Ford’s Hydro One moves will not reduce electricity rates in the province

Government says intent behind these moves is to “lower electricity bills.” Whether these actions will have any significant effect on electricity rates remains an open question


The new Ford government has set in motion a string of high profile moves on Ontario’s electricity system. These included the ouster of Hydro One CEO Mayo Schmidt and the subsequent resignation of the remainder of the utility’s board, along with the announcement of the cancellation of 758 renewable energy projects.

The government also specifically targeted the 18.5-megawatt White Pines wind power project in Prince Edward County for termination in its July 12 Speech from the Throne.

These moves come on top of the government’s repeated statements of its intention to terminate the province’s cap and trade system for greenhouse gases, end subsidies for electric vehicles, and cancel GreenON support for home energy efficiency retrofits.

The government’s intent behind these moves, as stated in its Throne Speech, is to “lower electricity bills.” Whether the government’s actions will have any significant effect on electricity costs remains an open question at best.

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Mayo Schmidt, former CEO of Hydro One, talks to media /Archive Photo by THE CANADIAN PRESS

The specific merits of Hydro One now ex-CEO Schmidt’s $6 million/yr pay notwithstanding, executive compensation in the Ontario electricity system constitutes a tiny portion of overall costs, amounting to pennies per month on the average residential hydro bill.

The recently announced renewable energy project cancellations were relatively small and represented the province’s last round of intended renewable energy procurements. The costs of the litigation flowing from their cancellations may far exceed whatever amount the province thought it might save.

The proponent of the White Pines project has already signaled its intention to seek $100 million in damages as a result of the government’s actions. Echoes of the gas plant cancellation scandal that destroyed Dalton McGuinty’s premiership loom large already.

The government appears to believe that it can protect itself from such lawsuits through legislation. That remains to be seen, although provincial legislation will do nothing to shield the province from actions by investors from countries which have signed trade agreements with Canada including provisions, like NAFTA’s notorious Chapter 11, allowing investors to seek compensation from host countries that take actions that damage the value of their investments.

Canada has entered into dozens of such agreements over the past two decades.

At the same time, the new government remains steadfast in its obstinate refusal to examine what was identified, within the previous government’s Long-Term Energy Plan, as the key drivers of future increases in electricity costs in Ontario: namely the planned refurbishments of the Darlington and Bruce nuclear power plants; and the proposed, and potentially perilous, “life-extension” of the already aged Pickering facility. The Liberal’s plan foresaw hydro rate increases in excess of 50 percent over the next twenty years, in large part due to these projects.

a-hydro-dam-in-Ontario
The attack on solar energy impacting high hydro costs or Ontario’s electricity costs has been relentless by some media outlets. But do they have a point? /Graham Hughes/Canadian Press

The government’s approach carries with it other major risks. The government’s moves have been sending very clear signals that Ontario may not be a stable location for major energy investments.

More specifically, the government’s energy strategy, such as it is, seems to be specifically targeting technological developments that are widely seen as constituting the leading edge in the evolution of the energy sector globally.

These include renewable energy technologies, whose technical and economic performance has improved dramatically over the past decade towards near parity with conventional energy sources; energy storage, central to the growing adoption of electric and hybrid-electric vehicles, advanced electronics, and the modernization of electricity systems; and smart grids, allowing the integration of distributed, and potentially more reliable, cost-effective, and resilient energy sources. In effect, Ontario seems to be announcing that it has no interest in being part of those developments.

Premier-Doug-Ford
Premier Doug Ford on the lawn of the Ontario legislature on Friday, June 8, 2018. / THE CANADIAN PRESS

If the Ford government is serious about reducing electricity costs in the long term, the most sensible course would be to pause and take stock of the full range of options available to the province in terms of meeting its future electricity needs. These options need to not only include nuclear refurbishments but also importing electricity from Quebec, conservation initiatives and adding more renewable energy to the grid.

The province should then choose its path forward based on which options offer the lowest long-term economic and environmental costs and risks, and the greatest flexibility to respond to changing economic and environmental conditions.

Whether the Ford government can move beyond its current fixation on dismantling the previous government’s climate change strategy, and its apparently profound loathing of anything to do with renewable energy, to articulate a viable energy and hydro strategy that will actually protect Ontario consumers from future cost increases remains to be seen.

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  1. I believe the theme of the new Ontario Gov’t is to focus future energy infrastructure investments in the hands of the government, ie. the private sector bonanza under the Liberals is over. So private energy investment may be alienated, but thats OK because for the next while, private investment will not be solicited. Ontario Hydro will be re-privatized as a Crown corporation as part of this strategy.

  2. Firstly, the home energy rebates are still there as always, it’s only the Liberals home GreenON program that he cancelled (and I’m not a lawyer but was that also only for specific companies to provide the solutions? and was it also partly funded by a private equity company or two? and was it also supposed to be funded by an untraceable carbon program which even Kevin O’Leary demanded accountability for? hint hint??) Secondly, the 758 renewable energy contracts that were cancelled…did you do your homework on them? I was involved in the program since its inception so let me explain a few things: Under the Liberals the all-in cost for electricity has risen to over $0.21/kWh for some customers (I’ve been doing assessments for years and the average is $0.17 to $0.24) and yet the contracts that were awarded were under a new “lowest bidder” war; so you can do your homework and happily correct me if I’m wrong but I was involved in $30 million in awarded contracts and can assure you that many (maybe ALL) were only going to be getting investors less than $0.21/kWh. Maybe a few were going to pay more but don’t forget that’s for a static 20-year PPA. What does that mean? It means that it’s a MUCH BETTER investment for the investors to simply pull out of those silly contracts themselves if they could, and sell power directly to the end-user clients (or even to the utility) without a static 20-year PPA but rather at the regular rates, which are continuously escalating rates (even inflation alone) rather than get sucked into a $0.21/kWh for 20 year PPA. That’s a losing investment and I’m sure Ford Nation was not the only one who was happy to pull the plug on the program. I wonder if the media will go and ask any of the investors themselves who were just rescued from crap investments. Sure, a lot of money was spent on Connection Impact Assessment reports and preliminary engineering but that information can still be used to create a new contract. And if they don’t and anyone tries to sue; they can succumb to the same fate as Sky Power and all others who failed to beat the OPA (now merged with IESO) at their program because the very first page of the program notifies everyone that it’s a HIGH RISK investment via the statement that says “The OPA/IESO reserves the right to modify or cancel the program at any time at its sole discretion”. Of course, now that the Liberals are gone maybe there’s a chance for Ontario farmers and land owners to secure their own carbon credits. Oh, did you not know? Under the Liberals Feed in Tariff program every single carbon credit was awarded to the IESO, and NOT to the actual land owners or investors. In the early days there was a lot of snickering at high level meetings, because there was no “Carbon Program” in Ontario, but there was going to be. I knew it and so did everybody else at these meetings. But even so, at the end of the day there doesn’t even need to be a carbon program here. Why? Because there is already a global program! What? Yeah, because most scientists know that carbon is a global problem and not a GPS coordinate problem. So anybody who does efficiency or renewable energy projects anywhere in the world (yes even in Timbuktu) can declare their own carbon savings and get it confirmed by a global carbon assessment team and they can trade it on the open market, for a heck of a lot more money than what the Liberals were going to give them. That leads many to wonder if their “$10/ton” plan was going to secure billions of tons of Carbon under the guise of a ‘tax’ and then flip them onto the open market where they sell for $20 to $40 per ton. Was that legal? Legal to buy something for somebody at one price and then turn around and sell it for a grossly inflated profit? I don’t know, ask Nestle, didn’t the Liberals allow them to secure billions of Litres of Canadian spring water for almost nothing (seriously, almost for free) and then bottle it and sell it at a 1000 percent mark-up (yes I asked if it was one-thousands percent mark-up). But let’s get back to the Ontario Energy Plan and Ford; I highly doubt a single person in Ontario cares about the Hydro One management being replaced. You say $6 million (and exaggerated salaries for poorly performed work) only amounts to pennies on the bill and won’t do anything to lower bills. But those of us who understand what’s happening aren’t even alluding that the salaries are going to save money on electricity, it’s REPLACING the leadership to get people in place who are TRYING to lower the electricity bills, not allow them to double or triple as they have in the past 10 years. In other words, if nothing changes then nothing changes. They had their chance. Don’t get me wrong, I wouldn’t have let anybody go. Why? Because when you let somebody go with a severance chances are that they become exempt from public or legal scrutiny if there is ever an investigation by forensic auditors whose job it is to find information that proves a company was NOT acting in the best interests of the clients and instead acting in the best interests of the shareholders. Ooops. Did I just say that out loud? Correct me if i’m wrong, but wouldn’t that also apply to an entire organization if it ever sold more than 10% of its shares to the public, so that now it is completely exempt from scrutiny for past management deals? I’m not saying anything was illegal, I’m not a lawyer, but as an educated member of the Ontario government Critic’s Association (that’s not a real group) I actually have information that proves 100% beyond any doubt that at least one utility company operating in Ontario knows how they can reduce electricity bills for their clients and yet chose not to do it. Why? I’m guessing it was because they decentralized energy here, and so you have mayors and local politicians and local business owners and investors who own their own LDC’s now. What’s an LDC? It’s the LOCAL distribution grid. They’re the ones who get paid all those delivery fees and have absolutely nothing at all to do with the rates. The rates are not the problem at all. It’s the Global Adjustment and Delivery costs that are hurting the businesses of Ontario and you never hear anyone talking about that. Even the media is always focused on the rates. So what’s it going to take to cut the electricity bills in Ontario? Ask me. Seriously, ask me, I can meet you in person. I completed a multi-year investigation (350,000 km of travel and possibly the most aggressive and comprehensive feasibility study for climate change solutions ever conducted) and understand the problem and solutions probably better than 99.9% of the people in Ontario. I actually installed sophisticated and sensitive electricity measuring and monitoring equipment all over the province; hospitals, senior homes, farms, apartments, commercial buildings and a wide variety of manufacturing facilities. What did I find? Conclusive proof that 100% of every property I tested can cut their electricity bills by 20% to 50% without even changing a light-bulb. How? (Nope, it’s not about dirty energy or power “quality”, it’s simply that we don’t have a smart grid and we are not properly controlling how energy is generated, how it is transformed, how it is distributed, and how it is used by a home or building. But it can be. We do NOT need a Smart Grid; we can make a Smart building using the right components, specific to how each building or business uses energy and demands power. So unfortunately there is no one single technology to solve the problem, but there is a simple method to figure out which technology or combination of technologies would work best, with the best ROI, IRR and NPV fully measured and guaranteed in advance, regardless of any increase in the rates. Got your attention? Well, since you are a distinguished writer and have connections to be able to get an article published, and you are local to where I live, I am going to try to contact you personally to see if you would sign a legally binding NDA with our lawyers and I will happily present to you a mind-bending confidential corporate presentation that shows you how we have been cutting electricity bills in half, without changing out any equipment to “Energy Star” or changing any lights to LED, or exchanging any equipment at all, not asking hard-working business owners to idle their equipment during peak demand times (a horribly myopic solution to a big problem), and it has nothing to do with batteries or solar panels or wind turbines. There is no magic solution; it’s just plain science. And if you are skeptical, which you should be, then I encourage you to contact the owners of this site to get my contact information because I will certainly be trying to contact you. People need to know this is happening. They need to know that customers can cut their bills in half, and that we have been investigating Corruption, Collusion, and complete Mis-management of electricity for virtually all types of businesses, farms, hospitals, schools, and even Community Housing. Whistle blower? Not exactly, I don’t want to get myself shot, but I am definitely whistling while I walk to the bank to cash my next cheque for helping Ontario business owners to stop over-paying for their energy. No rebates needed. No government involved at all. Just science and simple solutions and understanding HOW the bills are charged for each client, WHY they’re over-spending in any key area, and WHAT technologies are proven to lower those key areas, all without changing any equipment or behaviour. Just business as usual, while paying less for the energy we need.

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