Building Blackouts

Ice is the alleged culprit that forced many of Toronto's buildings into darkness over the past week; water the alleged culprit for the blackouts this summer.  Both ice and water served as triggers, but the systemic weakness that allowed for extended outages was created over many years, by fashionable politics cancelling intelligent policy, and the acquiescence of a deliberately weak regulator in allowing poor government initiatives to take precedence over providing value to consumers.

You never want a serious crisis to go to waste...
Things that we had postponed for too long, that were long-term, are now immediate and must be dealt with.   - Rahm Emanuel

There's no shortage of lobbyists looking to take advantage of this crisis, but perhaps the best outcome would be to find the body/bodies most responsible for the fragility of the current system, and address the deficiencies there.

Toronto Hydro seems an obvious target, and I assume their staunchest critics will evaluate their performance/responsibility - as they should.
I submit the problems go far beyond the local distributor, and that the regulator bears an enormous responsibility for taking away from the Christmas of many Torontonians.

Toronto Hydro, which took far longer than it's first 72 hour estimate at getting many households powered again, has been seeking rate increases from the Ontario Energy Board (OEB) for years:

Toronto Hydro will be asking the Ontario Energy Board to reconsider a request to increase hydro rates, which was turned down earlier this month...
Toronto Hydro wanted to present its case for raising monthly hydro rates by an average of $5 a household to pay for infrastructure improvements totalling $1.5-billion over the next three years.
...upgrades are necessary to bring Toronto's grid up to modern standards.  -Jan 2012

The OEB has been prepared to hit Ontario's consumers with any idiotic initiative from Queen's Park, but loathe to allow rate hikes requested from the bodies that generate (OPG) and deliver electricity.

The rate request from Toronto Hydro was turned down, which prompted a news release from the company:

... the OEB has cut the capital budget by approximately 65 per cent. This has far reaching ramifications that will impact not only customer service, safety and reliability, but employees within the utility and other industries and suppliers.
...will result in the reduction of its capital spending to a level that will not enable the company to adequately maintain and renew Toronto's aging distribution system. This will likely result in deteriorating service, an increase in power outages, an increased risk to public safety, slower call centre response times...

The OEB has displayed a concern for employee costs it has not displayed in other costs areas - and to understand the weakness of a regulator that could submit the province's capital, and main economic hub, to poor electricity service, a trip back to the days of professional electricity sector planning is necessary.

The Ontario Power Authority (OPA) was created, in 2005, to develop strategies for Ontario's electricity sector, and the heart of their mandate was the development of an Integrated Power System Plan (IPSP).  The star attraction of system planning in Ontario has long been generation - from hydro, to nuclear, to the Green Energy Act - but the IPSP also dealt with transmission issues.

"Downtown Toronto is City J and is in the high load category"

From 2007's IPSP (with emphasis added):

Hydro One submitted to the OPA a benchmark study of major North American cities, conducted by Utility System Efficiencies Inc. that compares Downtown Toronto with the downtown transmission grids in those cities.  The study shows that other major cities recognize the need for redundancy and incorporate designs which reduce the risk of  prolonged interruptions for the loss of a major supply point.
...other major cities recognize the importance of providing sufficient supply points in downtown areas to mitigate high impact events especially in older systems. The study notes:

There are operating concerns and other factors to consider, as well, when determining what is adequate to serve the load. There has been a growing trend of partial or total blackouts in major cities in North America due in part to aging infrastructure, unavailability of equipment and operating equipment at higher ratings due to continued load growth without corresponding growth in the supply facilities. It is also necessary to consider the flexibility of the transmission and distribution system to allow outages for the refurbishment of aging facilities. These issues, together with the direct and indirect impact of outages, need to be considered when making plans for capital investment. 

The IPSP project was never followed through on.  The first IPSP was just getting to the Ontario Energy Board for vetting when the Green Energy Act killed it.  A subsequent IPSP, in 2011, was buried, before an election, and has yet to resurface.

Late in 2012, Hurricane Sandy would bring down sections of the grid in the United States for long periods of time.  One outcome of the storm is that it brought to the fore a simmering discussion about the merits of a strong grid, in relation to the smart grid catch phrase that an easily enchanted Ontario's distribution companies, enabled by witless policians and a weak regulator, have spent so heavily on (to falsely inflate equity in distribution companies enabling/entitling them to collect higher rates).  

The Obama administration recently changed its nomenclature on a topic of much interest to readers of this publication and those in the power industry. The administration has said it prefers to talk about its policies advancing a “resilient grid” as opposed to its previous emphasis on developing a “smart grid.” The new policy thrust, for whatever it’s worth, is “grid hardening.”     - POWER magazine

Had the OEB been as interested in getting value for the dollar on meter spending as it is in pension plan costs, Ontario may have already looked at emphasizing resiliency and strength, instead of running contests for an app to control fridge temperature with a "smart" meter.

The enemies of intelligent planning are many - and, in the Toronto area, one incentive to mindlessly oppose everything is electability.  Peter Tabuns, currently the energy critic for the NDP, rode to election opposing construction of the Portland Energy Centre (built on an existing generating site).

Liberal Members of Provincial Parliament have opposed their own local gas plant projects - the biggest punishment for doing so being hung on Mississauga South Charles Sousa, who was sentenced to serve as Premier Wynne's Finance Minister.

Opposition to more secure transmission lines is at a level beyond mere party politics.  A core alliance of nominally environmental groups, and natural gas lobbyists, opposes everything which could be interpreted as facilitating the delivery of electricity from nuclear generating stations to the urban areas populated with those so intolerable of local generatiion.

There is no shortage of entities to blame for Toronto's fragile grid: the government; the regulator; the green/gas alliance, and the residents.

A very positive step towards a better electricity system would be rewriting the Ontario Energy Board Act to remove the fashionable nonsense naming guiding responsibilities as 'conservation and demand management", "implementation of a smart grid" and the direction "To promote the use and generation of electricity from renewable energy sources..."  

The OEB can be responsible to electricity generators and consumers, or to the government.  It is not likely they can do both.  

The system operator (IESO) forecasts 2557MW of industrial wind turbine capacity will be added to its grid within 18 months, along with 280MW of solar - the same document implies another 800MW of solar capacity will be embedded with local distribution companies.  While Ontario is not expected to need any addtional capacity until 2018 (even of the reliable type), this is set to add ~$1.55 billion a year to bills in Ontario.

The cost of hardening Ontario's capital's grid (wherever that ends up being) is not as significant as the money being wasted.

There has been no economic testing of government directed stupidity - and the foolish spending is now taking it's value toll, both in higher consumers bills and lower quality of service.

Suggestion on restructuring the mandate of the OEB should be included in a new Integrated Power System Plan - which every responsible MPP should be clamouring for following the political document which appeared in December, masquerading as a long term energy plan.

Electricity Sector Lessons from a cold week in Ontario

I've just run the numbers to update my weekly reporting page for the week starting Wednesday, December 11th (to match the IESO's weekly reporting).
It was a cold week which lead to demand being up over the comparable week in 2012 by 13.4% - which is the highest growth in years.
Weekly Ontario demand of 3,162,967 megawatt-hours is the highest demand this year.

Here's some lessons reinforced this week:

1. Wind has little capacity value
even in winter.  Wind had a very productive week, but on two of the seven days, including the highest winter peak, it was producing at under 10% of capacity.

2.  Ontario burns fossil fuels to generate electricity for export.

This is likely not intentional, but simply indicative that trade exists, and Ontario's natural gas generators are used to meet demand elsewhere.

I believe the projections in the long-term energy plan continue a trend of underestimating fossil fuel use by ignoring the export implications of current contract structures (net revenue requirements), and market operations.

3.  Ontario is again not showing some exports.
Not long after I wrote Secret Deals between Public Power in Ontario and Quebec 2 years ago, the activity described there (feeding Saunders output directly into Quebec's high-voltage direct current, or HDVC, grid) hasn't seemed to occur as often.  After the first 8 hours of this particularly week, the redirection was constant, averaging about 300MW each hour. [1]

A note on net exports to New York and Quebec to end.
Our export partners may not be importing to meet domestic consumption.  Last week the price driver in the region was the New England's market; if you look at Ontario's trade with Quebec we become exporters during price spikes.  The first spike in this graph accompanied prices over $300 in the ISO-NE market.

The ISO-NE received most of it's imported power from the NY-ISO and Quebec.

We would be wrong to assume exports to Quebec indicates Quebec requires to import electricity - it's likely far closer to the truth to say when they can buy at $40/MWh and sell at $150, they do.

Hopefully OPG received more than $40/MWh for switching over a portion of Sauders' production.



Endnote

[1]  Many grey areas here, so it's not possible to give definitive figures.
My belief is that, in the IESO's Intertie Schedule and Flow Report, exports through PQ.B5D.B31L represent Saunders feeding into HQ's grid, and exports through PQ.Q4C represent the same situation at Chats Falls - however, Chats Falls is half owned by HQ (as I understand it).
The point is these exports do not show in the IESO's reported exports in their "Hourly Import Export Schedules" text files (market data files) or the daily, weekly and monthly summary reporting based on those text files, nor do they show as production (at Saunders or Chat Falls) - the existence of the Ontario production fed onto QC's grid only appear in the Intertie reporting.

November's Record electricity Rates: the Global Adjustment/Ontario Roulette story

Sources inform us Ontario's common ratepayers will pay more for November's electricity than they have paid in any month previously.
That may be true for some but it's probably not true for all.

The Toronto Star's John Spears courageously tackles the "murky fee" that is the global adjustment (GA), but that charge is primarily the difference between the cost of supply, almost all of which is contracted, and the share of those costs recovered by sales at the Hourly Ontario Energy Price (HOEP).  The primary reason for record rates are the contracts - not the GA; the "actual" GA for November is higher than it's ever been largely because the weighted HOEP average for the month is the 2nd lowest it's ever been.

The Independent Electricity System Operator (IESO) reported November's final "global adjustment" figures at a record $847 million dollars, resulting in a record "actual rate" of $78.55 (class B).  Combined with a weighted average Hourly Ontario Energy Price (HOEP) of $16.08 (the 2nd lowest ever), the wholesale market commodity charge will be reported as a record $94.63.

My estimated composition of November costs (view as webpage)

My estimate of the global adjustment did indicate a record, but not as high an amount as the IESO now reports as "actual."  That's not surprising as there are a lot of murky areas in estimating the total value of the electricity sector supply, and the total demand to allocate it to. [1]

A quick overview of the estimates in the table:

1. Estimated generation, market value and contract cost 
2. Estimated embedded generation (contracted, but not directly on the IESO grid)
3. Estimated curtailment levels 
4. Estimated Global adjustment as difference between supply costs and supply value at HOEP
5. Balance the estimate to much higher ($72 million) actual global adjustment reported by the IESO
6. Reduce demand by estimated line loss
7. Remove exports from total consumption and market value (valued at HOEP)
8. Estimate cost to class B customers of lower Class A charges

Confusing, and with a lot of assumptions, but far better than no estimate at all.

The price hit a record in November by a little bit - and that was determined by record production from Ontario's industrial wind turbines and strong output from nuclear generators which, during the first 2/3rds of the month, meant very low pricing (~$10/MWh - the month's 111 hours of negatively pricing hours is the 2nd highest monthly total since market inception); the end result being that an average cost per megawatt-hour of $81.52 gets bloated by ~$10 to cover the export sales that collected only ~$13.64/MWh.

There's a lot covered there, but it's all been covered on this blog before; we know the global adjustment mechanisms alters the distribution of costs across market participant groups.

We know the "Class A" global adjustment scheme was created to do exactly that.

Operationally it appears the global adjustment may be applied in a manner that distributes costs inequitably based on billing cycle dates.

In the estimates above, adjusting to the IESO's Actual $847 million global adjustment is a larger difference than I've experienced most months [2], and I suspect that is because October's $634.3 million "Actual" global adjustment was lower than it should have been.
The premise that there is a "true up" between months is interesting in terms of the premise behind the global adjustment; that the full cost of power be paid by the customers that consume it.

The idea that charges can be incurred in one period and allocated in another probably might not be unsettling, but how about the related idea that charges for electricity consumed at the same time will be priced differently between customers of the same class, based on their billing date?

This from the IESO site:

What is the monthly rate for Global Adjustment?
There are three rates, each available at different times of the month. Each is set to recover the total monthly costs of the global adjustment. Depending on when in the month you are billed, your LDC may use any one of the three rates. The 1st estimate is posted by the first business day of the billing month, the 2nd estimate is posted by the final business day of the billing month and the actual global adjustment is posted on the tenth business day after month end. Monthly estimated rate information for 2011 and 2012 is available here.

I interpret this as telling me that the November global adjusment charges, paid by similar customers, can be:

• $62.28 for the initial portion of the month (for any billing period that doesn't match a calendar month)
• $84.89 for the November section of a billing period ending in December prior to the tenth business day (or for a billing period that does match the calendar month)
• $78.55 for the latter portion of November for billing periods after the 10th business day of December

The global adjustment rate for December is currently set (1st estimate) at $76.07/MWh.

I see absolutely zero possibility that the "actual" rate will end that high.

None.

This seems like a lottery system for collecting electricity payments.

Table from IESO website

As with all costs contained within the mysterious bubble that is the global adjustment, there's no transparency on how costs are reconciled.   True-ups surely occur, and there's some evidence that is done by moving costs between months with the 1st and 2nd estimates:

• in June the 2nd estimate was $15/MWh more than the first, so ...
• in July the 1st estimate was set high, and the 2nd estimate was $28/MWh lower, so ...
• in August the 1st estimate was set low, and the 2nd estimate was ~$29/MWh higher, so ...
• in September the 1st estimate was set high, and the 2nd estimate was ~$24/MWh lower

It appears that because of the billing cycles the "true-up" is in the 1st estimate of the next month.

Currently, a customer who escaped November's record rates by getting the benefit of the $62.28 rate for most of the month will be looking at a December Global Adjustment rate of $78.55 - even though that's not a sane estimate for what would actually be reflective of costs incurred in December.

The Global Adjustment mechanism is the subject of a stakeholder initiative at the IESO.

The first question in reviewing changes to any mechanism might be "evolution or revolution?"

Revolution.




ENDNOTES

[1] The IESO reports on supply from generators on the IESO grid; most, over 10MW capacity, show on the "Generators and Output Capability Report", and the total, including the small generators omitted from that report,are included in the figure the IESO reports as "Ontario Demand" - because the IESO does not report actual demand, but the total of all generation on it's grid.  On the pictured spreadsheet, the difference between "Ontario demand" and the sum of generation on the Generators report is indicated as "self-scheduling"
One challenge is the generation contracted but embedded with generators and not on the IESO's grid.  That generation currently includes all solar generation in the province (and I've estimated 10% more wind capacity than reported by the IESO).  There's likely a number of older generators in that category too.  

Regardless, we don't have a good grasp of either what supply actually is, or what demand actually is. 

[2]  The estimates included here build on the foundation of the work I do reporting "supply costs" which appears on this page (and I update twice a month).  New to the analysis on this page is reducing the consumption/denominator by 3.2% (as a line loss adjustment).  

YTD, my estimates are $482 million shy of the IESO's actuals; of that I believe $225 million is charging for the costs involved with relocating the Oakville Generating Station away from Oakville.

The remaining variance works out to 3.6% - while I can't explain it (or there'd be no variance!), it seems to me likely due to embedded generation.  

Without the Ontario Power Authority providing details on their payments to embedded generators, it's not possible to get particularly accurate either on the cost of supply components, or the actual metered demand to distribute those costs across.

Big Thunder is a Big Mistake, and it's not the only one

There were a number of items that caught my attention on the industrial wind turbine front this week, including two articles in the province's largest newspapers (by circulation):

• Ontario is tilting at the wrong windmills is a strong editorial from the Globe and Mail; "...cost is climbing, as expensive wind and solar power is brought into the system, as demanded by Ontario’s Green Energy Plan..."

• Ontario tilts against wind turbines as costs spiral, by the Star's Martin Regg Cohn, showed signs of intellectual, if not emotional, life; "While the NIMBYists beat their breasts, the bean counters took their eyes off the turbines. Politics trumped economics."

The item that inspired me to write is the 18-month outlook released by the system operator (IESO) on Friday.  I've written on the final paragraphs of previous IESO outlooks; this one ends:

In the first 30 days after wind became dispatchable, about 1% of the wind energy that could have been generated was curtailed due to global SBG concerns while 6% of total wind energy available was curtailed due to local SBG concerns. The majority of local SBG concerns were in the northeast and northwest where transmission constraints are more frequent. Wind dispatch in these areas prevented water spillage which was a primary alternative solution to mitigate

There are only two wind generators on the northeast and northwest regions: Prince Farm is just outside of Sault Ste. Marie (which is in the northeast zone), and Greenwich is north of Lake Superior, in the northwest zone.

With a trip to my database to pull my estimates on Curtailment of electricity supply in Ontario, I found that between wind becoming dispatchable and home heating season kicking in, there was one site far more likely to be curtailed than all others - and it's the northwestern Greenwich site.

Over the period noted in the graph the estimate is that 35% of Greenwich's potential generation was curtailed.



Prince Farm is near the top too, but the second place, over near Kincardine and Huron's shore,  deserves a quick mention.  Underwood was the subject of Vampire Turbines in July where I demonstrated it was likely drawing power off the grid over 25% of all July hours.  It's a particularly lousy site in terms of production that's capable of meeting Ontario's demand, but it's right on a very major transmission line.  If this site is ever constrained it's a big problem in terms of additional, planned and contracted, growth for the area.
One of Samsung's few projects, Armow, is set to be plunked right by the Underwood site, where it will join a number of other Ontario industrial wind projects in threatening a municipal airport.

In Thunder Bay the Big Thunder wind park has always had some strong local opposition, and recently Fort William First Nation Chief Georjann Morriseau has been aggressively questioning the project; a project few want, and none need.
The northwest zone did have 2 coal generating stations, but it's been years since they ran much at all.  Nonetheless it was felt, in Toronto, that not running on coal was bad, so they are being converted not to run on biomass. The reality is that wind turbines built in the constrained northwest will have, essentially, no coal or gas-fired generation to displace.

---

Shortly after the current Premier acquired the position, by being selected leader of her party, wind generators dropped an appeal on curtailment policies they were preparing to take to the Ontario Energy Board (who should have refused to hear it!), because an agreement was reached with the new government.  Prior to Wynne's reign, and subsequent gift of payment for potential supply the grid cannot accommodate, the industry was speculating about a great deal of attrition in the remaining ~3,750MW of contracted capacity - meaning much of that contracted capacity was unlikely to get built.

The estimated cost of the curtailments graphed above is $8.3 million (66731 MWh at $125/MWh). Curtailments should be rare until the spring season, and then they are likely to soar much higher than the totals from this fall; as suppliers now are assured of payment for unnecessary suppply, total industrial wind capacity is expected to more than double in the next 18 months.  In near future, curtailment costs are likely to balloon.

The northeast region may soon follow the northwest in achieving high curtailment levels.  The Lake Superior Action-Research-Conservation (LSARC) has an appeal of the Goulais project beginning next week, and another Algoma region project is proposed for some of the country's most iconic landscapes.

Resistance to projects, and all appeals, are being fought largely by what the Star's Regg Cohn refers to as NIMBYs.  The term was once an acronym for Not In My Back Yard - although that doesn't seem to be how the Star's Queen's Park columnist uses it in implying people beating their chests off in the wilds of southwestern, eastern, and northern Ontario prevented the accountants of the lesser Toronto Area from counting.

The counting was going fine.  Bean counters are very active in the opposition, and, working with reality, have managed to prevent the government from being so stupid as to contract more industrial wind generation since 1,018 MW of proposals were offered contracts on July 4th, 2011.  The rate of growth in construction of contracted projects has also been slowed considerably by these NIMBYs.
Now that even the government acknowledge a need to curtail growing supply, the NIMBYs, along with their bean counter and realists allies, have been vindicated.

Accounting for the cost of dumping excess supply, and the cost of curtailing supply, and the cost of spilling water in order to purchase more expensive supply, is not a task that allows for precision, but it's known the entire province has benefitted by the actions of anti-wind NIBMYs, and their allies. Prior to the explosive rate hikes of 2013's late spring and summer (likely driven by solar projects that weren't opposed by NIMBYs), rate escalation, and built wind capacity on the grid, were both tracking below expectations.

But the NIMBYs did not benefit from their fights any more than other Ontarians; they have lost all fights for their own back yards, except for one, and that one is being appealed by the project proponent and their Torontonian Premier.

If it is now fashionable to agree with the arguments of the NIMBYs and their allies, it should also be time to respect them/us.

The troubling in Auditor's Report on OPG

The Auditor General of Ontario released an annual report and, as a result, it's open season on publicly owned Ontario Power Generation.  Much of the criticism is misplaced, and what criticism is well-placed is illogically morphing into recreating the worst decisions made about Ontario's electricity sector in the 1990's.

As I write this I'm hearing CBC Metro Morning's Matt Galloway repeatedly cite OPG as being responsible for increasing rates. It's a ridiculous implication. In 2013, the total cost of all electricity generation in Ontario will be $1-1.25 billion over what was paid in 2012.  Very little of that increase could be attributed to OPG.

Some of the report's implied criticisms are not only applicable to OPG.

The number of OPG staff on the Sunshine List has grown steadily since the organization was
created in 1999, albeit at a slower pace after the 2010 pay freeze legislation. Over the last 10 years, Ontario Power Generation Human Resources the number has doubled, from 3,980 employees in 2003 to 7,960 in 2012, representing about 62% of the employees on OPG’s payroll; the corresponding increases in total salaries and taxable benefits paid to those on the list were $513 million for 2003 and $1.11 billion for 2012.

Big numbers to be sure, but in percentage terms far beneath the growth in the numbers at the Office of the Auditor General of Ontario, which has more than tripled both the number of people it has on the Sunshine list and their total salaries and benefits - and those people just get your blood to boil, whereas OPG's people get your kettle to boil.


Big numbers look bad to little people, but the $1.7 billion in labour costs noted by the auditor translates into approximately 2 cents/kWh on the power OPG sold; OPG claims their average revenue of 5.1 cents/kWh in 2012 was 3.5 cents below the "Average revenue for all electricity generators, excluding OPG." [page 13 of 2012 annual report].  Take Bruce Power (nuclear) out of the calculation and OPG's rates are well under half the average rate paid to private producers in the province.  [OPG 3rd quarter YTD states 5.7 cents/kWh; my estimates for 2013 are 6.1 for Bruce, and 13 cents/kWh for others]

The auditor's report doesn't provide many performance metrics along those lines, and some numbers they feel are relevant are not as pertinent as they appear.

...the amount of power that OPG produces has decreased by 23% over the last decade (from 109 terawatt hours in 2003 to 84 terawatt hours in 2012), with the reduction in demand for electricity, closure of coal plants and more private-sector involvement in new power generation.

This is true, but OPG was not allowed to shutter it's uneconomical plants: first Lennox (in 2005) was provided an agreement to keep it's 2000+ MW capacity available to the system, and once the recession gutted demand (2009), it's coal units were also paid to remain available.  There were reductions in staff, and they were not proportionate to the reduction in generation because they should not have been.

The statement, from the report, the less sharp members of the mainstream media are interpreting as stating OPG is significantly responsible for recent rate hikes is:

Given that OPG still generates about 60% of Ontario’s electricity, its operating costs have a significant impact on the cost of electricity, as well as on OPG’s profitability, which in turn affects how quickly the legacy debt of the former Ontario Hydro can be paid off.

This implies there is an intention to pay off the debt.  The Office of the Auditor General should know this to be false - as they've been the auditor of the Ontario Electricity Financial Corporation, which is responsible for electricity sector debt.  The OEFC's Annual Report for 2011-2012 was over a year late in being made publicly available, and the 2012-2013 Report is now several months late too.  One can see why they don't acknowledge their role in that; what they do provide, in the 2013 Annual Report is a follow-up to their 2011 Annual Report's section on the "Stranded Debt".  [if you aren't aware of what this refers to you should read "Stranded Debt - Abandoned Responsibility"]

Graphic from Fall Economic Statement

While the Auditor's 2011 report liberally lifted content from my writings on the stranded debt (here and then here), the follow-up does not - it doesn't even report on the latest accounting of the debt (which appeared in the Ontario government's Fall Economic Outlook and Fiscal Review).

A very quick review: the debt retirement charge was meant to pay off a portion of the "unfunded liability" set at the creation of the OEFC.  One might assume that as the unfunded liability reduced there would be some proportional reduction in the "residual stranded debt", which your debt retirement charges were allegedly intended to service.

• In 2008-09 the unfunded liability was reduced by $1 billion, the residual stranded debt by $0.2 billion
• In 2009-10 the unfunded liability was reduced by $1.4 billion, the residual stranded debt rose $0.4 billion
• In 2010-11 the unfunded liability was reduced by $1.4 billion, the residual stranded debt was unchanged
• In 2011-12 the unfunded liability was reduced by $1.1 billion, the residual stranded debt by $1.3 billion
• In 2012-13 the unfunded liability was reduced by $1 billion, the residual stranded debt by $0.6 billion

So, pretty clearly, they just make this shit up.

Furthermore, the Liberal government introduced an Ontario Clean Energy Benefit that drains as much from taxpayers as the Debt Retirement Charge collects from ratepayers.

There is no explanations for the debt retirement charge aside from it can be blamed on the past Progressive Conservative government that introduced it, and/or and stupidly labelled a nuclear debt retirement charge.

Stupidly because the residual stranded debt is now said to be $3.9 billion, far less than the $4.4 billion it shows as being inflated in the 2003-04 OEFC year.  The explanation for that hike relates to how successive governments have viewed Ontario Power Generation:

... the estimated residual stranded debt increased to a peak of $11.9 billion, due to the electricity price freeze and a reduction in the estimated present value of future dedicated revenues to OEFC, mainly reflecting the revised lower projected financial performance of Ontario Power Generation (OPG) and lower tax rates.

Profits in recent years have come primarily from Hydro One (the public transmission and distribution entity).  Parker Gallant (who pointed out the news release containing the preceding quote) has written on how excessive pensions in Ontario's public sector energy companies are being capitalized to elevate equity.  This may have inspired the Office of the Auditor to review OPG's pensions - but I don't think they caught the full game being played (an audit of Hydro One might put more light on it).

OPG has been disliked by governments since before it existed.  Bill Davis ordered many new builds for the 1980's which, partially due to lower growth in demand than expected, the Peterson governments delayed, causing capital costs to escalate and escalate.  Bob Rae was in power when Darlington was completed, but brought in Maurice Strong to knee-cap Ontario Hydro;  Harris then dismantled it, creating 5 successor entities (including OPG, Hydro One, and the OEFC).  Harris' successor, Eves, ordered a rate freeze and paid for it by clawing back the receipts of market-value sales from OPG and then the McGuinty/Duncan tandem permanently hindered OPG by locking down their rates through regulation with the deliberate intent of masking higher prices to be paid to private suppliers.

The Wynne government of 2012 is sounding almost exactly like the Rae government two decades earlier - which launched cost cutting at OPG that was shortly followed by declining nuclear performance and skyrocketing emissions.

The auditor should not be surprised to find a culture at OPG which doesn't respect the fickle wills of governments.   

The silo has been built over a very long time.

Perhaps that's not a bad thing.

After 25 years of governments that would prefer to see it fail, OPG currently delivers value superior to other generators in the province.

Premier Deception on Oakville Gas Plant Cancellation Costs

I don't write much on the gas plant relocations - my intention having written my thoughts was to move on.

This post isn't about the gas plant issue; it's about a politician communicating only to mislead - which I increasingly think is the purpose of most of Premier Wynne's "conversations."


I read a tweet yesterday from the incurious Globe and Mail Queen's Park Reporter, Adrian Morrow, which reported Ontario's Premier as saying "There is no way to know those costs."

One implication being there were actual costs to know, and a second being they weren't knowable.
Both are mostly false.

• On September 29th, 2009, the OPA announced, "it will sign a contract with TransCanada Corporation ..."
• On October 7, 2010, the government announced the Oakville Power Plant would not be moving forward ...
• On September 24th, 2012, the Minister of Energy announced an agreement/settlement

The Premier is now misleading people on what was knowable between October 2010 and September 2012.

Tom Adams' Gas Busters work tells us what was knowable was the cost the government was willing to pay, and that the costs were hugely inflated to avoid the embarrassment of writing a cheque and the bigger political problem of allowing the settlement to be determined in court.

The documents show the government summarizing a CTV report on the Oct. 7,2010, cancellation this way:

"McGuinty said he's not aware of the specifics of the contract with TransCanada Corp., which won the bid last year to build the $1.2-billion plant, and can't say how much the government will have to shell out to break the deal." (pg. 181of .pdf)

6 weeks later, on Nov. 24, 2010, Ben Chin makes the following suggestions for a presentation ("even though there's no handouts"):

Negotiated solutions does not exceed $1.2 billion-no cheque issued to TCE    (pg. 412 of .pdf)

So the original negotiating position was the full cost of building the plant, with the stipulation that there was no cheque (ie. no accounting for that value being the settlement).

The Ontario Power Authority (OPA) then appears to be looking for intelligent alternatives (where bids could be fixed to get TCE the contract, but ... intelligent alternatives).
In April, the OPA's Michael Killeavy (LL.B., MBA, P.Eng. ; Director, Contract Management), writes on the costs of different options in settlement negotiations:

What might not be obvious to those not involved directly in the discussions is that acceptance of TCE's original proposal to settle is the worst possible outcome for the ratepayer. It appears that our second counter-proposal is the next worst outcome for the ratepayer. This slide might help the Board and other decision-makers in their deliberations with regard to their decision on sending TCE the second counter-proposal

Graphic from page 287 of this .pdf - text from page 286 [1]

When the Premier says "There was no way to know these costs" she makes like there was a hint of honesty in her predecessor's "The total cost of the relocation is $40 million." (source)

That is nonsense.

Worse, the $40 million is the "sunk costs" - the rest is damages/profits/hush money ... whatever one wishes to refer to the amounts in addition to sunk costs as, the amount was roughly known from nearly day one.

When negotiations bogged down in April 2011(which I'd attribute to the Ontario Power Authority's stubborn attempts to try and recover some value for Ontario's ratepayers), a memo went out from Halyna N. Perun, A/Director, Legal Services Branch, Ministries of Energy & Infrastructure:

We can expect that both the OPA and the government will be named in any action.
We also understand that TransCanada's plan is to "name names". Political staff were involved in initial discussions with TransCanada about the decision not to proceed with the plant.
We will need litigation support...  (pg. 175 of .pdf)

One outcome of that threat was that by the summer of 2011, the OPA was pushed out of the settlement process; OPA Chairman Jim Hinds wrote Infrastructure Ontario [IO] "took over negotiations, they changed the envelope to Lennox..."

That cleared the way for an entirely political solution.

_____

The newly released, heavily politicized, "Long Term Energy Plan" contains sparse references to the OPA - the body responsible for planning in Ontario.

The $1+ billion political resolution moving the Oakville Generating Station out of Oakville will pale in comparison to the damage being done by this Premier ... and her Chiapetti.

___

Page 13 of .pdf

ENDNOTES

[1] There's much discussion earlier in that .pdf file on Net Revenue Requirement (NRR's), with the dollar value of the settlement obviously being hidden in the NRR.  The final agreement seems to contain an NRR closer to the OPA's negotiating position, but the gas contracts and initial exchange of money (related mainly to the turbines) may push the value up to TCE's, and the government's, ~$1.2 billion value.

2013 LTEP Plan: First Impressions

RATE INCREASES SINCE LTEP 2010

The theme of lower than expected rate increases comes up, and the press repeats claims recent rate increases have been below expectations.

That doesn't appear to be true.

"Since the 2010 LTEP, electricity prices have not increased as much as they were forecast to at that time."

This was true at the start of the LTEP 2013 process, but it looks false to me now after growth in the commodity rate soared since last winter.

The 2010 LTEP stated:

Over the next five years... residential electricity prices are expected to rise by about 7.9 per cent annually (or 46 per cent over five years). 

In October 2010 the year-to-date commodity charge (weighted) was 64.55/MWh, and total market charges were $85.22.
In October 2013 the figures were $85.228/MWh (up 33%) and $107.28 (up 26%).
In November 2010 the average rate for regulated price plans was ~6.9 cents/kWh; 3 years later it's up 29% to 8.9 cents/kWh

Rates are up in line with LTEP 2010's projections.
Reporting on LTEP 2013 notes "Ontario homeowners face a 33 per cent hike in electricity rates over the next three years..." and the same reports say that's less than expected in LTEP 2010 - with its 7.9% a year.

It looks to me that the rate hikes are proceeding as expected.
---

The 2013 "Long Term Energy Plan" (LTEP) seems to be, at first glance, a pretty tame, and possibly irrelevant, document.
Perhaps I have a strange perspective, but before I started reading I jotted down a couple of things I'd look for:

1. Any thoughts on getting Ontario's electricity market to function.
2. Thoughts on lobbying adjacent jurisdictions for emissions credits/trading
3. An evaluation based on an estimated social cost of carbon
4. A power perspective that championed the electrification of processes currently dominated by fossil fuels (including transportation and home heating).
5. Capacity valuation and a path to establishing regional capacity markets

I saw none of these things.

Here are some things that I read that concerned me:

There is no recognition that Ontario's electricity market, as dysfunctional as its been, has been right about supply for a decade.  Prices are high in Ontario because nobody would build here without incentives; supply is excessive because incentives were high to get people to build here (unnecessarily)

There is no recognition of the enormous cost of the Beck tunnel relative to the benefit (which has thus far been invisible); OPG is seeking an enormous rate hike now that it can start to recoup spending on that project.
Simlarly, the justification for the Lower Mattagami project still eludes me as there's still no indication of what increased production will be - and without that no levelized unit cost esitmate is possible.  This is concerning - particularly so as it's being held up as an example of a model project partnering with First Nations communities.

I thought sanity was at work as I read there was no "need for new major transmission projects beyond those already in progress."  Then I read on and found "Ontario has initiated planning that could lead to about $2 billion in transmission investments in the northwest over the long term."  
I had noted it would be difficult to curtail Hydro One's capital spending,, and it looks like they've zeroed in on an area to spend it.

Unsurprisingly there was no mention of how little the coal capacity at Thunder Bay and Atikokan operated in recent years - but much on coversions of both to biomass and transmission galore.

I think that probably makes this a good time to insert some sanity into the discussion of the Lower Mattagami project; expensive infrastructure is an investment if it stimulates growth - not if it stimulates votes, and especially not if it simply inflates the book value of Hydro One's, or Ontario Power Genertation's, equity so they can raise rates proportionately from their existing customer base (based on delivering value with the existing infrastructure).

Thus the concern about ignoring markets both in analysing the recent past, and in planning capacity for the future.

___

Comments posted earlier:


DEMAND IS NOT UNEXPECTEDLY DOWN
There's a bureaucracy industry claiming demand is unexpectedly down, and it's a key them in the selling of LTEP 2013.

Graph from Stranded Debt/Abandoned Responsibility

It is unexpectedly down to me - I wrote on LTEP 2010, "This should be relatively straightforward as there is a long trend (60 years) of a slowing in the increase in demand which has transitioned to a decline in Ontario..."

Demand has held right around the same level since that time.

Prior to 2010 Ontario had been improving efficiency for decades.



RATE INCREASES SINCE LTEP 2010

The theme of lower than expected rate increases comes up - as expected:

"Since the 2010 LTEP, electricity prices have not increased as much as they were forecast to at that time."

This was true at the start of the LTEP 2013 process, but it looks false to me now after growth in the commodity rate soared since last winter.

The 2010 LTEP stated:

Over the next five years... residential electricity prices are expected to rise by about 7.9 per cent annually (or 46 per cent over five years). 

In October 2010 the year-to-date commodity charge (weighted) was 64.55/MWh, and total market charges were $85.22.
In October 2013 the figures were $85.228/MWh (up 33%) and $107.28 (up 26%).
In November 2010 the average rate for regulate price plans was ~6.9 cents/kWh; 3 years later it's up 29% to 8.9 cents/kWh

Rates are up in line with LTEP 2010's projections.

Energy literacy as a primer for an energy plan

Last week, in the lead-up to the release of a "Long-Term Energy Plan" (LTEP), the government of Ontario posted a new page to the Ministry of Energy's website: emPOWER Me.   

The page is mainly short video clips, and most are harmless enough.

A look at some of the issues "emPOWER Me" misleads people about (as a prelude to a look at the new LTEP)

The Value of Conservation is a fine sounding, but very misleading video."




The Problemic Statements Here

"...if you use less electricity you save money on your bill" 
Most costs are fixed in Ontario.  In fact, if we take away all the nuclear (which has the same operating and financing costs whether the generate or not - and the fuel cost is negligible), the hydro, the wind, the solar, the contracted non-utility generators, the embedded generators and the self-scheduling small generators, we are left with fossil fuel generators that have an annual fuel cost in the range of $400-$500 million.
$500 million is a plausible estimate of the maximum annual savings in a market that will likely have charges of just under $12 billion in 2013, up from about $10.25 billion in 2012.

The truth is obvious to all followers of the sector; there is no way for Ontarians, collectively, to cut electricity enough to recognize net savings in the face of commodity rate inflation exceeding 16% (this year).

"when you conserve electricity at home, less raw material is used for making electricity, and there is less need to build new electricity generation, and less need for new electricity transmission, which requires less distribution to your home."
"...you not only save money on your electricity bills, you also save again because there is less need for new electricity infrastructure"

There is no evidence the orgy of spending on "smart" meters, "smart" grids, and transmission for low value variable energy resources (VERs - ie. wind and solar) will slow significantly- there is tremendous inertia driving capital spending at Hydro One (including that their rates are set to provide a return on equity, so the more the regulator allows to be thrown down the VER hole, the better the bonus cheques)

Capital expenditures rose consistenly from the peak demand year of 2005 

A couple of claims on pages accessed from the emPOWER Me page deserve comment.

Market Price vs. Contract Price

Your LDC buys your electricity from Ontario’s electricity generators through the Independent Electricity System Operator (IESO), which operates Ontario’s wholesale electricity market. To ensure we always have a steady and reliable supply, a number of electricity generators get contracts to supply power at a fixed price. However, because power is bought and sold on a market where price varies by the hour, sometimes the market price is lower than the contract price. A charge called the Global Adjustment makes up for that gap between prices and covers other related costs of purchasing power. Unless you have a retail contract, the Global Adjustment cost is already built into the price of a kilowatt-hour that you see on your bill.

 "A number of generators" getting contracts is an understatement.

Parker Gallant and I wrote on the damage being done by their non-regulated assets being the only generation exposed to the wholesale market pricing; and those generators appear on the cusp of being guaranteed a much higher rate too.

The wholesale market does determine prices for exported generation, and the depressed market rates therefore act as an enormous subsidy of exported power, paid by Ontario's ratepayers.

Ways to estimate Ontario's losses on electricity exports discusses different approaches to quantify the cost of exporting.

The Debt Retirement Charge

Graphic from Ontario's Fall Economic Statement

... is helping pay down the debt of the former Ontario Hydro. Although the debt was acquired in the past, the electricity generation and transmission infrastructure financed by the debt continue to be used by all Ontario’s electricity consumers. For this reason, today’s customers contribute to paying down the debt through the 0.7¢/kWh Debt Retirement Charge.
Since 2003, we've paid off over $5.7 billion and the Ontario Electricity Financial Corporation estimates that the Debt Retirement Charge will likely end by 2018.

I have written extensively on the accounting of the stranded debt - most significantly in Stranded Debt, Abandoned Responsibility.

The OEFC's 2004 Annual Report (and the next 7 ones afterwards) provided no justification for what is now shown as a $4.4 billion jump in the "residual stranded debt" that year - it seems an afterthought only introduced after the Auditor General reported on the abscence of accounting on the DRC funds:

“Electricity consumers deserve to know where things stand and how the government is calculating the current ‘residual stranded debt’ balance that they have been paying a special charge to retire,” McCarter said today following the release of the report.
“This is particularly the case because more than $8 billion has been collected over nearly 10 years to retire what was originally a $7.8 billion residual stranded debt left from the restructuring of Ontario’s electricity sector in 1999.”

It's a farce - particularly as the government left this charge on ratepayers' bills while introducing a larger credit in the comically named Ontario Clean Energy Benefit (OCEB).

The DRC exists because it is associated with the PC party
The OCEB exists because it is associated with the Liberal party.

Neither are relevant to a discussion involving energy literacy.

Curtailment of electricity supply in Ontario

I've just developed some queries to estimate the curtailment of wind supply on the Ontario grid, and thought a quick, primarily "stats", post might interest some of my readers.

This also provides an opportunity to review methods that the Independent Electricity System Operator (IESO) uses to reduce supply, and the limitations of estimating those curtailment actions.

1. Non-Utility Generator (NUG) curtailment (discussed here)
2. Hydroelectric output being redirected directly in Quebec's high-voltage direct current (HVDC) grid (discussed here)
3. Nuclear curtailment maneuvering condenser steam discharge valves (CSDV) to reduce output at all Bruce Power's 8 reactors (Bruce A's units gained this capability since I discussed the curtailment method here)
4. Wind curtailment, which became possible on September 11th, 2013, as a result of the IESO's renewable integration initiative.

Generators Output and Capability Report

On September 10th the IESO changed it's "Generators Output and Capability" report to indicate the "forecast" for the hourly output from industrial wind generators.  The difference between the "forecast" and the "output" appears to provide a method to estimate the amount of wind curtailment: in the 30 days from September 11 to October 10, the sum of the differences is 28,053 MWh, while the IESO has presented dispatch of 28GWh for the same period.

In the 66 days since curtailment of the wind resource was introduced, curtailment is approximately 61GWh - at any average price of $120 that would equate to a cost of $7.3 million (~$110,800/day) if suppliers are reimbursed for curtailment. 

One of Kathleen Wynne's first acts of Premier appears to have been forcing an agreement to pay the wind companies for curtailed supply - although the details of a settlement that got suppliers to halt proceeding at the Ontario Energy Board are secret (the board should have refused to hear them anyway).

There is a lot of area of uncertainty in my estimates of nuclear curtailments, in that the estimates are based on when Bruce Power's nuclear units are operating in the range characterized in a reduction maneuver.  If a unit is running at a reduced level for technical reasons my estimates include it as a curtailment.  However, if a unit is completely powered down due to an extended period of surplus, my estimates do not show it.  

As examples;

The IESO reported that "The total loss in nuclear energy due to SBG [surplus baseload generation] as of May 15, 2013 is 310 GWh..."
My estimate is only 97GWh (nuclear steam bypass only).  

Conversely, in August Bruce's unit 3 ran at reduced power almost the entire month, which is captured as curtailment in my estimates, but probably isn't.  

Estimates: Nov 6-12, 2013

While the science of estimating using only data algorithms is not precise, it's much better than not estimating - and my weekly and monthly charting of the estimates shows they are generally valid.

It's important to remember that there is more curtailed than wind; in fact wind curtailments appear to be only about 20% of nuclear curtailments thus far.

In agreeing to pay for wind turbine curtailment periods, the cost may be far higher than the $35-$40 million a year the first 66 days of data might indicate.  During that time it was windy much of the time nuclear curtailment was occurring.  If wind had never been contracted, the savings, on only eliminating paying for curtailment, may have been as much as $240 million a year

NOTES:
"Bumped" indicates curtailments that were made while an equal amount of wind output was being purchased"

The Google spreadsheet generated in creating this post is here


Follow-up:

The numbers from the weekend are remarkable.
Ontario's electricity sector essentially paid more to curtail supply than it received from generation this weekend.

About 5% of contracted supply looks to have been curtailed (43GWh curtailed, 793GWh produced)

The total market (HOEP) value of all Ontario production on the weekend was ~$3,430,887

I'll value the curtailments that occurred while we were purchasing wind at the wind value (because that's the true cost to the end consumer)- wind at $120/MWh times 30,887MWh = $3,706,440
The remaining curtailment I'll estimate at $65/MWh; a blend of Bruce A and Bruce B rate (12033MWh = $752,145)

The total cost of curtailments is therefore estimated at $4,599,571, which is 31% more that the entire market value of all the production that was not curtailed.

A record week for Ontario wind

Each week I update my estimates/shadow reporting of the Independent Electricity System Operator (IESO) data reports; the IESO reports weeks as running from Wednesday to Tuesday.
I reference the first Wednesday of the year as marking week 1; today we begin week 46.

Weekly supply mix chart (from data site)

Week 45 was pretty interesting.
It set at least one record - the highest reporting output from the industrial wind turbines on the IESO grid.

The week also contained the hour of highest IWT output, which is currently hour 11 of the 11th day of the 11th month [1].

Coupled with high nuclear production levels, this plentiful supply resulted in an average Hourly Ontario Energy Price (HOEP) of $10.23/MWh; that is the second lowest weekly average since the market began (record low is week 14 of 2009, at the depth of the recession and the height of the freshet).

A twitter exchange has motivated me to write a quick entry on the cost of Ontario's changed supply mix at this time of year (all of impacts being predicted by the data analysis behind an earlier blog post).

In Ontario, high supply and low prices end up being very expensive for consumers.

Low emissions from electricity production is wonderful, but the reality we know is that because gas, and coal, generation essentially receives payment to exist, the incremental cost of generation from those sources is cheap.
Flipped around, any generation that displaces previous years' levels of production from natural gas-fired generators is displacing production valued around $30/MWh - so the output of Bruce A reactors would cost $40-$50 more than the gas-fired generation it displaced, and new wind generators getting the feed-in tariff rate of $135 would cost over $100/MWh more.

Each week I graph the changes - and for week 45, it's good for the environment (higher wind, nuclear and imports - which come primarily from Quebec and are therefore hydro) -- and that will be very expensive for Ontario's ratepayers.

for a better view, the graph is interactive on the data site

What's really shocking to me, with the history of producing this weekly, is that the output from the hydroelectric producers on the IESO's grid is down on the week.

Consider that in light of the reported water levels of the great lakes; Ontario, Superior and Huron are over a foot higher than a year ago.

I have not developed a method of estimating how much hydro is spilled when the wind blows, but I have developed tools to estimate how much nuclear and non-utility generator production is curtailed,as well as estimating how much power is fed directly (primarily from Saunders) into Quebec's grid.



The figures (a copy of the spreadsheet is here) indicate about 30% of the record weekly wind production resulted in the curtailment of other, cheaper, supply.

The hydro figures show other supply was curtailed too, but we don't get reporting on that.
There is also no reporting on how much wind production is being curtailed

Much of the potential wind supply that is not curtailed, or pushing other supply into being curtailed, is bound for export markets.  The export figures show much of the remaining production was sold not at the $135/MWh being paid, but at around the $10/MWh HOEP.

If you have shares in TransAlta, or Suncor, or Enbridge, or the other companies owning Ontairo's industrial wind turbines, you can celebrate a record week of wind production with a fine vintage.

If not, you might wait until you see the global adjustment charge on the bill for November ... and then recognize the accomplishment with a spot of tea as you try and keep warm.


Endnote/Postscript
[1] The record hourly output was surpassed multiple times by the end of the day this was posted (Nov. 13th)

There's never been a worse time for this Conservation thing

To every thing there is a season, and a time to every purpose under the heaven:
A time to be born, and a time to die; a time to plant, and a time to pluck up that which is planted   - Ecclesiastes ,3 King James Version [1]

A time to conserve - a time to consume.

As the clock struck midnight with the arrival of November, my hourly rate for electricity went up 7.5%[2], while the rate for export customers was around 1/10th of the residential rate in Ontario, and over 20% of Ontario's generation was being gifted away at those low, low prices.

“There’s never a wrong time to do the right thing ...” - Dalton McGuinty

The current Premier would appear to be trying to take a page out of her predecessor's book of wisdom (a page with 10 words), as her administration seems to have turned the entire public service to promoting "conservation" regardless of the circumstance (abundance).  In a simpleton's world of good and bad, conservation is portrayed as the very best regardless.

Conservation may be, but the conservation the government's agencies are spending their time, and our money, promoting won't conserve energy this winter.

In a recent Twitter Campaign on "phantom power" Ontario's Ministry of Energy found these messages important to communicate:

• Count em' up: how many non-essential appliances do you have plugged in?
• Plug into a power bar with an integrated timer or auto-shutoff. Here’s a coupon...
• Gaming consoles draw #phantompower. Plug them into a power bar and switching it off when you’re not playing
• Unplug that hairdryer or electric toothbrush to save...
• Chargers for cellphones, laptops and other personal devices draw #phantompower. Unplug them when you’re not charging. 
• Unplug small kitchen appliances when not in use. Otherwise they draw...

Regardless of the moral righteousness of conservation programming in general, I got the feeling Ministry wasn't really aware of how phantom power wastes "energy".


I tried asking;

@OntMinEnergy If you had to pick the worst time of year to address phantom power, would it not be the now - as heating season starts?
— Scott Luft (@ScottLuft) October 29, 2013

The "phantom" electricity produces heat, and we, in Ontario, are now entering 6 months of heating.   Energy won't be conserved by unplugging your toaster; electricity will be conserved and, in most houses, it will be replaced with natural gas heating (or oil ... or propane ...).

Substitution is not conservation.

Meh... It's a ministry and political games are expected.

But why would the nominally independent provincially owned utility, Hydro One, participate in this nonsense?

• Unplug battery chargers as soon as the device is fully charged or when the charger is not being used.
• Plug all electronics into a power bar that can be easily switched off when the electronics are not being used.
• The easiest way to eliminate standby power loss is to unplug electronic devices when they are not in use.
• Appliances still draw power when turned off but plugged in.

Hydro One is selling gas - because government requires them to do so.

Throughout October 2013 Ontario was, on average, a net exporter of over 1,400,000 kilowatts of electricity - over the past 12 months the average is over 1,500,000 kilowatts.  Put in news release electricity units, Ontario averages electricity exports enough to power over 1.25 million homes. [3]

Ontario provides power to those over 1.25 million foreign homes at prices stuck well below 3 cents per kilowatt hour ($30/MWh), which is the price the Ontario Power Authority (OPA) claimed it had been spending on conservation.

As I do most months, I again received an advertisement from my utility, and the OPA, enticing the owners of central air conditioning (not me) to participate in peak-saver plus - a program that will provide the customer with a smartish home thermostat [4], so that the utility can curtail the electricity draw from your air conditioning when demand requires it.

I'll end the post on a positive note.

I can't participate in the program to relinquish control of power hogs I don't have, but I did use the program to reduce the use of other energy sources.

With a smile:

"Smile if you're saving [electrical] energy right now"

Endnotes:

[1] The Byrds took it from Pete Seeger who got it from the Bible.

[2] Time-of-use off-peak electricity rate.  The rate is set twice a year, and the off-peak rate for the upcoming winter is actually 14% higher than the previous winter's
Ontario Energy Board: Historical Electricity Prices

[3] The "home" may not be the greatest unit of measurement - it's meant to be communicative because people supposedly can associate it better than the watt.
Unfortunately, the purpose of communication is not necessarily to educate:
When the Ontario government released Making Choices: Reviewing Ontario’s Long-Term Energy Plan, it included "Since 2005, Ontario has saved over 1,900 megawatts of power based on the actions of homeowners, business and industry . That is the equivalent of more than 600,000 homes being taken off the grid."
The statement is problematic as Ontario hasn't intentionally accomplished that reduction, and based on 800 kWh per month (here), the number of homes is 1/3rd of what math would put it at (over 1.7 million).
The 1900 megawatts is about half due to large industrial "conservation" (aka closing/leaving)
another chunk of it is due to extremely expensive "embedded" generation - because nobody in Ontario releases information on how much this largely solar component, it's reported as reduced demand, instead of reporting as increased, and extraodinarily expensive, production.

[4] Not the Nest product people want.