Ontario Electricity Prices a Bargain
Some of the opponents of green energy have been saying that Ontario’s residential electricity prices are the second highest in North America. This was repeated as recently as last week by Gwyn Morgan in a column in the Globe and Mail. Gwyn Morgan is the former CEO of the natural gas producer, Encana, and currently chair of SNC Lavalin. It surprised me to hear that Ontario’s electricity prices were the second highest in North America (after PEI), so I decided to do some research.
My brother Jim lives on Long Island. So I asked him to send me copy of a power bill. The bill showed consumption of 440 kWh, and the total price was $89.18, or 20.2 cents/kWh. Then I pulled out one of my bills, which had consumption of 382 kWh, for a total price including taxes of $73.51, or 19.3 cents per kWh. So my price per kWh delivered was 5% less than my brother’s. So the statement that Ontario’s electricity prices are the second highest in North America is simply not true. I found it to be untrue at the first place I checked. This is a recurring pattern with the forces against green energy – truth seems to be unimportant to them.
When you think further about it, though, the difference between the bills becomes more significant. After all, my bill includes the 13% HST, and his bill includes only a 2.5% sales tax – a full 10% difference. But my taxes pay for my health care. My brother has to buy health care. So not only do I pay less for electricity, I also receive more benefit from the taxes that are levied on the bill.
But lets suppose you do believe that our electricity prices are too high. What are the sources of that cost? It turns out that nuclear is responsible for 45% of recent cost increases, and renewable energy has been responsible for 6%. This is found in a recently released report prepared for the Ontario Energy Board, and blogged about here.
Truth matters. And Ontario’s retail electricity prices are not highest or second highest in North America. And green energy is only a small part of the cost.
June 6th, 2012 at 8:42 am
Sometimes it is hard to separate the ‘wheat from the chaff’. It is hard to know what is the most important thing, to ‘cut to the chase’, as it were. The anti-wind crowd, by taking a shotgun approach of scattering misinformation and half-truths, knows this and capitalizes on it.
Take, for example, this whole notion that Green Energy is way more expensive than conventional generation…
Some say that green energy alternatives are “uneconomic without huge, direct subsidies from taxpayers.”(Lorne Gunter, columnist Osprey News Group). While it is true that solar and wind farms receive a premium price for the electricity they produce, we need to understand that we, as taxpayers, subsidize nuclear and other forms of generation to a far greater extent. We have paid to build the nuke plants, overpaid to refurbish them, paid for the interest on the debt associated with them, and annually paid millions to the Atomic Energy of Canada folks in direct subsidies. We also, as taxpayers, provide the insurance for the nuclear plants, simply because the liability is far too great for any underwriter to possibly consider taking on. In other words, insurers know that the cost will be unfathomable and irrecoverable when an accident happens. We, the taxpayers, will also be on the hook for the costs of the disposal of the nuclear waste…that is if we ever figure out what to do with it! That amounts to a lot of subsidization.
We also pay the costs for health-care of the estimated 5000 people who annually are hospitalized due to smog-related illness…historically caused, to a great extent, by our coal-fired generators. This is a form of subsidization. (Thankfully, and in some part due to wind-farm generation, we are rapidly reducing the amount of coal we burn to make electricity.)
The Feed In Tariff (FIT) price for new wind energy is around 11 cents/kilowatt hour. Consider that this price is locked in for 20 years, with only a fraction of the Cost of Living added, and that there are no emissions, and it looks like a pretty good deal from where this ratepayer is sitting.
The price paid for solar is decreasing rapidly, and while it is still expensive, the industry may now have a foothold substantial enough to soon achieve Market Parity…the point at which the price of solar is equal or less than the price of conventional generation. This day will never come if the industry is not given a shot-in-the-arm to get going.
We, as a nation, have been subsidizing oil and gas exploration, as a matter of policy, for years.
So what are the Anti’s saying? That it is OK to subsidize the polluting and dangerous forms of electrical generation, but not the clean ones?
Every consumer and every taxpayer needs to understand what follows here…
There is a battle raging in our province about who is going to sell us our energy for the next 50 years or so. Right now we have installed capacity of about 34% from the nukes, 28% from gas generators, 23% from hydro-electric, 10% still from coal, 4.5% from wind and solar, the rest from other (biomass etc.) sources. The actual amount we buy varies from time to time, due to outages, and capacity factors of certain types of supply. The point is, all of these types of generators want to sell us more of their product. Public sentiment will help determine public policy, and public policy will determine what types of new generation get built. Whatever gets built is what we will have to purchase for the next couple of generations at least.
There is a lot of money at stake, and the outfits that sell us our power currently, (no pun intended), do not want to lose any more market share to the renewable generators, (wind and solar primarily), than they already have.
I think that is why there is so much misinformation out there about renewables causing everything from ill health, to declining property values, to increasing electricity bills, to earthworm migrations, bird deaths, miscarriages in cattle…and on and on. The more doubt put in the public’s mind about the wisdom of using renewable energy…the longer we have to buy power from the established sources. It is a tactic that the tobacco industry has used pretty successfully for 50 years…spread misinformation, call for more (tainted) studies to muddy-up the science, and hire powerful lobbyists to get the ear of the politicians.
I think that is why the Power Workers’ Union is advertising on Toronto Blue Jays’ baseball broadcasts. That is why nuclear plants advertise at the Air Canada Centre. After all, why would a union need to advertise its own merits to a wide audience? Why would a utility want to brush up its public image? Isn’t it just their job to “keep the lights on” as they brag? It’s kind of like the Sewer Workers’ Union bragging that they’ve kept effluent running downhill! Why advertise?? Could it be to curry favour with the public in order to perhaps influence policy when the time comes for a government decision about building new generation? What else?
It is a short-sighted view that perseverates on the challenges of integrating renewables into our electricity mix. Using increased electricity prices as a crutch, naysayers point out the difficulties with matching base-load generation with demand during times of little or lots of wind. They say wind is intermittent, (I assume that they know solar and nuclear is too!). What these myopic doubters don’t imagine is a smart grid that can find innovative ways to store excess power, hydro-electric installations that can reserve water flow for times of higher demand, new industries that can operate flexibly to match times of greater and lesser base-load generation, or the impact that a complete fleet of electric vehicles could achieve…and on and on.
The tragedies that I see pending, if the anti-renewable faction are to have their way, are…
1) That our inevitable switch to using more renewable energy will be delayed, to the direct benefit of the coal, nuclear, and gas generating industries…and to the detriment of the planet
and…
2) that our local communities, fed with misleading and misguided information, will needlessly suffer some divisions and hard feelings, while we argue amongst ourselves about a subject that just isn’t that complicated…
…it’s about the money, and it’s about doing what is right.
July 29th, 2012 at 3:24 pm
By referring to “the forces against green energy” I think you give them a far higher status than is real. I would think “truth bending” and “lacking in any perception of the real cost of traditional (fossil fuel based) energy sources”.
Thanks