Energy Probe

Tom Adams

June 2, 2003

Howard Hampton and the NDP’s Practical Solutions for Affordable, Reliable Hydro:

• Keep our hydro in public hands. Immediately end hydro privatization and deregulation.

Energy Probe’s commentary: Historically, public ownership has not resulted in public control. The Ontario public has much greater control over Ontario’s publicly regulated and privately owned natural gas distribution utilities.

• Create Efficiency Ontario to take the lead on money-saving, environmentally friendly, energy efficiency measures so that people can save money through using less hydro, less gas and less heating oil.

Energy Probe’s commentary: Energy Probe supports this concept.

• Guarantee by law that by the year 2010 at least 10 per cent and by the year 2020 at least 20 per cent of our electricity would be produced from renewable, environmentally friendly sources.

Energy Probe’s commentary: Approximately 25% of Ontario’s power supply is currently provided by hydro-electric supplies. Energy Probe estimates that the cost of new renewable power exceeds the cost of new low emission gas-fired cogenerated power by about 25% to 50%.

• Ensure public accountability in our public power system through a new Public Utilities Commission.

Energy Probe’s commentary: The stated purpose of this regulatory body would be to determine an appropriate price for power. In the absence of market forces, determining price through regulation is superior to the system that prevailed under the previous Ontario Hydro of self-regulation by Ontario Hydro or the system initiated by the NDP in 1994 of politically-determined prices.

• Place a moratorium on new nuclear power stations, clean our air by closing or converting Ontario’s coal-fired generating stations by 2007 and invest in clean and renewable energy generation to ensure reliable electricity at cost for Ontario consumers.

Energy Probe’s commentary: Energy Probe supports a moratorium on new nuclear power stations but notes that in a market environment, cut off from subsidies, new nuclear power would be impossible. Energy Probe supports the objective of closing all coal-fired generation but the other elements of the NDP plan do not provide a credible program for replacing the over 9,000 MW of coal capacity in Ontario. Note that Ontario’s coal plants are very important for power system reliability because they are dispatchable, meaning that they can be turned on at will and are particularly important in meeting power needs during summer and winter peaks in demand.

(June 2003)

John Spears
Toronto Star
July 8, 2003

Refurbished nuclear generators will qualify for tax breaks available to clean and green energy producers, the Ontario government has announced.

Privately owned Bruce Power and publicly owned Ontario Power Generation Inc., or OPG, were both hesitant yesterday to estimate the value of the tax breaks, which apply to facilities that aren’t yet producing power.

The tax breaks, which include a 10-year property tax holiday and sales tax rebates on materials used for clean, alternative or renewable energy sources, had been announced last November.

Yesterday, Agriculture Minister Helen Johns said some nuclear facilities will also qualify for the tax breaks. The tax breaks apply only to nuclear facilities scheduled to return to service after this year.

Bruce Power plans to return two mothballed reactors to service later this summer, and Ontario Power Generation is scheduled to return one reactor of its Pickering A station to service in August.

OPG spokesperson John Earl said the company assumes the unit due to return in August will not qualify for the tax breaks, but the other three Pickering A reactors would, if they return to service.

Bruce Power spokesperson Steve Cannon said the tax incentives would apply to two laid-up reactors at the Bruce A nuclear station.

Johns said in a news release that "anything that encourages industry to consider new generation opportunities can only be good for the people of Ontario."

Nuclear opponents disagreed.

Dave Martin of the Sierra Club of Canada said it’s "completely ridiculous" to regard nuclear power as clean. Nuclear facilities have leaked radioactive material and they produce dangerous radioactive waste and carry a risk of widespread radioactive release in the event of an accident, he said.

Norm Rubin of Energy Probe said it’s doubtful that the tax incentives announced yesterday would be enough to persuade investors to pour money into nuclear generators.

The move appears more as a political gesture, he said.

"I think there’s less here than meets the eye."

Tom Adams

July 18, 2003

Dear Friend:

Hydro-Quebec’s mismanagement has created a legacy of environmental damage, unneeded dams, and squandered resources through giveaways to metal smelters. NB Power’s public utility regulator has just declared that Crown utility to be "insolvent." Manitoba Hydro has also served its citizens ill by supplying artificially cheap power to dirty, old economy paper mills and mines.

But no power system in Canada, and possibly in the western world, is more dysfunctional than Ontario’s. Ontario taxpayers are being gouged as never before, and the skies above Toronto may soon suffer unprecedented soot levels.

Here is what the incompetence of the Ontario government has brought about:

• In a desperate attempt to avoid blackouts this summer, the Ontario government is renting diesel generators, parking them around Toronto and other parts of southern Ontario. From there, they’ll be belching out dirty, high-cost power to meet the summer demand for air-conditioning.

   

• In another attempt to meet Ontario’s summer power demands, the government is rushing the obsolete Pickering nuclear plant back into service. The government is playing with fire by risking an accident at this troubled station, which Ontario Hydro shutdown six years ago for safety reasons.

   

• While the Ontario government is producing high-cost, high-risk power and buying high-cost power from others – often at 20 cents or more per kilowatt hour – the government is reselling it to its customers at a fixed 4.3 cents per kilowatt-hour. This artificially low price discourages conservation, dramatically increasing the risk of blackouts this summer. Without the rate freeze, taxpayers wouldn’t be facing major tax hits in order to encourage wasteful power consumption.

Ontario’s power problems are entirely self-inflicted. Most of Ontario’s neighbours in the United States have a glut of much cheaper and cleaner power after they removed regulations that favoured polluting coal and nuclear plants over high-efficiency gas technologies, such as cogeneration.

Our neighbours in the U.S., like the U.K., adopted market-oriented reforms that allowed competition to work for the benefit of both the environment and the economy. Pollution from coal generators and nuclear reactors has dropped everywhere competition has been tried. Even in pro-coal Alberta, competition has switched almost all new investment away from coal to much more efficient gas-fired plants and renewable energy like wind power.

Ontario toyed with introducing competition but got cold feet. Instead of privatizing its inefficient utilities, it decided to pour billions of taxpayers’ dollars into subsidizing outdated nuclear plants. It short-circuited conservation by freezing rates at a level that encouraged wasteful consumption, passing on the cost to future generations. In short, it utterly abandoned all economic principles. And Ontarians, and the Ontario environment, are paying the price, in spades, of this unprincipled and uneconomic behaviour.

If there is one silver lining to the unfolding tragedy, it’s in the lesson to us all. We mustn’t let our politicians act as if the laws of economics don’t matter; we mustn’t let our environment be gutted through wasteful giveaways, whether subsidies to power producers or subsidized power prices.

If you agree that the Ontario government’s energy policies have been ruinous, and want to make sure that all Canadians understand why, so that we can avoid a disastrous repeat, please help us with a generous, tax-creditable donation. Sound environmental and economic policies go hand in hand. With your help, Canadians will get a cleaner environment and power that is truly lower cost. We deserve it, and so do future generations.

Yours truly,

Tom Adams
Executive Director

Let’s make sure Ontario’s bungling doesn’t reoccur, in Ontario or anywhere else in Canada! Your generous support today for our campaign for cleaner power that is truly lower cost.

A record you can be proud of

• Energy Probe was the world’s first organization to recognize – in 1980 – that the electric power business is not a natural monopoly. We then developed the successful model for breaking up electricity monopolies, which the United Kingdom adopted in 1989. As we predicted, under this model, the U.K. cancelled the construction of new nuclear plants, began to shut down existing ones, and turned to advanced clean technologies such as cogeneration and renewable energy to meet its energy needs. Power rates fell for residential, commercial and industrial users.

   

• The Energy Probe model has since become the dominant model for electricity restructurings around the world, successfully implemented in Australia, New Zealand, South America and elsewhere (California, regrettably, did not adopt the Energy Probe approach).

   

• Since Energy Probe opposed nuclear power, Canada’s nuclear industry has cancelled 70 Darlington-sized reactors that were scheduled to be running by 2000. The Darlington nuclear plant was begun in 1970. Since then, no new nuclear plants have been ordered and completed, anywhere in Canada.

   

• Energy Probe was the first environmental organization in Canada – and to our knowledge, the world – to oppose the construction of nuclear power plants. We recognized that nuclear power was uneconomic in 1974.

   

• In bringing about these accomplishments, Energy Probe was entirely funded by Canadian citizens and typically outspent by the nuclear industry, 1000 to 1. Our success in influencing our country’s policies was noted by the inaugural edition of The Canadian Encyclopedia, which added that "despite its low budget, Energy Probe is respected for its scrupulous research."

CBC News Online staff
CBC News
August 15, 2003

Thursday’s huge power failure was likely caused by a relatively minor technical problem at a generating station, but so far, it’s not clear exactly what happened.

Some investigators in the U.S. said Friday that the trouble appears to have started in northern Ohio.

A spokesperson for the North American Electric Reliability Council, an industry-sponsored monitoring group, said it would take some time to pinpoint the cause.

Meanwhile, the Ohio Public Utilities Commission said it doubted the outage started in its state.

SoftSwitching Technologies Inc, a private monitoring group in Wisconsin, said the problem started in Michigan.

Cascade failure

Experts agree that the power outage was the result of what’s called a cascade failure.

Generators can be seriously damaged if there’s nowhere for them to send the electricity they’re creating. As a result, generators shut themselves off to prevent damage when the part of the grid they’re connected to breaks down.

That in turn takes more of the grid offline, causing still more generators to shut down.

It’s the same cascade effect that caused a huge power failure that struck the Northeastern U.S. and parts of Canada on Nov. 9, 1965, leaving 30 million people in the dark.

Engineers made changes to the system after that blackout but for reasons that aren’t known, the safeguards didn’t work.

President George Bush said Friday the blackout was a "wakeup call." "The delivery systems have to be modernized," he said.

"Obviously this is not going to be done overnight." Tom Adams, the Executive Director of Energy Probe, says he expects to see a lot of changes to the power grids.

"A lot of the grids have not received substantial investments for decades now," he said. "We’ve regions of North America that haven’t built any significant new transmission in 17 or 20 years."

Aside from investing in the power transmission system – the wires that connect electricity customers – Adams says there should also be changes in the way the system is set up.

"What we’ve got is a very centralized power system where almost all of our power comes from very large generators located remote from the load," he said. "That system is inherently less stable than one where the generation is more decentralized, where the generators are smaller, so losing one small piece causes less harm."

Tom Adams

A balancing act

Meanwhile, getting the power restored will be a careful balancing act, John Dalton, managing director with Navigant Consulting in Toronto, told CBC News Online.

The hydro system – when it is up and running normally – could be compared to two 200-pound men on either end of a seesaw, he said, with one man representing demand and the other representing generation.

"The system is in perfect balance. If one of the guys were to throw off a pound or two from either end of the seesaw, you wouldn’t move that much," Dalton said.

However, when the system collapses, bringing the network back up isn’t as simple as flipping a switch.

"What happens when you’re bringing the system back up – you’re at the point where you have two five-pounders, so a one pound change there has a much more dramatic impact on the system," Dalton said. "So you have to gradually, essentially bring back the system."

Utilities in Ontario are warning it could be well into the weekend before power is restored to all customers.

News Staff
Canadian Press
August 15, 2003

The electrical power grid is like a rope linking a team of mountain climbers. On a good day, someone slips and is hauled to safety. On a terrible day, someone slips and pulls everyone off the mountain.

Thursday was a terrible day for Ontario and the northeastern United States.

The grid is a web of transmission towers, power lines and computers linking generators to distribution centres and, eventually, to that air conditioner in your window.

Jim Haynes, a vice-president of Newfoundland and Labrador Hydro, calls it the biggest machine in the world.

Norm Rubin of Energy Probe in Ontario says the grid has saved the day countless times by allowing power companies with shortages to make up their needs from others who have surpluses.

"There is safety in numbers or interconnectedness – most of the time," he said. "The grid has saved Ontario from blackouts."

The public doesn’t notice when it works. They do when it fails.

The grid is incredibly complex. Alternating current surges through the system at 60 cycles a second, all synchronized and in harmony like an orchestra.

Computers struggle to match supply with demand, while keeping power loads at safe levels. Generators are brought on line or shut down as demand peaks or ebbs.

When something goes wrong, as it did Thursday, the rope can pull the climbers off with frightening speed.

At about 4:10 p.m. EDT on Thursday, the system was humming along, with engineers preparing to bring up more power to drive rush-hour subways and meet the demands as people got home from work, turned up the air conditioning, fired up the stove and clicked on the TV.

Something, somewhere – no one has pinpointed the culprit – went wrong. A generator fell off line. A transmission line failed.

The system surged and tension built up on the rope. All the intricately balanced factors began to clash. At this point, though, the event should still have been isolated. Somehow, it wasn’t and a dreaded cascade began.

"Lines are going to fail, plants are going to fail, that happens every day," said Mr. Haynes. "It’s why did it cascade to such a big event?"

Machines began to act automatically

"All this equipment is designed to protect itself," Mr. Haynes said. "They go into, ‘I don’t care what’s happening in the outside world, I’m tripping to protect myself.’"

Along the line, circuit breakers tripped and fuses blew to take areas off the grid and protect equipment from the suddenly unstable flow. Each of these caused more ripples along the grid – one more climber falling.

Mr. Haynes described the events: "More load and then there’s an overload somewhere else, a line is tripped you get generators going out. In a matter of two or five minutes, even seconds in some systems, it’s all flat."

Technicians at generating stations – coal and gas-burners, hydro dams and nuclear plants – watched the demand levels fall as segments of the grid tripped out. They had power coming out with nowhere to go and they killed the generators. The nuke operators shut down their reactors.

Within seconds, much of the northeast U.S. and most of Ontario was down. The whole team fell off the mountain.

With the system shut down, the problem became one of getting the lights back on.

It isn’t just a matter of throwing a switch, Mr. Haynes said. Everything must be resynchronized.

He likened it to a homeowner who plugs in one appliance too many, trips a circuit-breaker and then simply resets the breaker without taking something off the line.

"By the time he’s back upstairs, the breaker’s gone again. You’ve got to take something out of the circuit. The power system’s no different."

There’s another problem. Coal- and gas-fired stations take time to get steam up and generators turning if they’ve cooled down.

Mr. Rubin said Ontario’s nuclear plants, which provide more than a third of the province’s power, take 36 hours to restart after a shutdown.

Once the power comes back, the questions begin. Is the grid obsolete? Is it the victim of stinginess? Is there new technology available that would prevent a recurrence?

Maybe, but that’s impossible to answer until the cause is traced and it will be a long post-mortem.

"There will be a lot of engineering reviews of this particular situation, how it happened and what happened," Mr. Haynes said.

"It’s not only the root cause. The root cause may have been a transmission line that failed. The question is, if that failed, that’s okay . How come everything else happened?"

News Staff
CTV News
August 15, 2003

The massive power outage that blacked out most of Ontario and several states in the northeastern United States on Thursday showed the deep interdependence of the North American power system.

The electricity grids in Canada and the U.S. link at 37 major points so that the neighbouring countries can trade significant quantities of electricity between them. The system works well when one utility has a shortage – it can then buy electricity from a neighbouring utility.

Exports represent approximately seven per cent to 10 per cent of total Canadian generation and 1.2 per cent of total U.S. consumption. U.S. imports into Canada have increased significantly over the last few years.

But it can mean disaster as well, as Thursday’s outage proved. In this case, most of the Eastern Interconnected System, which extends throughout the U.S. Northeast and into the Midwest and Canada, was shut down.

The major failure of one main power generating station – possibly in New York City, possibly elsewhere – set off the chain events. The loss of generation caused a "massive outflow of power" from the rest of New York, Connecticut, Pennsylvania, New Jersey, Michigan and Ohio within seconds.

Though the sequence of events that followed is unclear, a problem at one major power grid could have spread quickly around the eastern regional power grid if other utilities in the system were running near capacity.

"In the blink of an eye, all of the region’s power plants responded by trying to put more power on the grid than the transmission lines could support, causing them to overload," Phillip Harris, president and chief executive of PJM Interconnection, the Mid-Atlantic power grid operator, said.

Hydro One spokesman Al Manchee says there was nothing wrong with Ontario system before Thursday’s outage, suggesting the problem came from south of the border. Warm, muggy weather and high air conditioning demand were also likely contributors to the outage, overloading the transmission lines.

Air conditioning alone accounts for up to one-third of all electricity demand on hot days.

Norm Rubin, a policy analyst with Energy Probe, says that even if the problem didn’t start in Ontario, there are still a number of changes that need to be made in Ontario’s electricity distribution system.

"The urgent priority is to generate power at a reasonable price," Rubin told CTV Newsnet. "We have an environment that has scared all prospective suppliers away. They know that they have to be in bed with Ontario Power Generation."

Rubin also finds fault with the Ontario government’s decision to freeze hydro rates.

"One of the problems is the rate freeze on hydro prices that’s in place no matter how strained the system is. It’s a free-for-all for consumers. So it’s not surprising that demand outstrips supply."

One of the worst power outages to hit North America was on Nov. 9, 1965, when the power went out just as ruch hour began. The lights stayed off in many areas, including Manhattan, for up to 13 hours, affecting some 30 million people on both sides of the border.

The blackout was blamed on the failure of a power relay at a power station in Niagara Falls.

Closer to home, few will forget the Ice Storm of 1998. Freezing rain in western Quebec and eastern Ontario knocked out hydro lines. Some areas were without power for more than a month.

Former U.S. Energy Secretary Bill Richardson says outages like the one on Thursday are caused because the U.S.’s power grid is antiquated.

"We’re the world’s greatest superpower, but we have a Third World electricity grid,” said Richardson, governor of New Mexico.

Tom Adams
National Post
August 16, 2003

Ontario NDP leader Howard Hampton might be forgiven for failing to grasp the scope of Ontario Hydro’s woes. But not for ignoring his party’s role in them.

Creating a sustainable, efficient power system is a challenge. As Thursday’s blackout starkly shows, Ontario has failed to meet that challenge. One reason for the province’s decades of failure is widespread ignorance of the history of the power industry in Ontario, an ignorance perfected by Ontario’s NDP leader Howard Hampton in his recent book, Public Power: The Fight for Publicly Owned Electricity.

In describing the early history of the Ontario Hydro-Electric Commission of Ontario, Hampton follows closely the official version published by Ontario Hydro. Sir Adam Beck is the main character, energetically synthesizing political and electrical power. From 1903 until his death in 1925, Beck built and deployed a political movement of municipal and industrial leaders to back his ambition for an expansionist industrial monopoly, free from competition or effective external oversight.

Hampton lionizes Beck, but Hampton’s prescription for Ontario’s electricity future would, paradoxically, have horrified him. In Hampton’s vision, an elected politician controls the power system. Beck recognized that politicians are not elected for their administrative competence and are prone to promoting inefficient pet projects designed to achieve political objectives. He said, on his deathbed, "I had hoped to live to forge a band of iron around the Hydro to prevent its destruction by the politicians."

Hampton’s retelling is a victor’s history. Beck’s opponents are caricatured two-dimensionally as greedy capitalists. As in Ontario Hydro’s vanity history, Hampton ignores Beck’s greatest intellectual challenger.

During the First World War and through the 1920s, James Mavor, Canada’s first academic economist and a University of Toronto political economy professor, decried the creation of Beck’s monopoly in the Financial Post and elsewhere. As Mavor explained, Ontario Hydro’s early success came from the confiscation of property from private companies then trying to establish electricity utilities and competitive generators. Mavor argued that competition between the private generators would reduce the cost of power while maintaining the fees and taxes government at that time received from the private enterprises.

Mavor catalogued the flaws that would eventually kill Hydro. Presaging Ontario Hydro’s failure to set aside funds for nuclear waste disposal and decommissioning, Mavor warned of the incentives against keeping proper accounts. "Even when they do nominally set aside depreciation and reserve funds, they frequently, as in the case of the Hydro-Electric, employ these funds for the extension of the system or otherwise, instead of using them as such funds ought invariably to be used." Mavor accurately warned that taxpayers would eventually be held to account for the excesses of public power.

Mavor’s prescience demonstrates that Ontario Hydro’s later insolvency was not an accident, but resulted from fundamental flaws. Mavor’s warned, "Nothing is more usual in public enterprises of this kind than to disregard the element of risk." He also warned about, "the tendency to fix the price arbitrarily at such a rate as to induce the public to believe that the service is being rendered cheaply, rather than a rate determined by the technical conditions of the enterprise." Ontario’s experiences with nuclear power and long-term power purchase contracts demonstrate how right Mavor was about investment risk. Ontario’s history of electricity rate freezes – an NDP innovation now adopted by the Ontario Tories – confirms Mavor’s insight on the tendency for underpricing.

Hampton’s arguments betray an ignorance of economics, as seen in his account of the United Kingdom’s experience with privatization. To his credit, he acknowledges that U.K. electricity prices declined after privatization and the introduction of competition. But Hampton decries the investments the privatized companies made in foreign countries, to which they were able to transfer their great success. The basis for his complaint? Hampton claims the investments were made on the backs of U.K. customers, notwithstanding their lower rates and improved service.

Hampton theorizes that a private transmission utility would always have an incentive to skimp on maintenance, whereas a public transmission utility would always make more sound long-term investments. Unlike the experience in the U.K., where reliability in various industries soared after privatization, Ontario’s experience with utility systems of all kinds reveals the opposite pattern. Ontario’s privately owned but publicly regulated natural-gas utilities have exceptional transmission and distribution assets. On the other hand, Ontario’s publicly owned sewage and water utilities provide an example of mismanaged, underpriced publicly controlled utility service. So, too, with the publicly owned power grid. For example, a significant portion of the Crown-owned Hydro One’s transmission system, particularly around Hamilton and regions of northern Ontario, was built before 1940 and struggles in primitive condition. This neglect over many decades – Ontario Hydro starved its transmission system of needed investments to finance nuclear generators – has long presented a key reliability risk and may be a contributing factor in the recent power disruptions. Private investors tend to protect their assets, whereas politicians tend to protect their short-term popularity.

Hampton also theorizes that increased private ownership would make the power system resistant to technological and environmental advancement. The facts demonstrate otherwise. The most rapid technological redirection and environmental improvements ever achieved by a modern society’s power system were achieved in the U.K. after privatization and the introduction of competition in 1989.

The governance and business problems that led to Ontario Hydro’s self-declared financial insolvency in October, 1997, do not figure in Mr. Hampton’s retelling of the utility’s modern history. Hampton believes Ontario Hydro was regulated, although it was in fact the only Canadian utility with legal self-regulating powers. The only "political oversight" that ever had any effect came from sporadic interventions – such as rate freezes from panicky politicians.

Hampton maintains the claim that Ontario enjoyed "power at cost." Yet Ontario Hydro became insolvent because its debts were understated, because the funds collected to pay for nuclear waste were squandered and because its assets were overvalued. Although the utility had never declared an operating loss, although it was shielded from taxes and real interest costs by subsidies, upon Hydro’s dissolution in 1999 it was revealed to be bankrupt. The officially estimated net loss on all of its investments was $19.4-billion.

Many Ontarians and almost all Ontario politicians failed to grasp the scope of Ontario Hydro’s financial collapse, so Mr. Hampton might also be forgiven for not getting it. The systematic amnesia that afflicts Mr. Hampton’s retelling of his own party’s role in causing the collapse is less forgivable.

The NDP was largely responsible for Ontario Hydro’s decision to sell power below cost. For example, in 1976, former NDP leader Donald

C. Macdonald chaired a legislative committee that ordered Ontario Hydro to roll back its proposed rate increase by a drastic 8%. This turning point in Ontario Hydro’s history led to an explosion of debt and a lasting politicization of ratemaking.

Hampton blames all of Ontario Hydro’s nuclear mistakes on the Conservatives and Liberals. The truth lies elsewhere. In 1985, the Liberals and NDP – both of whom had promised to cancel the Darlington nuclear megaproject – formed a minority government. Through creative accounting, Ontario Hydro duped them into believing Darlington was 70% complete (rather than the actual figure of about 25%). If Hampton’s theory that public ownership equals public control were sound, the massively unpopular Darlington project would not have been completed.

Under NDP leadership from 1990 to 1995, Mr. Hampton claims Ontario Hydro "was working." The book highlights the NDP’s record of cutting Ontario Hydro’s operating budget by $600-million, claiming the NDP turned around Ontario Hydro’s finances and operations. In fact, those cuts occurred while compromising safety. Two years after the NDP’s electoral defeat, Ontario Hydro revealed that, partly because of many years of underfunding, a third of its remaining nuclear reactors had to be closed. One of the stations to close, Pickering A, had failed to upgrade safety systems despite being repeatedly directed to do so by the federal nuclear safety regulator. Hampton acknowledges no relationship between the NDP cutbacks and the safety and operational problems that finally felled Ontario Hydro.

After Hydro disclosed its nuclear problems in 1997, Hampton’s own caucus colleagues viewed the utility without his nostalgic, rose-coloured glasses. In a minority report to a legislative committee studying the nuclear problems, the NDP members responded to the Tory’s newly released plan to dismantle Ontario Hydro, stating "We support changes to the way Ontario’s electricity market is structured."

Ontario’s power system faces colossal challenges if it is to become an efficient and reliable jurisdiction for power production. As Hydro’s true history shows, public ownership is antithetical to both.

Tom Adams, a former director of the Ontario government’s Independent Market Operator, is executive director of Energy Probe, a Toronto-based think tank. E-mail: TomAdams@nextcity.com.

Kieron Lang
CTV News
August 16, 2003

A nine-second event that triggered a cascading power outage Thursday demonstrated the vulnerability of the Eastern Interconnect electrical grid. It’s an integrated system that supplies power to Ontario and the northeastern United States.

The grid is the catch-all phrase for the transmission towers, power lines and computers that link generators to distribution centres and, eventually, to your desk lamp.

Since electricity can’t be stored, it’s generated as needed. When one area has a shortage, it can make up the balance with supplies from others with surplus energy. Power is shifted through a system of substations, regional distribution centres and trunks that shunt the power to customers.

"There is safety in numbers or interconnectedness – most of the time," Energy Probe’s Norm Rubin told The Canadian Press. "The grid has saved Ontario from blackouts."

But when some element in the system fails, that interconnectedness can amount to its downfall.

At about 4:10 p.m. EST Thursday, the Eastern Interconnect was humming along as usual.

Click here to see a full map of the North American power grid

Then something, somewhere – the root cause of the outages remains unconfirmed, but is now believed to have been a blown transmission line near Cleveland, Ohio – went wrong.

As a result, the system surged – causing machines along the line to react automatically.

Circuit breakers tripped and fuses blew, taking equipment off the grid to protect it from the suddenly unstable flow of electricity.

As segments of the grid dropped off, the level of demand fell, forcing producers with nowhere to store their electricity to also shut down.

It took about nine seconds – more than 100 power plants, including 21 nuclear reactors operating in the U.S. and Canada, automatically went offline.

The consequences were felt by up to 50 million people in Ontario and seven U.S. states, who were suddenly without power.

Then, with the system shut down, the problem became one of turning the lights back on. Unlike flicking on a light at home, the system has to be synchronized before generators can be brought back online.

Even if it was as simple as throwing a switch, the effect wouldn’t be instant. Coal and gas-fired stations, for example, take time to build up enough steam to power generators once they’ve cooled down.

And nuclear plants – which provide 40 per cent of Ontario’s electricity – can take up to 48 hours to restart after a shutdown, as they go through the process of heating up and reconnecting to the electricity grid.

So, efforts to restore full power – further complicated by difficult task of balancing load, or supply and demand – meant continuing rolling blackouts to prevent larger outages.

Provinces distance themselves from Ontario

In the wake of the blackouts, power companies and politicians from other parts of Canada were quick to point out the differences that kept their systems running while Ontario’s failed.

Alberta and British Columbia are part of the Western Interconnect, which allows Canadian power to flow down into Washington State and along the coast to California – along one cross-border transmission line.

Because power is moving down a single line, it’s relatively easy to cut the Canadian system off from the U.S. when needed. In that way, the two westernmost provinces can operate as islands unto themselves – a situation that already occurred twice in 1996 when blackouts affected many western states, but largely bypassed B.C.

In Ontario, the network is far more intertwined with that of the U.S.

Another advantage that B.C. shares with Quebec is the fact most power comes from hydro-electric generation. Built around running water, rather than heat, those systems can be returned to operation in an hour.

Also, because much of Quebec’s power is generated in the province’s north, it is not synchronized with major transmission lines in the rest of North America.

In New Brunswick, power was preserved by the breakers designed to trip when faced with a power surge. A 700 megawatt surge bore down on the province from Maine on Thursday. Within 25 seconds, New Brunswick’s generators had been sealed off.

Eves faces accusations

Ontario Premier Ernie Eves could not explain why his province did not have better safeguards in place. Major changes had been proposed after a similar blackout more than 30 years ago, involving Ontario and northeastern U.S. states.

"Following (the blackout of) 1965, it’s my understanding that those in charge did take such steps (to protect Ontario’s grid)," Eves said.

But Tom Adams of the group Energy Probe told CTV News he’s not convinced.

"Ontario has many vulnerabilities in its power systems. We’ve got a power system that’s got a host of problems," Adams said, echoing a comment U.S. President George Bush made the day before.

"We’ve got an antiquated system," Bush said, adding that the outage is a signal the American power grid needs to be modernized.

Ontario’s Conservative government has been criticized for years for being more interested in privatizing electricity than in ensuring the province would have enough energy.

"The blackout demonstrates the public power system Ontarians have built together over the last 100 years is more essential today than ever," NDP Leader Howard Hampton said Friday.

The Tory government opened the market to competition in May 2002, but Eves backtracked six months later. Soaring consumer bills prompted him to freeze retail rates at 4.3 cents a kilowatt an hour.

Critics have said that the artificially low price removed any incentive for people to conserve electricity usage.

At the peak of the power shutdown Thursday nearly 62,000 megawatts of electricity flowing to customers was lost, making the event the largest in North American history.

John Spears
Toronto Star
August 16, 2003

Ontario’s electricity system has been studied, analyzed, reformed, tweaked and overhauled for a decade.

Somehow, we’ve still ended up with the biggest blackout in the province’s history.

While no one is happy with the massive blackout, even critics of the province’s power policies acknowledge that it may not be too surprising for a system as complex as the power grid to fail once every 40 years – the last major catastrophe was in 1965.

And while the latest blackout was evidently triggered by failures in the U.S. which cascaded into Canada, the wires that imported the current problems are the same wires that brought electricity into Ontario and kept the province’s lights on last summer and winter when the province was short of electricity.

U.S. officials still haven’t pinpointed the initial failure that started the domino effect all over northeastern North America, affecting 50 million people.

But Bruce Campbell of the Independent Electricity Market Operator (IMO), which runs Ontario’s power system, says the failure created what engineers call a "sink."

The initial breakdown, which may have been in Ohio, suddenly left a large area of big power users without power, but still trying to draw electricity over the wires.

"When that happens, it just sucks power from anywhere it can," Campbell said. "It’s like a tidal wave in reverse."

As vast amounts of power try to surge through the system they overload circuits, which fail in their turn, creating an even bigger "sink" that destabilizes the system even further.

And it all happens in seconds – less than 10 seconds, according to Michehl Gent of the Northeastern Electric Reliability Council, which oversees power flows in the northeastern quadrant of the continent

Why isn’t there some sort of mechanism in place to isolate major problems before they expand exponentially?

That’s the question no one could answer yesterday. And since a similar event happened in 1965, blacking out eastern North America, questions will be asked as to why safeguards put in place following that failure somehow failed to prevent this one.

One complicating factor this time, which wasn’t present in 1965, is the huge reliance on nuclear generators, which now supply close to 40 per cent of Ontario’s power, and large proportions of power in the U.S.

Nuclear generators are not nimble operators.

When the power system collapsed, the nuclear generators had nowhere to send their power. Massive circuit breakers disconnected them from the power grid with a bang audible for kilometres. Steam used to drive now-idle turbines had to be released in clouds.

But the nuclear reaction continued to the heart of the plants, producing heat with no outlet.

Throttling back the reaction in a nuclear plant is not easy, and strict safety rules must be followed. Bruce Power managed to ease back three of their four reactors to about half-power, releasing the heat produced into Lake Huron’s cooling waters.

But at Pickering and Darlington, the process wasn’t as smooth. Operators were forced to completely shut down all Pickering’s reactors, and three of four at Darlington, to prevent overheating. While one Darlington reactor was back up yesterday, Pickering remained out.

It will likely be the middle of next week before all the nuclear units are back in service.

Losing the units underlines the power shortage in Ontario.

Little more than a year ago, in June, 2002, then-energy minister Chris Stockwell assured Ontarians: "We have an adequate supply of power."

Yesterday, with the nukes out and the system hampered as it struggled to re-establish itself, the province was short thousands of megawatts of power, which meant the IMO had to ration the pain through rolling blackouts.

In the U.S., Gent, who heads the North American Electric Reliability Council, faced the music. "I am personally embarrassed and upset that this happened," he said. "My job is to see that this doesn’t happen, and you can say I’ve failed at my job."

Ontario residents might be as puzzled as Gent as to what went wrong, after all the brainpower that’s been put to work on the system.

It was almost 10 years ago, with the old Ontario Hydro drowning in red ink, that the province brought in Maurice Strong to start overhauling the system.

A panel led by Donald Macdonald was subsequently set up to draft a plan for a new system, and it duly recommended, in 1996, a market-based electricity system.

Mike Harris’ Tories began the work of privatizing and pushing the system toward more market-based systems in 1998. A power market opened in 2002, only to have Premier Ernie Eves slam the brakes on power reform last November.

In the meantime, Ontario’s power system had become increasingly interwoven with that of neighbours such as New York, Michigan and Quebec – a trend that’s evolved since1965.

Why couldn’t all this effort, all this thought, design a system that wouldn’t suffer a disastrous breakdown?

No one has answers yet, since no one’s exactly sure what triggered the failure, but most observers were refraining from finger-pointing.

"It’s unrealistic to expect perfection," said Tom Adams of Energy Probe in an interview.

A more puzzling question is why fail-safe mechanisms aren’t built in to stop big failures from growing into catastrophic ones, Adams said.

Some jurisdictions did escape the worst of the damage. New England’s power system operator, for example, was able to isolate its area from the cascading failure more effectively than most, sparing thousands of customers from blackouts. Were they luckier, or smarter than other system operators? No one knows, yet.

But some experts were cautioning that isolation isn’t necessarily the best solution. Ontario was importing close to 15 per cent of its power last summer and winter because it didn’t have enough of its own, points out Adams. "The suggestion that we disconnect our power system from our neighbours’ would have brought us to blackout sooner," he said.

Jan Carr, an industry consultant, noted that failures can occur as easily in small, isolated power systems as they can in a big, interconnected one. The interconnected systems can draw on their neighbours in tough times; the flipside is occasionally they all go down together.

Carr points out that Quebec is a largely self-contained system, with enormous supplies of its own. But when the ice storm wreaked havoc on its power system, Quebec found it could have used more interconnections with neighbours.

Ontario’s electricity system has been studied, analyzed, reformed, tweaked and overhauled for a decade.

Dana Flavelle and Madhavi Acharya-Tom Yew
Toronto Star
August 16, 2003

Inability to store electricity part of complex challenge Rolling blackouts likely to persist over weekend

When electrical power fails as it did Thursday afternoon across a large swath of Ontario and the northeastern United States, it can take days to restore and large cities, like Toronto, are usually among the last to regain service.

"We’re now expecting it to take until Monday (to get power fully restored in the city)," said Karen Evans, a spokesperson for Toronto Hydro, the local utility that supplies 655,000 customers in Canada’s largest and most demanding power market.

By late yesterday afternoon, the city had regained between 80 and 90 per cent of normal service, but isolated pockets remained in the dark, and rolling blackouts meant some areas that had electricity lost it for up to two hours.

The city began receiving limited emergency supplies of electricity on Thursday night around 10 p.m. for use by essential services such as hospitals, police, fire and ambulance stations, and water treatment plants, she said.

Homes and businesses connected to lines serving essential services also got service just because they happened to be on the route, Evans said.

But service was fleeting in cases as some areas that initially got power later lost it, she said.

"As people woke up (yesterday) morning and started turning on their lights, more power was demanded. We couldn’t meet the demand so we had outages," said Evans.

In other cases, Toronto was forced to give up supply to meet demand in other parts of the province, another Toronto Hydro spokesperson, Blair Peberdy, explained late yesterday.

Rolling blackouts, as they’re called, are expected to persist over the weekend as the Independent Electricity Market Operator, which manages the grid across the province, continues to adjust the supply to meet demand. The blackouts shouldn’t last more than about two hours, Peberdy said.

Areas considered essential are less likely to get hit, Peberdy said. They include hospitals and other emergency services such as fire, police and ambulance stations, followed by critical municipal services, such as water pumping stations, then the Toronto Transit Commission, and finally major office towers and shopping centres. Downtown is given priority.

But Toronto Hydro is just one piece of the puzzle. When it comes to restoring power, a huge part of the challenge comes from the nature of electricity itself, experts said.

Think of electricity as a commodity that is manufactured, much like steel or lumber. But unlike other commodities, electricity can’t be stored. It’s produced at the very instant when it’s needed. The lines that transmit power across the province serve as a dedicated point-to-point delivery system. Demand, or load, must be perfectly balanced with supply, or generation, or there’s trouble — quick.

Most electrical systems operate on alternating current, which must be maintained at a constant speed of 60 Hertz, or 60 cycles per second. If demand exceeds supply it’s like flushing a toilet while taking a shower — the flow of electricity slows. If supply exceeds demand, the flow speeds up.

Few electrical appliances can tolerate even small variations, leading to fried computers, fridges and power generating equipment. That’s why most transmission systems are designed to protect electrical equipment by disconnecting generators from the grid when demand and supply get too far apart, said Tom Adams, executive director of Energy Probe.

"If they don’t, there will be damage to the system and they won’t be able to bring it back even in 24 or 36 hours," said David Drinkwater, energy consultant and former chief economist at Ontario Hydro.

In fact, an imbalance in the system is what caused Thursday night’s blackout in the first place, experts agree, though no one can agree on where or how the upset began. All that’s certain is that once the problem started it "cascaded" through the vast interconnected transmission systems that serve most of Ontario and the northeastern U.S., knocking out service to some 50 million people.

Once a massive failure has occurred, getting power back up from a "black start" is a tricky business, experts said.

First, Ontario has to be isolated from the other states and provinces that share the northeastern grid. Then specific communities are isolated from the rest of the province because power must be restored gradually to keep supply and demand in balance.

It starts with the handful of generating plants that have their own backup power. The rest join the grid after power begins humming along the transmission lines. The last to come on line are the nuclear generating stations since restarting them is a technologically trickier process. Ontario’s nuclear stations account for up to 25 per cent of the province’s supply

Initially, power is added in very small increments, as little as 10 megawatts every 10 minutes, a pace Adams called "glacial" for a system that was running 24,000 megawatts when it shut down.

As supply is increased, it must be matched by demand. At first, that might mean a single row of streetlights is added, then a neighbourhood, then a small community. There’s little room for error and lots of potential for setbacks, experts said.

"I would compare it to being parked beside the 401 and having to go from a dead stop to full highway speed. You’ve got very little tolerance depending on whose fenders you want to bounce off," said Drinkwater.

Toronto is one of the last to get service because it is so large, said Toronto Hydro’s Evans.

"We don’t have priority because of the balancing issues. When you only have so much power available, you tend to target the areas of lower demand because excess demand is what causes failure," Evans said.

The supply of electricity in Ontario involves a number of players, including Ontario Power Generation, which runs most of the generating plants, and Hydro One, which operates most of the transmission lines that run between cities.

Overseeing it all is the Independent Electricity Market Operator, commonly called the IMO, which acts like a broker or middleman. It doesn’t own any facilities but is responsible for matching supply with demand.

The non-profit organization decides when and how much power each part of the province, including Toronto, will receive. In an emergency, supply is distributed based on need, said Toronto Hydro’s Evans. Carefully worked-out protocols determine who’s first in line, Evans said. The IMO has so far refused to make this information public.

However, when Toronto Hydro officials realized Thursday night that the city was too far down the priority list to maintain its essential services, it appealed to the IMO for help.

"The IMO recognized we have essential services in the city, so we got power earlier than we expected," Evans said.