Canadian Press
July 21, 2005

Toronto: The agency monitoring Ontario’s power system has lifted its advisory asking residents to drastically cut back their power usage, but Energy Minister Dwight Duncan warned Thursday there will be a few more summers of tight power supply.

A slight break in the sweltering heat combined with a return to service of two power generating units allowed the Independent Electricity System Operator to lift its plea for residents to turn up the air conditioner thermostat and wait until after 10 p.m. to use major appliances.

The agency, though, continued telling residents not to waste power and stressed that an advisory could be issued again if the power supply faces a strain.

It will be years before there are enough new electricity producers to comfortably meet demand, said Mr. Duncan.

Ontarians are going to have a couple more summers like this because, unfortunately, the previous governments refused to deal with the reality, he said, criticizing the former Tory government for not expanding generating capacity.

I don’t ever want the people of Ontario to be exposed to this kind of situation again. That’s why we’ve announced more than 9,000 megawatts of new projects, he said before entering a cabinet meeting.

It will take a minimum of three years to bring some of these on, Mr. Duncan explained, adding that construction will begin soon on several wind power farms and a few small projects will be on-line within months.

Conservative critic Tim Hudak countered that in two years since coming to power, the Liberal government has yet to see an actual spade break ground on a new energy facility.

Instead, the government has turned to imports to meet electricity demand, has pleaded with people to cut back, yet is still planning to close its remaining four coal plants which produce about 20 per cent of the province’s power by 2009, he said.

That was nothing but a political promise to win votes that was not thought through, it’s bad economic policy, it’s bad hydro policy, Mr. Hudak said.

The power crunch is resulting in skyrocketing prices for industry, which pay the market price, and a rising bill for residential consumers, said New Democrat Leader Howard Hampton.

Tom Adams with Energy Probe stated: We should expect significantly higher electricity prices in the future than we have in the past.

Hampton said the government has fallen flat on conservation and should help people reduce power usage and save money with low-interest loans so they can buy energy efficient appliances, such as refrigerators.

The government’s policy of asking people to sweat in the dark is not sustainable, Mr. Hampton said.

Mr. Duncan, though, dismissed warnings that consumers will face higher prices next May as a result of the summer heat wave that’s pushed demand to all-time highs and caused market power prices to spike.

Four months into the year, you can’t predict that prices will go up, Mr. Duncan said, since the weather could be milder for the rest of the year.

The Ontario Energy Board reviews rates and could change them starting next May, then every six months after that.

However, the average price so far for July is about eight cents per kilowatt hour higher than the fixed rates paid by residential consumers. At one point Wednesday the rate hit 53 cents per kilowatt hour.

Currently, consumers pay five cents per kilowatt hour for the first 750 kilowatt hours they use each month, and 5.8 cents for anything more.

From April to the end of June, the cumulative difference between what consumers paid and what generators were paid on the open market was $42.1 million and those costs will have to be covered by consumers.

With spot prices so high, we’re adding to that $42 million at a furious pace, Adams said.

Once that account reaches $160 million, it can trigger a price change and at this rate that could happen before next May, Adams said.

That figure at the end of next April will be factored into next year’s prices, along with forecasts and other factors, said a spokeswoman at the Ontario Energy Board.