Parker Gallant: Ontario's smart grid--expensive, but not 'smart'

On November 23, 2010, Ontario’s then Minister of Energy, Brad Duguid, issued a directive via an Order In Council to the Ontario Energy Board (OEB), with instructions on the “smart grid”:

“…it is desirable that the Province and the Ontario Energy Board move forward together with a plan to implement the advanced information exchange systems and equipment that together comprise the Smart Grid (“Smart Grid”), as defined in the amendments to the Electricity Act, 1998 made by the Green Energy and Green Economy Act, 2009…”

   The Duguid directive was a direct result of the Dwight Duncan directive of 2004 to the OEB instructing them to arrange the installation of “smart meters” throughout the province. 

   Co-incidentally (noted by Tom Adams), the Duguid directive is dated the same day as the e-mail exchange between Alicia Johnston (formerly a senior political staffer for Energy Minister Brad Duguid, later promoted to the Premier’s Office) and Ben Chin (a senior Ontario Power Authority executive).  That e-mail exchange contained Ms Johnston’s suggestion to engage Tyler Hamilton, a  contributor to Toronto Star, as an “expert” to counter the  Adams and Gallant duo who “are killing me” ; Chin agreed. Shortly after, Hamilton received a contract from the Independent Electricity System Operator (IESO) for a report on the smart grid.

    The fact is, the Independent Electricity System Operator or IESO had already started work on the “smart grid” as noted in the Financial Post article on July 6, 2010 — costs of development were estimated at $1.6 billion.  IESO had awarded a contract to IBM according to a January 15, 2007 press release; the purpose of the contract was defined as:  “the development and operation of Ontario's Meter Data Management/Repository (MDM/R).”

A culture of conservation

The MDM/R is explained as: "a core part of Ontario’s Smart Metering Initiative to drive a culture of conservation, enabling the billing of Time-of-Use rates and encouraging consumers to shift more of their energy use to off-peak periods.” The initiative would apply to 4.7 million customers of local distribution companies, involving more than “100 million transactions every day."

   More than six years later, that “Repository” has yet to generate reports on either shifting consumer habits or “imbedded generation.” (Embedded or distributed generation is usually a small scale production of power connected within the distribution network and not having direct access to the transmission network. These generators are typically located close to the electricity consumer.)

   But that hasn't stopped IESO from awarding IBM yet another five-year contract for $68.5 million for the same “repository” with an option to extend the contract seven to ten years. With an estimated 100 million data feeds daily from “smart meters” one would expect that data to be accessible to determine what production comes from embedded generators such as rooftop or ground-mounted solar, to reinforce the “culture of conservation” and identify shifts in consumer habits. 

  Is this a missed opportunity for a cost/benefit analysis?

  On July 16 of this year, Energy Minister  Bob Chiarelli arranged a press release about conservation and claimed that “Ontario has saved billions of dollars through conservation, and we have a clear opportunity to do more. By investing in conservation before new generation, where cost-effective, we can save ratepayers money and give consumers new technology to track and control energy use.”

  What caught my eye in that press release were the endorsements: they were not from the usual climate change chorus such as Environmental Defence, CAPE,or the Ontario Clean Air Alliance. The last one was  “Sheldon Levy, President, Ryerson University.”  What would possess the President of Ryerson University to jump on this band wagon? 

  A month later, we have the answer:  on August 26, 2013  a news release announced that Ryerson University's Centre for Urban Energy(CUE) “will build an innovative smart grid laboratory” with support from the province.  The press release doesn't say how much the province is coughing up but does say “Building a smarter grid is an important part of the Ontario government's plan to modernize the electricity system in the province and provide clean, reliable and affordable power to consumers.”  One can assume President levy’s endorsement of the July conservation announcement was sought by the Ministry as a condition of support for  the smart grid laboratory.  CUE was launched in 2010 with $7 million in grants from taxpayer-owned Hydro One, Toronto Hydro and the Ontario Power Authority.

  A  Globe and Mail article dated October 17, 2012, called “The tricky business of funding a university” carried the following comments about Ryerson's CUE:

“Some schools have tiptoed the line successfully. Toronto's Ryerson University launched its Centre for Urban Energy (CUE) two years ago using $7-million in contributions from three partners – Hydro One, Toronto Hydro and the Ontario Power Authority – and is now hoping to enlist new collaborators such as Siemens and General Electric.”

   It appears that President Levy knows exactly how to “tiptoe the line.” CUE's intentions to collaborate with GE and Siemens are also interesting.  An announcement by Minister Chiarelli on July 2, 2013  indicates that the $50-million “Smart Grid” fund has already provided grants to GE, Siemens and IBM.

   Just asking: did the grants to GE and Siemens carry a proviso that they collaborate with CUE and did they both seek those grants?  It is not clear why IBM would need a grant as they have been awarded two long-term, multi-million dollar contracts from IESO.  The press release indicates the IBM grant was to create a centre “that will use and analyze smart meter data” which is what they are already supposed to be doing for IESO under the terms of the contract(s)!

Government grants to huge corporations

   So, we hand out grants to multi-billion dollar corporations such as GE, Siemens and IBM and  award them government contracts.  The first two entities are entrenched in the renewable energy business (turbines and blade manufacturing) so, to an extent they are dependent on commitments to more wind power by the Ministry of Energy. And, IBM won two contracts related to the data analysis of 4.7 million smart meters installed throughout the province.

  (I checked the Ontario Lobbyist Registry and could only find GE with registered lobbyists.)

   As noted above, the original estimate to create the smart grid was $1.6 billion, to be paid by Ontario's ratepayers.  IESO stick-handled the first smart grid rate application through the OEB and ratepayers have paid for it since May 1, 2013.  It is included, but hidden, with the delivery costs charged by your local distribution company (LDC).  It is a charge of .79 cents per month and referred to as a “Smart Metering Entity charge.”  Your LDC will collect this for the next five and a half years.  Doing the math on this rate hike indicates that it will cover $245 million of that $1.6 billion —so be prepared for further “hidden” increases as spending is ramped up. 

   As noted, the MDM/R definition it is really all about conservation and enabling those 72 LDCs to bill on a Time-of-Use basis.  Those “smart meters” and “smart grid” will cost ratepayers $4 billion and will not produce one kilowatt of new power.  I suspect that Environmental Commissioner Gord Miller doesn't consider the above costs or the costs of the smart meters, when he presents his annual report to the Minister of the Environment.  The Commissioner's cost/benefit study uses only the annual spending of the Ontario Power Authority (media advertising, free fridge pickup, coupons to purchase CFL bulbs, etc.) which paints the cost of “conservation” as only three cents per kilowatt hour. 

   In addition,  a posting on Scott Luft’s website indicates that time-of use pricing has shifted consumers’ energy use to what used to be “off-peak” periods (noted as an objective of the MDT/R). As a result, those periods have now become “peak” demand periods for ordinary consumers, beginning at 7 PM, rather than mid-day.  Ontario's ratepayers are now trained to eat our supper and wash our clothes later, not because we want to, but because electricity has become so costly we only use it during the off-peak hours!

   Perhaps the Dalton McGuinty government should have simply doubled the price of electricity when they came to power in 2003 and we would have immediately started to conserve.   Think of the money we could have saved, the countryside we would not have despoiled with industrial wind turbines, the harm to health not caused, the birds and bats not killed, and the property values that would nothave fallen!

   Too bad politicians don't grasp the simple law of supply and demand.

Parker Gallant.

September 11, 2013

The opinions expressed are those of the author and do not represent Wind Concerns Ontario policy.

Article any source

What’s wrong with Energy in Ontario? Yes Ministers, Not “Yes Minister”

Unlike the brilliant BBC satire, Yes Minister, in which a minister of the Crown makes decisions with the advice of staff, Ontario’s energy portfolio has been headed by ministers who are inclined to say “Yes” when confronted by environmental non-government organizations (ENGOs).

   On June 2, 2008, the Toronto Star published an article by Tyler Hamilton, former environmental columnist for the paper, that described the ideas formulated by the ENGO crowd, including quotes from David Suzuki, Kristopher Stevens, Executive Director of the Ontario Sustainable Energy Association, as well as Deborah Doncaster, who was and still is heading up the Community Power Fund (a fund granted millions of dollars by those “Yes Ministers” of the McGuinty government).

    Doncaster once made a presentation to the committee established to review the premise of the Green Energy and Green Economy Act (GEA) and said this:  “Finally, we believe that one of the most significant features of the act is that it will create jobs—tens of thousands, hundreds of thousands of jobs.”  We are still looking for those “hundreds of thousands of jobs.”  

   Marion Fraser, who claims “architect” status of the GEA, was also quoted in that Tyler Hamilton article.

    The fact is, the individuals instrumental in persuading the then Energy Minister, George Smitherman, to produce the controversial GEA  are still around and are as active today as they were in 2008. 

    Ontario has had six Energy Ministers since the start of 2008 (Gerry Phillips served twice) making the average term less than a year.  In that period, the various ministers issued 45 directives to the Ontario Power Authority dealing with all aspects and types of generation, smart meters,  smart grids,  transmission, conservation, grants (via the Community Power Fund), etc.  Is it really possible to understand Ontario’s complex electricity system in less than a year? Or is it possible that there is influence from individuals who are designing a system that will be beneficial to them and their close business associates?

    We are now about to see the current Minister of Energy Bob Chiarelli demonstrate his knowledge as he launches a purported  redesign of the Long-Term Energy Plan (LTEP) together with the Feed-in Tariff (FIT) and MicroFIT programs and the process for siting large generation projects.  The LTEP was a creation of Energy Minister, Brad Duguid, who launched it in November 2010 approximately one year after his appointment as Minister. 

     Premier Wynne is big on “conversation” so Minister Chiarelli says he wants one with all interested parties.  The conversation is off balance, however, in that it appears that many conversations are one-on-one with ENGOs.  Look at the submissionmade by the Ontario Sustainable Energy Association (OSEA) on June 7, 2013 and you’ll see that conversations with the rest of Ontario will be taken with the proverbial grain of salt.  OSEA’s suggestions include the establishment of two committees to recommend changes to both the siting of large generation projects and the MicroFIT program.  In other words, the changes should be overseen by the very people who were responsible for the design of the GEA! 

    Worse, it seems the intent is to continue actions spurred by the GEA that increase electricity costs, and benefit only those involved in sectors of the renewable energy business. To hell with Ontario's ratepayers and taxpayers!  

    Will this Minister abide by their wishes?

    Wind Concerns Ontario (WCO)  has already seen evidence that the concerns of rural Ontario will be ignored.   WCO's submission to the joint task force (IESO/OPA), to review the “siting” of large energy projects was made after intense discussion and deliberation, and with the best of intentions.   The recommendations of WCO, and those of other stakeholders, were basically ignored in the OPA/IESO document provided to Minister Chiarelli on August 1, 2013, although they at least noted our involvement.

    The WCO and many community groups have encouraged and supported rural municipalities to pass resolutions to indicate they are “not a willing host” to monstrous industrial wind turbines; currently, 62 municipalities have done so. The submission by the joint committee on the “siting” aspect made no mention of the “willing host” concept.

   The principal influencing ENGO is OSEA, which not only published its June 7 recommendations, but also organized a “webinar series” in August, aimed at developing further input.  In a brazen demonstration of confidence in their role as an influential organization, they even invited Colin Andersen, CEO of the OPA, to join them.  (He wisely declined.)  The webinar panel is identified on the OSEA website and includes such luminaries as Chris Benedetti of the Sussex Group,  (which famously was seen in a leaked strategy documentrecommending that the Liberal Party “dupe” the public about the true cost of the  government's push for green energy), and others who directly benefit from the FIT and MicroFIT program.  

    No doubt the post-webinar OSEA recommendations presented to Minister Chiarelli (who met personally with Kristopher Stevens of OSEA recently) will favour the companies and individuals who benefit from the continued largesse of the GEA, FIT and MicroFIT programs. 

    I expect that when the current Yes Minister of Energy Mr. Chiarelli deals with the LTEP he will do as his predecessors have done— ignore the public and accommodate the ENGOs.  Ontario ratepayers and taxpayers will continue to hand over their hard earned income via their electricity bills, to fulfill the ENGOs’ “green” dreams.

   

Parker Gallant,

August 15, 2013

The opinions expressed here are those of the author and do not necessarily represent the policies of Wind Concerns Ontario.

Scene from the BBC hit comedy, Yes Prime Minister, in which Sir Humphrey explains the balance of power in government decisions to Bernard
Article any source

Is the OPA up to the job?

Ontario gas plants and the future of power: is the Ontario Power Authority up to the job?

 Gas plant cancelled for political expediency, millions wasted

The Auditor General's report dated April 2013 on the Eastern Power Mississauga gas plant contained the following remarks:

 “Eastern Power was awarded three of the seven contracts, including one for the Greenfield South Power Plant. This was proposed as a 280-MW combined-cycle gas-fired facility to be located in Mississauga and to operate over a 20-year period. Ultimately, it was the only contract Eastern Power executed. For various reasons, including Eastern Power’s challenges in securing financing, the other two projects were terminated. The Greenfield South contract was signed in April 2005.”

   It appears the Ontario Power Authority (OPA) in awarding the contracts to Eastern Power didn't bother to ensure they would be able to obtain financing, but awarded the contract(s) anyway. 

   Now, in 2013, the OPA will soon be handed the full authority by Energy Minister Bob Chiarelli to ramp up their powers to negotiate and sign competitive contracts, as part of his idea of how to fix the feed-in tariff (FIT) program.   Minister Chiarelli directed the OPA via his June 12, 2013 directive to make the following change to the FIT program:

“Replacing the Large FIT program with a new competitive procurement process and working with municipalities and Aboriginal communities to help identify appropriate locations and siting requirements.”

   That “gas plant scandal” the Liberals have been dealing with was partially caused by the OPA's prior actions as the Mississauga plant was to be up and running by 2007; yet the Minister is now proposing to give them moreauthority.  Past and present Energy Ministers appear to think the bureaucrats that made mistakes in the past have learned their lesson.  Or have they?

   Recently The Hill Times (Ottawa) did a complete review of the “energy” scene in Canada and took the time to do an article on the Ontario electricity sector and its push for renewable energy via the Green Energy and Economy Act. The following quote from Ontario's Energy Minister, Bob Chiarelli appears:

“He also outlined a number of other incentives for municipal participation in the renewable energy sector, including making it easier for cities[my emphasis] to become equity partners in wind energy projects and provisions for increased tax and assessment revenues from turbines. “And that will be retroactive—it includes existing turbines as well,” Mr. Chiarelli added.”

   I'm not sure how that last comment will play out as the “assessment” on wind turbines was defined by the previous Finance Minister, Dwight Duncan, who instructed the Municipality Property Assessment Corporation (MPAC) to assess a maximum taxable assessment of $40,000 per megawatt (MW).  If the contracts executed by the OPA carry guarantees on the assessed values, we should expect threats of further lawsuits, and unless Chiarelli has got clearance from current Finance Minister Charles Sousa, his premise may be dead in the water.  Nevertheless the many processes recently announced by Minister Chiarelli are moving forward, but most anti-wind turbine groups see this whole exercise as a worthless “conversation” (to paraphrase Premier Kathleen Wynne).   Those groups are also having trouble understanding what “cities” have to do with the process when it is chiefly rural communities that are affected.  I am confident Minister Chiarelli would have difficulty pointing to a major wind turbine development near any “city” in Ontario.

   In any event it appears to this writer that the OPA, charged with running this new “competitive procurement process” may be challenged as the Mississauga Greenfield project and another contract they awarded has recently demonstrated. 

   A recent case has surfaced: a small OPA contract of 6.15 MW awarded to Redbird Energy, reportedly chaired by  Kevin Loughery.   The President is listed as Nancy Loughrey and coincidently, an Internet search turns them up (or two people connectedwith the same name) in Atlanta, Georgia.  As a further coincidence the FBI in the U.S. has charged a Kevin P. Loughery with “wire fraud” for using investor funds for his personal use. 

   Is the chair of Redbird, described on the Redbird website as “Kevin has been actively involved in reviewing and assessing renewable energy companies and projects since 2006 and brings 20 years of investment experience as a stock broker for Bear Stearns, a currency trader for Thomas Cook, etc.”  and the person charged by the FBI one and the same?  If so, it appears the OPA awards contracts to companies possibly controlled by individuals charged with fraud. 

   I'm sure this latest finding will provide Minister Chiarelli with even more confidence in the OPA's abilities to negotiate future contracts.

   This recent example and the past history of the OPA's awarding of the Eastern Power/Greenfield contract(s) fails to provide the voters, taxpayers and ratepayers of Ontario with confidence in the  process that the previous and the current Ministers of Energy seem to feel is active in the OPA.    

   We Ontarians have certainly had our share of scandals over the past 10 years; at some point someone must draw a line in the sand—it appears the government won't!

    Now is the time!

Parker Gallant

August 13, 2013

The opinions expressed in this posting are those of the author and are not necessarily the policy of Wind Concerns Ontario.

Article any source