios as part of an integrated resource plan review in front of the OEB is what is needed. I am not confident that will happen either.
“How much of the consumption change in electricity going on is due to drastic price increases and official promises of more exciting increases in future?”
That is a good question, and I have been trying to find up-to-date answers. Nobody seems to know.
This government can’t afford to hve a fact based review of its energy policies. They would never stand a chance of being re-elected if that happened.
They are convinced that enough energy can be extracted by IWTs and solar panels to supply the energy needs of Ontario. The whole science of this is just ignored.
A great many of the people involved in this situation are lawyers, political science majors, social scientists and business people who have little to no scientifc education and those who do have science backgrounds choose to ignore the science for the sake of money.
My Hydro bill runs ~ $130/mo. after conservation measures which has doubled what it was. If I conserve anymore, I won’t have any lights at all or maybe just night lights. I heat with gas , have all new windows and doors and my insulation is the same as that required for electric heat.
Did you say you are getting by at $60/mo.?
Also bought new “energy star” appliances.
Even on very cold sunny winter days my house heats to about 21-22 degress C with passive solar energy.
Yes, my consumption is about 4,000 kWh/year and my total electricity cost (including the clean energy benefits and HST), is about $700 for the year, or less than $60/month. It sounds like you are doing many of the right things, so I am not sure why you are not getting better results. More or less in decreasing order, these are the electricity pigs:
– electric heating (which you do not have)
– electric hot water heaters
– air conditioners
– electric clothes dryers
– other appliances
– computers/ TVs (some of the new TVs are surprising energy hogs)
Your bill may also be higher due to higher local distribution charges or if you are in a remote location , putting you in a different (more expensive) residential service area.
Am in Hydro One which does have higer costs but not in a remote area. No AC and no electric dryer. Hot water temperature has been reduced.
My point is that you can’t conserve your way out of these high energy costs as it is not the energy but the other charges that are on the bills.
You could use almost no electricity and still be stuck with these other charges and then the other charges get taxed along with them.
Every time the Hydro bills go up the taxes on the bills goes up and this is a win-win situation for the government.
The same thing is true for the price of gasoline in Ontario. Got gas in the States for $3.14/gal a couple of weeks ago and at the same time it was around $1.20/liter here. High gasoline prices yield high taxes for the government and this is also a means of reducing the amount people can drive. Those who live near the border do very well crossing over to get gas and do all kinds of shopping.
Don’t people know how much high energy prices here cost the Canadian economy as a whole?