What’s with the electricity system witchhunt?
UPDATE: I’m told by the Independent Electricity System Operator that surplus baseload is down significantly over last year. So far this year we’ve had roughly 60 hours of surplus baseload, versus something in the area of 1,000 hours during 2009. As we move closer to shutting down all coal plants, we’ll look back on these days of surplus with envy.
UPDATE II: This column from the SUN is over the top. The zinger comes from Energy Probe’s executive director Lawrence Solomon, who says coal is clean and should be kept, not retired. He says this because he’s a climate-change denier and doesn’t recognize the CO2 from coal plants as a concern. Also, Ontario Progressive Conservative leader Tim Hudak continues his game of deception by numbers. He said this week that the Ontario Power Authority has ballooned from 15 employees in 2005 to over 300 employees today and its budget in that time has “exploded” by a staggering 465 per cent with nothing to show for it. Without defending the OPA, let’s defend the facts instead. Comparing to 2005 is misleading since the agency was just getting started and was in ramp-up mode. Of course its employee count and budget have grown. But compare the years between 2007 and 2009, as well as 2010 projections, and you’ll find that the budget has stayed relatively stable even as OPA staff are taking on more and more. In 2007 the operating budget was $56.5 million, which rose to $67.5 million in 2008 and fell slightly to $65.1 million in 2009. That budget is expected to remain in 2010. Also, the employee count is closer to 230, not 300. I’m not entirely sure how the Conservatives would run the electricity system without an OPA-like organization. It would probably fold it into another agency or Hydro One, where it would get lost in an even larger bureaucracy. Again, all I hear is criticism; what I don’t hear are solutions or ways of doing things better.
Holy cow, Ontario can’t seem to burp out an electron without some media outlet pouncing and raising a stink about high energy prices or surplus baseload or the cost of conservation or how smart meters are driving senior citizens into poverty. The introduction of the harmonized sales tax didn’t help. Had the HST never been introduced to electricity bills, I wonder whether the other costs felt to date — smart meters, conservation, cost of adding natural gas to the system, some wind, etc… — would have caused such an uproar. The HST as applied to energy was a major Liberal fumble. Beyond that, everything else actually makes sense.
Still, it’s like after a year or two of warning people that renewing the electricity system was going to cause price increases, the press woke up and said, “Hey, what’s with these higher prices?” Anyway, ’nuff with the rant. My biggest concerns is that green energy and the FIT program is being prematurely blamed, when green energy is really just causing a sliver of what we’re seeing today (see my upcoming Monday column).
The latest witchhunt targets surplus baseload. There was a story on CTV.ca this evening pointing out that the Ontario government paid nuclear operator Bruce Power nearly $60 million to not generate electricity because the province had too much baseload power in 2009 and something had to get turned off to protect the stability of the system. What is buried at the end of the story is that in return for this agreement to pay Bruce, the Ontario Power Authority capped how much electricity ratepayers had to pay for cost overruns related to the refurbishment of two nuclear reactors. That part of the deal is expected to save ratepayers about $85 million, based on the most recent cost overrun estimates by Bruce shareholders. So, as far as 2009 goes, we’re still $25 million ahead.
The wildcard is 2010. How many surplus baseload days did we have in 2010 and what will ratepayers have to pay Bruce? Will it be $25 million, in which case we break even? Or will it be more? But even if it is more, is it worth it? I mean, the low baseload power demand is the result of an economic downturn in a year where we had a cool summer. Governments can’t predict this or control it. If we didn’t have Bruce Power there during economic boom times in the middle of a heat wave then we’d risk having blackouts and people would be screaming bloody murder. When they’re there and we don’t use them, it’s called backup. When we need them and they’re not there, it’s called trouble. I’d rather have the former and pay a little bit for it.