At the end of the week ... and the IESO 18-Month Outlook

A review of some events from the past week unrelated to drugs and elites and former TV celebs on public teats.

Early in the week, Tom Adams' site entered it's 5th year.  His observations have, unfortunately, never been more necessary.  Hopefully Adams is receptive to a cry of "4 more years!"

Politically, NDP "Leader" Andrea Horwath announced she would continue to support the Ontario Liberal government.  All rookie leaders in Ontario tend to have dissappointing first election campaigns, but Horwath has, in my view, distinguished herself in increasingly demonstrating she feels an incompetent Liberal government superior to one she would lead.
After 4 years of pain since the foolish Smitherman/McGuinty policies were introduced to Ontario's electricity sector in the form of the Green Energy Act, we look set for two more years of pain, unless the NDP is able to dispose of it's "leader."

Speaking of disposal ... the Independent Electricity System Operator (IESO) released it's latest 18-Month Outlook on Friday.  I've previously written on the relevance of the concluding paragraphs of IESO outlooks, and this one concludes:

Forecasting for embedded variable resources will be developed by Q3 2013. Additionally, RII [Renewable Integration Initiative] will facilitate the dispatching of variable generation, with implementation set for September 2013. 

Variable generation dispatch will allow for greater flexibility and help alleviate surplus baseload generation concerns.

Uh huh

Alleviating the IESO's "concerns" isn't related to controlling costs, or stopping the growth of the SBG problem.

During the next 18 months, approximately 3,300 megawatts (MW) of wind, solar, hydro and biomass capacity are expected to be connected to the transmission grid

To emphasize the issue, the night before the IESO released the forecast, Ontario experienced a scenario where baseload generation was going to exceed possible demand (internal and export) for most of the next day (which was leading into a long-weekend in the U.S.).  At 8 pm Thursday night, the expectation was that we'd give the Americans free supply on Friday.
Presumably to avoid that embarassment, Pickering's unit 4 and Bruce's unit 3 were taken offline overnight.

Consequently, by the time the 18-month outlook was released, it was already wrong in lowballing nuclear curtailments for the year:

there have been three nuclear shutdowns in 2013 year to date due to SBG events as opposed to one shutdown in 2012. The total loss in nuclear energy due to SBG as of May 15, 2013 is 310 GWh compared to 106 GWh for the same timeframe in 2012.

These are problems for ratepayers burdened by paying producers not to produce, but perhaps not for the IESO.

Slide 8 of Centralized Forecasting Accuracy

By the end of Friday, the inability to forecast supply and demand (the IESO no longer really reports on either - and it's not clear that they know that) presented itself another way - with 2 reactors taken offline, the Hourly Ontario Energy Price spiked to $510.98 in hour 21.  The wind forecast from hour 20 was for wind generation of 392MW (24 hours earlier the forecast was for 668MW). but the actual output was only 285MW - demand also shows as well above the forecast; so the price spike is the expected result of over-estimating supply and under-estimating demand.

Not that these are easy tasks, but it's notable that the IESO does not appear to be getting better at performing them; presentations dated during this week indicate the accuracy did improve during the first 8 months of central forecasting after a January 2012 start-up, but the performance has since been stagnant.  That performance level is measured as the forcast production less the actual, divided by the total capacity; when the price spiked Friday night this measurement the IESO uses was within target, so it's a metric of dubious value; it's worth noting that if renewable do grow to ~10000MW, the hour ahead average error, thus measured, is hoped to be 4.5% (the equivalent of a Pickering unit cutting out every hour), while the day ahead hope is for 9% (a Darlington unit cutting out every day).

Spastic pricing and expensive curtailment are characteristics continuing to be designed into Ontario's system.

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The IESO outlook addresses the low hydro output levels.  A topic I've tried to introduce on this blog, and in the Financial Post, is the negative impact Ontario's policies have had on hyroelectiric generation output, and the pricing received for that output by the public generator.

The forecasted monthly is typically the median contribution of hydroelectric energy at the time of weekday peak since 2002. However, if low water persists, the forecast is adjusted accordingly to reflect the observed trend. 

Uh huh

Here is a history of the IESO's inability to forecast, or structured avoidance of utilizing, hydroelectric supply since their focus turned to handling surplus baseload generation and facilitating the introduction of increasing amounts of variable intermittent wind, and solar, generation:

"Figure 7.2.2 Hydro Contributions (Energy and Operating Reserve) at the Time of Weekday Peak"

May 2013 Outlook

June 2102 Outlook

May 2011 Outlook

May 2010 Outlook

Spin Doctors: Air Quality in Ontario Report

The Ministry of the Environment's backgrounder for it's "2011 Air Quality in Ontario Report" caught my attention with statements such as, "air quality has improved significantly over the past 10 years."

This we knew already, but what about over the past year?

Figure 4.8 of Air Quality in Ontario: Report for 2011

I checked to see how 2011 compared to 2010.  I did not spot any accomplishments there, which is notable because Ontario's coal-fired generation of electricity reportedly dropped from 12.6TWh in 2010 to 4.3TWh in 2011.

The Ministry explains, "Emissions of NOx, CO and SO2 continue to decrease due in part to Ontario's air quality initiatives such as the phase-out of coal-fired generating stations."

The Ministry's backgrounder did not reconcile how the coal-fired generation drop in 2011 wasn't matched by declines in SO2 or NO2 in 2011, but it did provide a convenient excuse if air quality wasn't improving:

Transboundary emissions, mainly from the U.S., account for approximately half of Ontario's smog.

I'm rather doubtful that this stat is ever revisited; it's quoted now as it always has been - but it's worth a review of what's happening across the border.

I revisited U.S. Energy Information Administration (EIA) data to see how emissions from the generation of electricity in Ohio, Indiana and Michigan (as I did in July 2011).

The comparison is not perfect, as the Ontario report is for the entire province, and the EIA data is only for electricity generation.  Regardless, for the period of  2001-2010:

• Ontario's NOx emissions are down 36%, the group of 3 neighbouring states down 57%
• Ontario's SOx emissions are down 55%, while the states noted are down 43%
• Ontario's coal-fired generation is down ~90%, and the states only 4%

If there is one thing to be concerned about in this graph, it is that the trendy catchphrase that there is no such thing as cleaner coal has been halting the cleaning of the smokestacks that was addressing emissions up until 2009.

Which isn't to say all the rumours about coal are ill formed.  CO2 emissions in the states move in step with coal-fired generation.

It is to say that many groups are choosing to lie about the ability to clean smokestacks in a Machiavellian campaign to reduce CO2 emissions.

The problems with crooked means being employed to meet legitimate ends are unpredictable, but may include:

• an inability to site power plants intelligently due to the fear of any smokestack;
• a continued low priority for addressing gridlock, public transit and other urban planning issues

Apologies, and other positions for accountability

For the holiday weekend following a week of scandal featuring Senators and Mayors, a reminder of the irresponsibility of the mundane in Ontario's continuing electricity sector/Queen's Park saga

On May 14th, Ontario's Premier appeared on television to offer an apology, of sorts, to people who wanted an apology:

"I am very sorry about the mistakes that we made ... I take responsibility for putting a process in place that ensures this won't happen again..."
"... the people of Ontario need to hear I'm sorry because I am sorry that we didn't have a better process up front, I'm sorry that we didn't site those gas plants better, and that's why a new protocol needs to be in place"

The Premier directed the Independent Electricity System Operator (IESO) and the Ontario Power Authority (OPA) "develop a new regional energy planning process based on formal input from municipalities, communities and the energy sector."

The Oakville plant was sourced largely due to work by the IESO in establishing the need for generation in the area, with the particular siting the result of the procurement by the OPA.  Ontario's Chief Medical Officer of Health couldn't find evidence the plant would "negatively impact the health of area residents."

I can't find any evidence the Premier's directive won't further politicize the bureaucracy - using public offices as a means of avoiding political accountability.

NDP leader Andrea Horwath has some bureaucratic solutions to strengthen fiscal accountability

...Horwath says people want to see a Budget that’s balanced and accountable to ensure that public money is invested wisely. That’s why she’s proposing a Financial Accountability Office to provide independent oversight and public information about government spending.

Horwath took the Premier's apology on the gas plant as indicative that NDP braying on the gas plant issues had been effective in goading the Premier into meaningless action.


The Premier's empty action was demanded due to, in part, an openness in reporting structures instituted much earlier.  The figures now generally accepted on the gas plant scandal are similar to those long estimated by the independent minds outside of the government (Bruce Sharp and Tom Adams) - the data made available by the IESO, and the OPA's provision of easy access to Ministerial directives and other documentation are bones upon which some body of accountability has been shaped.

On May 15, around the same time the provincial NDP's alleged leader was taking credit for the meaningless apology of the Premier, the IESO was posting, presumably having received the tally from the OPA, final figures for April's Global Adjustment: the figure is $50 million higher than the estimate provided from the same organizations only 2 weeks earlier.

$50 million unexplained dollars pushed the commodity rate up more than 12% over April 2012.

The Ontario Power Authority was formed in 2005 to implement long-term planning for Ontario's electricity system.
It has not - primarily through no fault of it's own, but it has not.

The prorogue of the legislature in fall 2012 - to avoid accountability for the gas plant decisions - saw the death of legislation to kill the OPA.  Since that time it's become comical how often the OPA has released all requested documents only to find other documents.

The Chairman of the Board of the OPA is a problem.  Appearing before the legislative committee Jim Hinds explained the inability to release documents, in his introductory comments, with the explanation that "We are in the business of producing electricity and not producing documents."
The OPA is not in the business of producing electricity - they do function to procure the supply of electricity. Presumably a competence in handling - and producing - documentation would be helpful.

Particularly,  If you felt it important to get within $50 million a month on your billing estimates.

Regardless, the documents that were released convinced me that the people who work at the OPA were disregarded in negotiations, with a key document being an e-mail from Hinds laying out the path that would eventually chosen to resolve the cancellation of the plant in Oakville (page 303-304 of large .pdf).  With the long-term contracting of the existing OPG Lennox plant since done, by the OPA, Hinds is exposed as working against the competency of his organization as a strictly political operative of the governing party.

The Chief Executive Officer of the OPA is Colin Andersen; as his tenure began in September 2008, it encompasses the entirety of the contracting, cancellation and planned relocation of the Oakville generating station.  In Andersen's latest visit to the legislative committee, he produced a study the OPA - Ontario's experts in system planning and procurement - had commissioned in order to provide a more credible estimate than it could produce (and to pre-empt a report to be made by the Auditor General on the same topic).

What position mightd improve accountability in this environment where the public experts on planning and procurement hire external firms to produce reports to counteract the work of the public auditor:

Wynne's new process?
Horwath's new office?

Dangling?

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On Thursday the mayor of Toronto came out speaking negatively about the Premier's negotiating stance regarding the distribution of revenues from a Ontario Lottery and Gaming's proposal for a casino in downtown Toronto.

Hours later the head of OLG would be fired, with the entire board of OLG subsequently resigning as a result.

This provides the only indication of what is required for the Premier's office to act - to agree with the stance of her political opponents.

It is notable that the Premier appointed senior public servants as a new board

This has been a situation at the shell corporation known as the Ontario Electricity Financing Authority - where the design has been useful in politicizing the operations in order to protect the incumbent governing party (see Stranded Debt - Abandoned Responsibility )

Sunday sees Record Wind Power Generation in Ontario: Value of wind production continues to drop.

The output of industrial wind turbines hit an hourly high yesterday, according to data from the system operator  - the day produced the 12 highest hourly generation totals

The average weighted market price (HOEP) for yesterday's 36,350MWh of wind production [1] was $13.77/MWh.  If the average contract value for wind is $125/MWh, the loss is about $4 million.

There were no hours where the wind production exceeded net export levels

In a recent post I noted issues from the previous weekend; a quick comparison of the changes in generation, and exports, between Sundays May 5th and 12th indicates the impact of the wind production

To compensate for the additional wind generation, the system responded by increasing exports and dumping hydro.

The gap between the two lines reflects higher demand early on the 12th

During the earlier portions of the day the combination of decreasing hydroelectric generation and increasing exports far exceeds the increase in wind generation, which is explained by some increased demand [2], as well as an increase in nuclear generation compared to the prior Sunday.

It is apparent that during this day, increased wind that could not be dumped on export markets displaced hydroelectric generation


Relevance

Figure 3 from The Market Value of Variable Renewables

These record events are notable primarily as milestones along the trail that is the trendline.  The trend in Ontario will be increased dumping, of both water and electricity on external markets - and that will be the trend because of the nature of variable renewable energy supply (vRES).

In The Market Value of Variable Renewables Lion Hirth, writing for Vattenfall, demonstrates the falling value of vRES supply under different scenarios.  Hirth looks at Europe where, unlike in Ontario, apparently wind resource had a positive correlation to demand - so the first wind turbines produced output during periods of higher demand and therefore initially wind production had higher-than-average value.  Hirth measures the value of wind output using a percentage of the average price received on markets for wind output, over a period of time, as a percentage of the average market price over that time.

The more varaiable renewable energy supply increases, the more the relative value of vRES supply declines.

Ontario's market is particularly poorly suited to the introduction of variable renewable energy supply due to a high non-reservoir hydro and nuclear composition that results in a "steep merit-order curve" (see Hirth Figure 7 re: France)

I've pulled annual figures for wind production, total Ontario production, average rate (HOEP) for wind output and the average annual HOEP to produce measurements, comparable to those in the Hirth study, for Ontario.

The value of wind production in Ontario is eroding rapidly.




NOTES

The spreadsheet for this post is here

[1] This is only the production on the IESO's radar, and does not include the 'embedded' wind generation, which would likely add another ~15% to the wind total.
Embedded generation is shown as decreased demand in the IESO's inadequate reporting.

[2] Ontario demand is reported by the IESO in a format available to the public only on Friday afternoons - in order to compare using the same data sets, the "ON Demand" in this exercise is the sum of the generation in the IESO's Output & Capability Report plus the import/export totals from the intertie reports (these do not match perfectly to the weekly IESO's historical data files - for known reasons I won't cover here)

Now and then: Jose Etcheverry Opines on Nuclear Power in Ontario

Yesterday's Toronto Star included an opinion/commentary from Jose Etcheverry [1]; Cancellation of Ontario gas plants pales in comparison to nuclear repair costs.  That the article appeared on a particular day is probably relevant to some campaign being run through The Star, but the article isn't timely.  Etcheverry has been saying the same thing for a decade; which allows for a review of his statements today to include his public work from years past.

The bill for the Darlington nuclear plant rose from the original estimate of $3.95 billion to a final cost of $14.4 billion. Despite the cost, Darlington — like every nuclear plant built in Canada — failed to perform as planned and now demands costly repairs. - Now

Source of graph explained here 

Failing to perform as Etcheverry planned a decade ago is true, because Etcheverry expected very poor performance.

In 2004 The David Suzuki Foundation published Smart Generation: Powering Ontario with Renewable Energy; Jose Etcheverry is listed at the top of the authors list (just above Paul Gipe).  Table 2 of that document predicts 51.2 TWh of production from nuclear generation in 2010 (it was 82.9), dropping to only 22.8TWh in 2015 - when the most recent figure I've seen from an Ontario Power Authority expert, is 93TWh.

Not that the now discredited figures in that David Suzuki Foundation report originated with Etcheverry.

The footnotes lead back to a Pembina Foundation report from earlier in 2004; the lead author of Pembina's Power for the Future: Towards a Sustainable Electricity System for Ontario was Mark S. Winfield [2]... and that study notes 2003's Phasing Out Nuclear Power in Canada: Toward Sustainable Electricity Futures as a source of some figures (the first graphic in this post is built on a graphic in that report).

As dishonest as Etcheverry is with faking a poor performance record, using the term "repairs" competes with that tale for a fiction prize.  Table 6 of the Pembina report Etcheverry, and others, referenced in 2004 shows "Estimated Refurbishement Costs" - not "repair" costs, but a scheduled mid-life refurbishment.

Ontario’s largest nuclear plant, Bruce, was built in stages between 1970 and 1987 and repairs were started in 2005. The estimate for the repairs was $2.75 billion but it ended up costing $4.8 billion by the time the final bill was presented in 2012. - now

Clearly Etcheverry was familiar with Pembina's "Power for the Future", and it's estimated cost of the refurbishment work at Bruce 1 and 2 he refers to in this sentence; the final cost was at the high end of that projected range.  The result is the cheapest contracted electricity supply in Ontario (the public generator's rates are primarily regulated at prices far below even this).

The 4 units at Darlington produce more than twice the 2 refurbished units at Bruce A - so a $10 billion figure would still likely provide significantly cheaper supply than any other supply contracted by the OPA.

The Ontario government is allowing Ontario Power Generation to spend $1 billion so SNC-Lavalin Group and Alstom Power & Transport can develop a plan simply to estimate what it will take to repair Darlington.
Instead of saddling the public with high nuclear bills, the people and the government of Ontario should pause and consider what other civic tasks could be achieved with our money.
Here is a brief list of safer investments to create local jobs: Ontario community wind power at 11 cents per kilowatt-hour; local solar power (made in Ontario) for 35 cents per kWh; a network of combined heat and power plants (with district energy) for about 15 cents per kWh.

Let's look at the cost of Etcheverry's deception in 2012's terms, where we've seen the difference between his gang's 2004 prediction for nuclear production, and actual output, was about 45TWh.  Assuming those options for alternative generation average out to $135/MWh (which is the amount in the majority of contracts awarded for industrial wind generation in the province), and estimating the cost of nuclear output at around $60/MWh in 2012 (OPG $55/MWh, Bruce A $68.23, B $51.62), the chosen nuclear path resulted in a savings of ~$3.4 billion in 2012 alone - compared to the path Etcheverry and friends were steering the province towards in 2004.[3]

$3.4 billion is a big number, but it's just for one year - it would have grown every year since 2005, and will likely grow annually still, through at least 2018.


Endnote
[1] The article notes Etcheverry as "an associate professor in the Faculty of Environmental Studies [FES] at York University"
[2] Winfield is also an Associate Professor at York; the university notes:

 "FES [faculty of environmental studies] Professors Mark Winfield and José Etcheverry lead new initiative that solidifies FES as the preeminent place in Ontario for research and education on renewable energy."

[3] 45 million megawatt-hours at $75/MWh less than the alternatives provided by Etcheverry

The cost of a sunny week in Ontario

Ahhhhh, springtime, and a streak of brilliantly sunny days in Ontario.
Obviously my mind turned to capturing some changes to Ontario's electricity sector that are not being reported on by the system operator (the IESO), or the writers of all the contracts for supply (the OPA).

Now that streak is broken, and the rain is here, I've taken a couple of minutes after updating my weekly reporting figures to compare the 7 day periods starting on the 18th Wednesday of 2009 (when Ontario had virtually no solar) and 2013 - when we have some (my estimate was between 650 and 700MW).

Hours are not adjusted to Daylight Savings Time (hour 8 is 9am)

All solar capacity in Ontario is considered by the system operator as "embedded" generation - which means they don't see it or report on it.  What the IESO reports as 'demand' is not the amount of consumption in the system, but the amount of generation.  So without any solar data, the best way to estimate the impacts of solar output on Ontario's electricity sector is to compare the 'demand' shape from a period of comparable demand before solar capacity was substantial, and a brilliantly sunny week.

The change is quite dramatic.  While some of Monday-Friday changes might be explained by load shifting due to time-of-use pricing, the weekend is always off-peak pricing, and on the weekends the darkest hours are little changed, while what is being reported as demand is sharply down in the sunny hours.

Looking at the average hourly figures (not just the change) is a little bit more arduous, but note that for both weekdays, and weekend days, between 2009 and 2013 - at least for a sunny weak - the peak 'demand' that the IESO controlled generators must meet has moved from the afternoon to the early evening.

The 7pm start of off-peak hours was introduced to pacify angry electricity ratepayers prior to 2011's election, but it was never intelligent, and it will get stupider with every solar panel.

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There were a couple of lessons about electricity pricing in the week's data.  On Saturday morning a nuclear unit at Darlington tripped offline as demand was growing, no variable fossil fuel units were hot, and wind was was waning - the result was the highest hourly price in over 4 years.  That sounds alarmist, but the average rate for the day was still only $48.06/MWh.  What the spike should remind people is that pricing is determined by the relationship of supply and demand - not by demand levels alone.
Saturday's pricing showed the impact of a traditional generator tripping off, but as intermittent generation is added to the system, the price is more likely to reflect a failure to forecast generation levels as an issue with demand levels - as was demonstrated the following night when the wind output in hour 20 was far less than forecast in hour 19, and the hourly price spiked to $446.17/MWh.

These price spikes weren't expensive parts of the week - exports and curtailments were.

___

Weekly graphs on my data site demonstrate, for the week, the twin issues of a large nuclear baseload and the tendency of wind output to be strongest overnight increased both exports, and curtailments:

This graphic shows Saturday and Sunday as days 04 and 05.  It therefore indicates high winds on 4 nights coincided with curtailments at nuclear facilities, and on the weekend it shows ~400MW of non-utility generators were idled (a process that needs to be scheduled in advance), leading to the probability gas generators were being paid not to be online during the price spikes.

The graph I end today's post will show that the "Market Change" from last year spiked overnight.  I showed "Ontario Demand" figures earlier - the "Market Demand" is simply the Ontario demand plus exports - all of which is faked as it's actually the sum of all generators supplying the IESO grid plus all imports.

Exports have been particularly high overnight despite curtailments.  My estimates on the cost of supporting exports indicate the previous 3 weeks are in the top 5 since the market opened in 2002.

The second estimate of the Global Adjustment charge indicates April 2013 will have the highest commodity charge since the global adjustment was introduced in 2005.

May begins looking a lot worse.

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Quick calculation - 670MW of solar capacity assuming 28.5% CF (twice the average - but for a very sunny week!) at a conservative, for Ontario $500/MWh ... it's about $16 million for solar contracts for the week (which is not far off my estimate of subsidizing exports for the same period)

Debt; Data, OPG, Water and Wind; Week end Update:

Thoughts on some recent articles of interest - combined with fresh Ontario electricity system data for week 17 (Apr. 24th-30th), and preliminary reporting for the month of April, (including new supply cost estimates)

Parker Gallant and I co-wrote a column which appeared in May 2nd's Financial Post.  A couple of graphics might have emphasized a core argument in Ontario Power Generation turning water into debt: that the hit to OPG's earnings in recent years is in driving down the profitability (now a loss) of the unregulated hydroelectric business segment.

Some comments on the article indicate people have been conditioned/brainwashed to repeat claims about OPG in general, and nuclear in particular, but the facts we point out indicate other business segments have not changed much.- the only generator left exposed to market pricing is OPG - and they are only exposed in the unregulated hydro business segment.

The Ontario government introduced a budget on May 2nd, and the document feigns an update on the residual stranded debt, but really it just takes the budget 2012 estimate and makes it firm - promising they'll care to explain things before April 2014.  Everything I recently wrote in Stranded Debt - Abandoned Responsibility remains relevant.

Notice that after 2 years of the "unfunded liability dropping" while the "residual stranded debt" went up, suddenly we are to believe the stranded debt dropped as much (or more) than the total unfunded liability in the year the OEFC ceased to report; a year which was less profitable at the provincial generator (and Hydro One).

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Tom Adams has an interesting post this week: Proposed Ontario Energy Information Service.

Some excellent points are made about data  quality in Ontario and Canada.  One of the comments on the article in the Financial Post was that "OPG FAILED TO INVEST IN RENEWABLES"; aside from the fact OPG is prohibited from taking advantage of the rich contracts for renewables, last I checked the hydro generation being devalued was renewable.

Here's an example of the shoddy data available which is also an example that there is still value in shoddy data:

The figures for 2012, illustrated in this graph, are 2,584,538 MWh of wind, and 259,715 MWh for solar (a TWh being a million MWh). The hourly data from Ontario's system operator (IESO) shows 4.6TWh of wind production, and not all wind production is reported on by the IESO. I'd estimate both the wind and solar production to be double what Statistics Canada's CANSIM database indicates.
But the rules don't seem to have changed significantly in reporting hydroelectric generation, so the data is still useful in demonstrating recent extremely low levels of hydro production.
Tracking by week, using IESO data, I've seen the first 17 weeks of 2013 have hydro production down compared to the same week a year earlier - and 2012 was a bad year for hydro!

Adams notes the value of existing information at the IESO, but then jumps to seeing the Meter Data Management and Repository (MDM/R) activity at the IESO as a positive move.

I did not address the IESO's 2012 Annual Report when it was released, but let's review the MDM/R.  The IESO's 2012 Statement of Operations shows an actual deficit $36.5 million above plan, and smart metering entity deficit $36 million above plan - the reason being they had planned revenue of $41.5 million for a smart metering charge that didn't happen - until the regulator approved it in 2013. 

I think charging ratepayers for the MDM/R indicates there is no confidence that it will have value.

You know what apparently wouldn't be useful?

Staff who know how to work with the data.

Of $23,734,000 spent on the "Smart metering entity in 2012, $3,558,000 is Amortization, $1,540,000 interest and financing, $719,000 "computer services, support and equipment" and a whopping $15,303,000 was spent on "Contract services and consultants":  11% of the total was spent on labour; 64% of the total on "Contract services and consultants"

Our smart meter program = billions spent to make IBM a world leader in smart meter data management.

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Another recent post on this site included some levelized unit electricity cost (LUEC) figures - as they related to the global adjustment.  April is a good month to show the limitations of LUEC models: abundant cheap hydro, and a productive month for cheapish nuclear being characteristics of the month which preliminary estimates indicate will be the most expensive commodity charge in a decade ($28.61 HOEP + $54.55 class B GA = $83.16)

.

Low utilization of generating capacity with net revenue requirement (fossil fuel plants in Ontario) means higher prices. 

Dumping excess production means higher prices.

Wind production in April 2013 was up 23% over April 2012.

That was the first year-over-year growth in wind production in 6 months.

It couldn't have come at a worse time.

In Ontario, A Preference for Fraud

Yesterday the Chief Executive Officer of the Ontario Power Authority provided an updated estimate of the cost of bungling the Oakville Generating Station (OGS) in the morning; in the afternoon the current Premier of Ontario appeared before a committee investigating the gas plant boondoggles.

The Premier is described in one paper today as being "in the finest traditions of Sgt. Schultz," and yet from her words we can learn something, even when they are mainly communicating that she knows nothing.

"If we don't learn from the situations in Misssissauga and Oakville then we have failed those residents all over again," Wynne says     — (@AdrianMorrow) April 30, 2013

To Schultz/Wynne it's still only about the votes in Liberal-friendly ridings.

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OPA Chief Andersen delivered a document on "The Costs of Relocating the Oakville Generation Station" - a document prepared for the OPA by yet another consultant (NERA).  I didn't read through that document having already reviewed the presentation slides used by Andersen [1], by pulling up the estimates written by star electricity analyst Bruce Sharp over 6 months ago (also here).  While the numbers vary a little, Sharp's methodology seems to be, once again, vindicated.

The most significant difference I perceived, between Sharp's estimates and those of whatever consultant punched in the OPA's, is the OPA's show a "Savings from Time Deferral of Payments from 2014 to 2019" of $539 million.  Without that $539 million, the estimated relocation costs would be $849 million (not far from Sharp's updated estimates when providing testimony to the same committee in March).

$539 million by not building 900MW of supply until 2019... and that's firm supply - heck, it was even made clear yesterday the plant, when constructed, won't be efficient even by 2012 standards as the turbines were customized for rapid ramping.
This plant is to provide flexible, firm, supply.

If firm supply isn't needed, intermittent supply that is not expected to contribute to meeting peak demand periods cannot be needed either.
What would delaying unreliable intermittent generation by 5 years save - under this accounting?

• 900MW of wind at a 30% capacity factor and the $135/MWh FIT = $1.6 billioin
• 900MW of solar at a 14% capacity factor and a $500/MWh FIT = $2.7 billion

Why just nix 900MW?  If we don't need 900MW of firm capacity, we don't need any of the contracted, but not yet constructed, intermittents:

• 3000MW of wind at a 30% capacity factor and the $135/MWh FIT = $5.3 billioin
• 1500MW of solar at a 14% capacity factor and a $500/MWh FIT = $4.6 billion [2]

Compare this with nuclear, where under these rules Bruce Power just saved us a frick'n fortune by being years behind schedule in completing the Bruce 1 and 2 refurbs (2 Bruce units have been unexpectedly removed from service in the past 4 days concurrent with Ontario's struggles with the spring glut of supply).[3]

Tom Adams' Ontario Electricity System Operational Update #7: Green Energy, Cold Feet shows costs are, in fact, trending well below expectations, presumably from the delay in implementing poor long term energy plans.

Select projects aren't being delayed.

Three new industrial wind factory farms have recently appeared on the system operator's "Output and Capability Report" - the first since Pointe Aux Roches appeared (as PAROCHES) in November 2011.  2 of the 3 factories [4] are the properties of GDF Suez/International Power Canada - the company ownership shuffles around frequently, with the constant being the President and CEO, who is Mike Crawley, the former President of the Liberal Party of Ontario and the current President of the Liberal Party of Canada.
The fourth project to be added to the report is Nextera's Summerhaven - Nextera having broken into the ranks of feed-in tariff contract holders in July 2011 shortly after hiring former Liberal Premier David Peterson to lobby for them (here and here).

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The government was attempting to change the messaging in the press away from the gas plant scandal to a focus on their plan to lower insurance rates by up to 15% [5] .

The strategy would build on the success of the government’s 2010 reforms and a series of fraud prevention changes in January 2013. It also addresses additional recommendations proposed in the final report of the Auto Insurance Anti-Fraud Task Force and builds on actions the government has already taken to combat fraud and protect consumers.  -news release

The plan to appease the New Democratic Party's demands for to lower insurance rates, by ~15%, is to address fraud.

Almost a decade after acquiring power, the implication is that addressing fraud is necessary only as a matter of political expediency.

Otherwise, given the choice of between Ontarians having costs controlled or allowing fraud to continue, continued fraud is preferred.

Endnotes

[1]  As with all things gas plant scandal related, Tom Adams has been diligent in posting base documents at tomadamsenergy.com
[2] The calculations aren't without some support - if only by way a tweet:

@scottluft @aradwanski OPA: delay $164 M/yr for 5 yrs = NPV benefit of $539 M .. delay renewables subsidy of $2.5 B/yr = NPV > $8 BILLION.
— Bruce Sharp (@BSharpEnergy) April 30, 2013

[3] The nuclear situation in New Brunswick is even brighter, where they still haven't started significantly utilizing into the lifetime running hour of Point Lepreau - Point Lepreau back online at 35% power
[4]  Pointe Aux Roches is also IPC - the newer 2 are East Lake [St. Clair], and Erieau
[5]  Based on the press coverage it doesn't look as though they succeeded.