Parker Gallant: the GEA is Canada's biggest Ponzi scheme

Up today on Energy Probe is Parker Gallant's analysis of Ontario's Green Energy Act. Read on for who benefits (hint: it's not you).

Parker Gallant: Ontario’s Ministry of Energy creates Canada’s biggest Ponzi scheme

The press release on September 24, 2013 from the Attorney General’s (AG) office was headlined: “Attorney General recovers $17 million for Victims of Ponzi Scheme” and went on to describe how the money had been seized and sent to the American authorities in respect to a US-orchestrated “Ponzi Scheme.”
The definition of “Ponzi Scheme” from the “Legal Dictionary” is:  “A fraudulent investment plan in which the investments of later investors are used to pay earlier investors, giving the appearance that the investments of the initial participants dramatically increase in value in a short amount of time.”
    In the case of Ontario’s Ministry of Energy those “investments of later investors” is the billions of dollars extracted from the pockets of the approximately 4.4 million ratepayers spread throughout the Province of Ontario. In Ontario, however, the extraction of monies from “later investors” is considered legal under the Green Energy and Green Economy Act (GEA) passed by the Liberal Government under Premier, Dalton McGuinty.
   McGuinty, via the Energy Minister, directed the Ontario Power Authority (OPA) to contract with investors who would be willing to put solar panels on their roof or on the ground. The OPA complied and offered above market rates and investors flocked to the OPA submitting thousands of offers and they dutifully signed them up offering to pay up to 80.2 cents per kilowatt hour.
   The OPA just released a list as of June 30, 2013 they refer to as “Active FIT Contracts”.  The list of approximately 1800 Feed-in Tariff (FIT) contracts don’t include the MicroFIT contracts but, according to an OPA spokesperson, include what the OPA refer to as “Capacity Allocation Exempt” (CAE) contracts. A separate undated list of the latter referenced as “Phase 2” has 800 contracts noted. The bulk of the two lists are “roof mounted” solar installations with a smattering of biogas, solar ground mounted, waterpower and a few others but about 85% are roof mounted solar contracts.
   Scrolling through the lists one finds many familiar names such as IKEA, Canadian Tire, Walmart, RBC, Toronto Hydro, Durham College, Powerstream, London Hydro, Loblaws, etc. etc. You also find hundreds of addresses and numbered companies that don’t identify either the “applicant” or the “supplier”. One would assume the applicant (Phase 2) or supplier (June 30, 2013 report) are one and the same but the carryover from the Phase 2 report to the OPA list switches the descriptive terminology.  
   The OPA spokesperson told me that: “Projects on the March 31, 2010, CAE list that are not on the June 30, 2013, list of active FIT contracts were those that have either been terminated or were not accepted/executed. Those projects are not included in the June 30, 2013, total of 814 MW of solar in commercial operation.”
   Investigating that premise allows you to determine that contracts on the Phase 2 list, as an example,  in the name of “Canadian Tire” or one of the “Loblaws” trade names disappeared.   On reviewing the addresses however a search reveals that both “AMP1” or “MOM Solar LP”  are listed as “suppliers” for addresses identified as “Canadian Tire” stores.  Canadian Tire, who appeared to have as many as 79 contracts (over 15 megawatts [MW]) on the Phase 2 list, is suddenly at zero (0) on the June 30, 2013 list. If those 15 MW produced at 15% of capability they would generate almost $14 million in annual revenue at $700. per MW hour and $280 million over 20 years.
   The two lists also disclose that many other retailers have taken advantage of the rates first offered for roof mounted solar over 10 kilowatts (kW) which was 71.3 cents per kWh (hour).   As another example; Loblaws has been very aggressive with 74 contracts under the “Loblaws, Real Canadian Superstores, Zehrs, No Frills” monikers and another 136 under the name of “Fresh from the Sun Energy Inc.” from the OPA’s March 10, 2010 list.  The latter were on the “Phase 2” report but the OPA listed only14 contracts and that name doesn’t even appear on the June 30, 2013 list.  So what happened?
   Loblaws and its iterations had contracts in excess of 20 megawatts (MW) of nameplate capacity.   Those 20 MW of solar roof mounted could generate annual revenue for Loblaws of approximately $18 million per annum ($360 million over 20 years) at a generation rate of 15% of rated solar capacity at an average price of $700. per MWh. Partially reviewing the OPA June 30, 2013 list, we note Loblaws are down to 74 contracts with 17.4 MW of listed capacity. The question I posed to the OPA spokesperson asked why the name change on some of those early Loblaws contracts?
   The response back was what we have come to expect and contradicted the earlier e-mail (above) from the OPA spokesperson:

“FIT contracts permit the supplier to assign the contract or apply to the OPA for a change of control. It is not unusual for FIT contracts to be assigned to another company, for ex., a subsidiary, or for a portion or all of the project to be sold to another party. Through these processes, the Supplier Legal Name would change, but the term, end date and financial terms of the contract remain the same, so there is no additional exposure for the ratepayer when these changes occur.
The contract details that the OPA can provide to a third party are subject to confidentiality provisions, which is included in Article 7 of the FIT contract, available on the FIT website. With respect to Canadian Tire and Loblaw contracts, you will need to contact those suppliers for specific details.”

   The lists include schools, municipal arenas, community centres, hospitals, etc., but don’t include the Toronto District School Boards contracts for the 311 schools that will be outfitted with solar panels according to an article in the National Post on September 20, 2013.  This will allow the TDSB to repair 32 school roofs but it's unclear how much the Board’s partner “School top Solar LP” is retaining out of the approximately $550 per MW they will be paid for the rated capacity of 33 MW. Those 33 MW should generate almost $24 million per annum or $480 million over the 20-year term of the contract. This makes one wonder if the TDSB are poor negotiators, or those school roofs cost millions each?
   In reviewing the three OPA lists it is almost impossible to connect them because,  as an example, the Fresh from the Sun Energy Inc. stores on the list fail to include full addresses and the June 30, 2013 list often does not even include an address under the multiple contacts awarded (or sold to) companies like MOM Solar LP or a supplier referred to as AMP1 (legal name) for which no information can be found!

Take the Money and Run:
As the Steve Miller Band said, “Take the Money and Run”; if I were a Loblaws or a Canadian Tire executive and wanted to reward shareholders, I would be tempted to “flip” the contracts. By simply having those contracts Loblaws and Canadian Tire have a huge guaranteed cash flow they could easily sell to a third party like Moms Solar LP (backed and partially owned by Morgan Stanley) or the anonymous AMP1! By selling the contract they can add it to their revenue stream. A search of annual reports, for Canadian Tire and Loblaws comes up empty in respect to those contracts.
   The retailers, municipalities, school boards, etc. who have obtained these contracts are either receiving a subsidy (private sector) or a hidden tax, for the benefit of the province (schools, colleges , hospitals, etc) and municipalities (community centres, local electricity distributors, arenas, etc.). Perhaps this is Premier Wynne’s reference to “revenue tools” means! All of the foregoing sell their generated electricity at prices up to 20 times the cost of power generated by OPG or Bruce Power and those same retailers, school boards, colleges, etc. buy back the power at the same (or lower) rates paid by 4.4 million residential ratepayers.      Those subsidies/hidden taxes wind up in the Global Adjustment pot and those “later investors”, pay them for the next 20 years.
   The “Ponzi Scheme” created by the GEA for just the “solar” portion of the GEA will be in excess of $1.3 billion each year for the next 20 years once the full contracted solar (approximately 2,000 MW) is hooked to the grid. The cost of the FIT contracted solar will add $300 per year to each ratepayer’s bill.
At $26 billion over the 20 year period of the contracts this must represent the largest “Ponzi Scheme” ever perpetrated  in North America and the poor ratepayers didn’t even have the ability to opt out of being a “later investor”.
   If the ratepayers of Ontario got the AG to declare the GEA  a “Ponzi Scheme” and pushed for the recovery of the billions of dollars they have been forced to pay, Minister Gerretsen would have something to really brag about!
Parker Gallant,
October 1, 2013
Parker Gallant is a retired bank executive and a former director of Energy Probe Research Foundation. As with all independent bloggers on this site, Parker’s views do not necessarily reflect those of Energy Probe.
Article any source

"He's a complete phoney": Aussie columnist on Suzuki

More from Andrew Bolt of the Herald Sun, this time exclusively on David Suzuki (previously branded as an eco-extremist by Bolt) who appeared on an Australian news magazine show. "He is a complete phoney," says Bolt.
 

Suzuki revealed as a complete know-nothing

 Oh. My. God.

David Suzuki on the very first question is revealed as a complete know-nothing. His questioner tells him that the main climate data sets show no real warming for some 15 years.
Suzuki asks for the references, which he should have known if he knew anything of the science.
His questioner then lists them: UAH, RSS, HadCrut and GISS - four of the most basic measurement systems of global temperature.
Suzuki asks what they are.
Anyone interested in global warming should know right there that Suzuki has absolutely no understanding of what he is talking about.
In my opinion he is a phoney.

The horror for us in Ontario is that Mr Suzuki has actually influenced policy in Ontario, and played on his image as an environmentalist (he is a media personality) to sway the general public into believing that invasive, unreliable, high-impact wind power is a good thing to do, no matter what the consequences.

Read the entire article here.
Article any source

Corcoran today: Ontario's power disaster

Those of us opposing industrial wind power generation projects in places where no such industrial activity should ever be, have known how crazy Ontario's power policies have been, despite the bland patronizing comments from government and the insinuations from the predatory wind power development lobby.
  In today's Financial Post, editor Terence Corcoran takes a grim view and refers to a damning new report from the CD Howe Institute.
 

New study highlights desperate need for reform the province’s vast dysfunctional and costly electricity regime
For almost five years FP Comment has inveighed against the Ontario government’s profoundly uneconomic and costly electricity regime, a dictatorial and monopolist system that uses taxes and subsidies to greenify the power system of the largest provincial economy in Canada.  As I wrote in 2009: “In the midst of a major economic meltdown, and with looming budget deficits totaling more than $18-billion, now might not be the best time for the government of Ontario to be embarking on a crushing new green energy policy that could add billions to the province’s electricity costs. But Ontario Premier Dalton McGuinty is nothing if not immune to the folly of his own righteous policies and the fiscal crisis he faces as a result.”
Since then, via former Canadian banker Parker Gallant’s ongoing series — Ontario’s Power Trip — along with reports from consultant Tom Adams and many others, the growing absurdity of the regime has been detailed and documented on this page: Rising costs, market distorting feed-in-tariffs, subsidies to wind and solar, exports of power to New York at below cost — not to mention the $1-billion scandal over cancelled gas plants.
The burden on the economy has yet to be fully measured, but the cost to consumers is easy to identify.  In 2007, the all-in retail price of electricity was 10.38 cents per kilowatt hour. Today, the price for the same electricity is about 15.5 cents — a 50% increase imposed on consumers despite a recession that saw economic growth fall along with electricity demand.

Read the entire column  here.
Article any source

Saving money with smart meters: the Liberal promise

On April 19, 2004, the Premier of Ontario, Dalton McGuinty, said in a speech to the Ontario Legislature, “Smart meters, together with more flexible pricing, would allow Ontarians to save money if they run appliances in off-peak hours.”

   A few days ago Rosemary Leclaire, CEO of the Ontario Energy Board (OEB),  delivered the following message in her speech to the  Ontario Energy Association:  “We are using data supplied by a number of utilities to analyze the impact of time-of-use pricing on peak consumption. Early results show that residential customers are cutting their consumption during high price periods and shifting their peak usage until after 7 PM.”

   The two quotes are years apart but are related.  Did we really save money by shifting usage as McGuinty claimed or was that simply political hyperbole?   Since his speech electricity rates have risen 65% and delivery rates even more.  Then, add the HST.

   The Ministry of Energy (MOE) tells us we can save moneywith smart meters:  “Shift electricity use to off-peak periods. With smart meters and time-of-use pricing, you can save money by switching some of your energy use to mid- and off-peak hours when electricity prices are lower.”

   Well, here’s the truth: the money we can save does not come, as McGuinty and the MOE suggest,  from simply adjusting our use of appliances in off-peak hours. No, to really save money, you have to leave the province for at least five months and  head south where electricity rates are much lower (See the EIA reported  all-in electricity rates here.).

   This sad truth was revealed to me in an e-mail sent by someone with an interest in my writings about the Ontario electricity sector.  He described how he and his wife save money by moving to Florida for five months every year.  In fact, he said, their travel costs are paid for with the money saved by leaving Ontario.   Here is what he said.

February in Florida the coolest month I used electric heat, electric stove, and electric water heater, plus TV, microwave, lights, computer, radio etc.  I used 479 KW at a gross cost of $48.89. That's 10 cents per kW. Meanwhile in Ontario my house at 9 degrees C with natural gas using fans, fridge on, sump pump.  Telephone and clocks on stove, microwave and radio getting power. I used 133 kW for a cost of $59.64 in an empty house. That's 44 cents a kW. When the house is occupied I use about 700 kW per month. Higher in the cooler months, I would estimate much higher in the cold ones. In April- May 2013, I used 752 kW for a gross charge of 176.00 or .234 cents a kW.
So if my winter costs were the same as April - May, my five-and-a-half-month cost is $968.  My five-and-a-half-month Florida cost averages $30.00 or $165 US.  I don't really know what my February bill would be if I stayed home--I can only assume it would be more than $176.00  If I do the Florida trip in one night, my expenses down and back are around $500 for gas, motel and food.

Florida is not the cheapest state for US electricity rates (it’s 16% under the US average) but the foregoing does highlight the cost of electricity in Ontario versus much of the US East Coast.   Those states are ones that Ontario often competes with for jobs. 

   Curiously, a side issue of the Florida story is that the principal provider of electricity is Florida Light and Power (FLP) a subsidiary of Juno, FL-based NextEra.  The company has several contracts with the Ontario Power Authority for industrial wind projects and plans to develop 600 MW in Ontario.

   One can only conclude that the Ontario Government's handling of the energy portfolio in Ontario has driven jobs south, attracted foreign companies looking for big payoffs, granted those companies carte blanche to kill, harm and harass our birds, bats and turtles, reduced our property values, caused health problems in rural communities, and, yes, driven our electricity bills up. 

   In the end it appears that McGuinty spoke the truth--he just didn't tell us we would have to leave our province for five months to “save money”. 

Parker Gallant,

September 18, 2013

PS:  NextEra contributed the maximum amount ($9,300) to the Ontario Liberal Party in both 2011 and 2012.

The opinions expressed are those of the writer and not necessarily Wind Concerns Ontario policy.

Article any source

When it comes to cheap power, who is Michigan and New York's BFF? Ontario!

Parker Gallant and Scott Luft (of the Cold Air blog) have teamed up for this disheartening analysis of what happens to Ontario's surplus power. Short answer: we're giving it away!
Here is the posting from the Energy Probe website.

Parker Gallant and Scott Luft: Michigan and New York’s best friend–Ontario

(September 18, 2013) The press releases flowing from the Ministry of Energy’s offices have been many over the past several years and claim a variety of wonderful things despite the mundane attributes of the electricity sector.
One such release dated January 12, 2012 claimed Ontario earned $13 million by exporting its surplus power in December 2011 and that it “keeps costs down” for ratepayers. It also said 20,000 jobs had been created and that the GEA was on track to create 50,000 jobs by the end of 2012. Fast forward a year and a half to a press release dated June 20, 2013 about the revised Samsung contract which claimed that the GEA had created just 31,000 jobs.
The latter claim indicates that the target was missed by at least 19,000 jobs. We now know that most of those jobs were short-term construction jobs to erect wind turbines and install solar panels. We no longer see press releases that claim we earn money from selling our surplus power to the likes of Michigan and New York, perhaps because the Auditor General in his 2011 Annual Report stated that “from 2005 to the end of our audit in 2011, Ontario received $1.8 billion less for its electricity exports than what it actually cost electricity ratepayers of Ontario.” When you examine the Independent Electricity System Operator’s data you quickly learn why the Ministry no longer brags about earning revenue from exports or keeping costs down for ratepayers. The exporting of our surplus power was the subject of a joint article over two years ago but the impact at the time was at a lower dollar level.
Looking at data for the first eight months of 2013 and comparing it to the same period in 2012 discloses that while we are exporting more power (an increase of 23% year over year) it is costing Ontario’s ratepayers more. For the first eight months of 2012 we sold Michigan and New York 8.3 million megawatt hours (MWh) or enough to power over 800,000 homes and for the first eight months of 2013 Michigan and New York bought 10.1 million MWh or enough to power over one million Ontario homes. The market value (Hourly Ontario Energy Price) of power sold to NY and Michigan in 2012 indicates approximate revenues of $182 million and $262 million for 2013. On the surface it makes it appear that Ontario earned $80 million more but that sale price doesn’t include what we Ontario ratepayers refer to as the Global Adjustment (GA) which is described by IESO as:
“The Global Adjustment (GA) is the difference between the total payments made to certain contracted or regulated generators/demand management projects, and market revenues.”
The GA is the huge basket that picks up the difference between the guaranteed “contracted” generation and the market price (the amount we sold our power to Michigan and New York for). That basket has been growing at an incredible pace over the past few years as renewable energy (wind and solar) are added to the grid.

What that means is that Ontario’s ratepayers wound up subsidizing those export sales. We estimate that in the first eight months of 2012 Ontario’s ratepayers picked up the GA costs of $420 million and in 2013 the subsidy bill was $584 million or an increase of 39% for the same period. Put another way; for each kilowatt hour (kWh) of exports in 2012, Ontario subsidized GA costs of 5.1 cents per kWh and for the same period in 2013 that subsidy had jumped to 5.8 cents per kWh. At the time of the Auditor General’s report, only 20 months ago, the subsidy was estimated to be 3 to 4 cents per kWh.
Since the Auditor General reported on the cost of exports, we estimate the net exports through New York and Michigan interties* have sold for more than $1.2 billion less than Ontarians paid for the same amount of electricity, which makes the estimated gas plant moves seem cheap as those subsidies will continue to grow. The Ontario Power Authority (OPA) has delivered contracts to the wind and solar developers that will increase their generation capacity by upwards of 60% with most of that cost flowing to the GA basket.
What Ontario exported in the most recent eight month period is equivalent to what might be produced (intermittently when it’s not needed) by 3,700 MW of wind turbines (another 1,700 towers spread throughout Ontario) or 8,000 MW of solar panels (using 64,000 acres of land). The foregoing assumes wind turbines produce at a 29% level of capacity and solar panels at a 15% level.
The interesting and disturbing fact that has emerged since Premier Wynne has become the leader of the Liberal Party is that we have seen an acceleration in the implementation of contracts awarded for wind turbine projects despite the downsizing of the Samsung contract. Under Wynne’s short term as our Premier, Ontario has awarded as many, if not more Renewable Energy Approvals for wind turbine projects as were granted under McGuinty’s term. The reasoning behind this sudden rush to wind has caused consternation throughout the Province as 67** municipalities have declared themselves “unwilling hosts”, which they were invited to do by Premier Wynne in her Throne Speech. While mouthing a desire for conversation with the “unwilling hosts,” Wynne is set to add more than 3000 MW of “transmission connected” wind capacity in the next 18 months, double the amount existing when she became Premier.
The projection of an $8-billion annual Global Adjustment basket in the “Power Dumping” article of two years ago looks set to become a reality near the end of the current year. In the interim, both Michigan and New York are no doubt very happy the Ontario Liberals have created such a mess of the Ontario electricity system and hopefully appreciate the generosity of Ontario’s ratepayers.

Parker Gallant is a retired bank executive and a former director of Energy Probe Research Foundation. Scott Luft is a former retailer with a statistical interest in Ontario electricity data.
As with all independent bloggers on this site, the views of the authors do not necessarily reflect those of Energy Probe.

 * An "intertie" is where the connection point is to export or import electricity between different grids and represents the flow of electricity.  The IESO do a daily report here: http://www.ieso.ca/imoweb/marketdata/intertieSchedule.asp
**Editor's note: 68 communities have declared they are Not a Willing Host as of September 18


Article any source

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

Hydro One, Energy Ministers: getting 'smarter'? You be the judge!

Three bills in three weeks from Hydro One and a new line on the bill: “Miscellaneous Adjustment” got this writer wondering, why?  The first bill came with an insert with the heading “Important Information about your enclosed Hydro One bill” and went on to explain that after they had “changed the meter at your premises, we experienced an issue which prevented the data from your meter from being processed in a timely manner in our system.”   The meter they changed was a “smart meter” Hydro One installed a few years ago, so I assume this is a “smarter” meter.  Calling the number on the insert allowed me to confirm with Hydro One  that the meter change was due to a “communication problem.”

   The upsetting part of the final bill is that when the all-in price of my power is calculated (including the costs of electricity, delivery, regulatory and debt retirement charge) it turned out to be 29 cents a kilowatt hour (kWh) and when I looked at my bill from November 2008 the all in charge was 16.5 cents a kWh.  So in less than five years, the price had risen by 81%.

   We’re doing our best to be responsible power consumers: we consumed less power than before and 71% of the billed electricity was in “off-peak” hours. 

   If one looks back this is what then Premier McGuinty said in his Throne speech of October 12, 2005 about smart meters: “Consumers can look forward to getting smart meters that will help them save money by telling them when they can pay less.”

    An 81-% increase? Sounds like another broken government promise!

   Those who have Hydro One as their local distribution company (LDC) will recall that only a few months ago, they sent another insert about a “new billing system”  which allows them to bill on a “real time” basis.   In effect this was a $160-million grab from ratepayers, perhaps to ensure their profits grow and that they can continue to pay dividends to the Province ($370 million in 2012).  Profitability however, doesn't cover off employee pension and benefit requirements as noted by DBRS, the Canadian bond rating agency, who listed Hydro One as # 8 on their recent list of worst funded pensions in Canada. Perhaps they should be funding their pension fund instead of making big dividend payments to the Ontario Ministry of Finance, but that might force Finance Minister Sousa to make some tough spending decisions.

   My comments on “smart meters” are not new: back in July 2010I pointed out that in a 3,400-page submission by Hydro One for a rate increase, the installed cost per smart meter was $700.54. That was confirmed by an exchange with a Hydro One officer.  Now, the smart meters are having to be replaced? And not for the first time: Hydro One has needed to replace smart meters back in 2010 when the Newmarket Eracarried an article about meter replacement in Keswick, Sutton and Mount Albert. My suspicion is that the form letter in our recent bill wasn't the only one: who else in Prince Edward County and other parts of the province got it?

  So, now,  one wonders about the promises made for those smart meters. At $700.54 cents per meter the cost of replacing the old analog meter at our place is now $1,400.00; the Hydro One 2012 Annual Report indicates they are charging $1.52 per month as a recovery cost.  At that rate, it will take them 76 years to recover their costs. Will Hydro One be spending hundreds of millions each year on “smart meters” instead of upgrading the important infrastructure such as transmission lines, transformers, etc.?

   An interesting story recently came out of Germany: the German Federal Ministry of Economics published a studyby Ernst & Young which basically concluded, no rollout for smart meters.  Why? Ernst & Young did a cost/benefit study and concluded:

“The study comes to the conclusion that smart meters in particular for small consumers are not cost-efficient, as the potential savings would be well below actual costs of smart meters and their operation.”

Cost-benefit analysis and other studies: not necessary for decisions by the Ontario government

   In Ontario we seem to do things differently as was pointed out by the Auditor General in his 2011 report. Jim McCarter said that the initiatives behind the Green Energy and Green Economy Act were not based on a cost-benefit analysis.  While not speaking directly to the issue of “smart meters” and their installation throughout the province this writer believes that the conclusions of a cost-benefit analysis would have reached the same endpoint as the Ernst and Young study completed for Germany.

    When the McGuinty government gave its Throne Speech in 2005, the Ontario Energy Minister (Dwight Duncan) had already issued a directive to the Ontario Energy Board (OEB) dated July 14, 2004to Howard Wetson, Chair, of the OEB (the Ontario Power Authority did not exist at that time) which instructed them to “implement a plan to achieve the government's objectives for the deployment of smart electricity meters.” 

   No cost-benefit study was considered and Minister Duncan's directive to the OEB simply had to be “formalized” before the media picked up on the government’s manipulation of the electricity sector without going through the legislature or a hearing before a legislative committee! With a single signature Duncan committed Ontario's ratepayers to pick up a bill for at least $2 billion!

   Several years after that 2005 Throne Speech and the Dwight Duncan directive, Tyler Hamilton (the “expert” commentator as noted by Alicia Johnston in e-mails recently released by the government and commented on by Tom Adams) wrote an article for the October 7, 2010 Toronto Star.  The article was all about “smart meters” and the wonders they would perform for all of the ratepayers in Ontario.  It contained quotes from an IBM “technology consultant” including this one:  “ ‘Right now, Ontario is a world leader in the smart grid and smart meter systems,’ he explained. ‘Dozens of utilities around the world are watching what’s going on here. In a way, we have become a micro lab for the rest of the world.’ ” 

    Later on in the article Hamilton makes this comment:  “With smart meters…we have a tool that helps us to at least manage our electricity bill and help offset electricity rate increases.”

   Did Tyler Hamilton, the “expert” commentator, really understand what he was endorsing? I believe most ratepayers in the province have received absolutely no benefit from either “smart meters” or the “smart grid” –neither one has done nothing to improve the aging infrastructure in the Province or “help offset electricity rate increases.” 

   Germany, whom we copied on the FIT and MicroFIT programs apparently didn't see it with the clarity of Tyler Hamilton or that IBM technology consultant. 

   Mr. McGuinty is now at Harvard and presumably living in Massachusetts where the average cost of power is about half of what I am being charged. I wonder if he and former Minister Duncan now appreciate the “green” mess they created. 

   Worse, power utilities around the world must now be laughing up their sleeve at the wasted money Ontario's ratepayers are forced to absorb.  The “microlab” referenced by the IBM technology consultant has turned out instead to be an incinerator for our hard earned dollars!

Parker Gallant,

September 7, 2013

Next time, we will look at the “smart grid”

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

Article any source