Energy Probe

Charles Wyatt
Business Edge, Vol. 1, No. 11
June 29, 2005

Ontario is late in harvesting the wind. With only 14 megawatts of wind-generated electricity in operation, Ontario lags well behind several Canadian provinces, as well as the United States and Germany. In 2004, Germany led the wind world with 16,629 megawatts of wind-generated electric power, or 35 per cent of total production. The U.S. produced 6,700 megawatts, while in Canada, the leading provinces, Alberta and Quebec, produced 275 megawatts and 113 megawatts, respectively, according to the Global Wind Energy Council and the Canadian Wind Energy Association.Quebec is Canada‘s largest power producer from all sources, with total production of about 37,600 megawatts, while Alberta‘s total installed capacity is about 10,800 megawatts, says the Canadian Electricity Association. Two more Canadian wind farms – a 68-megawatt facility in Alberta and a 31-megawatt operation in Nova Scotia, which together can produce enough electricity for more than 42,000 homes – opened in May. Ontario is beginning to turn its winds into energy, however. About $600 million in private investment is now targeted on installing wind-power plants that will add more than 350 megawatts of electrical power to the province’s 30,000-megawatt generation capacity. More wind-power projects are expected this year, says the Ontario Ministry of Energy (OME). The OME approved construction last November of wind farms in five Ontario locations. Wind power from these projects is expected to start to flow in early 2006, eventually producing enough electricity to power 75,000 homes. Wind energy is the fastest-growing source of electricity in the world, increasing more than 30 per cent over the past five years, the Global Wind Energy Council says. In 2004, there were more than 47,000 megawatts of wind power installed around the world, although Canada accounted for only 444 megawatts of that total. "Being a late entry isn’t necessarily a bad thing," says Tom Adams, executive director of the consumer advocacy group Energy Probe. "Lots of people wasted a lot of capital developing systems." The Ontario government is pushing wind-power generation to help replace more than 7,500 megawatts of electricity generation that will be lost in 2007 when the province’s coal-fired generation plants are shut down. The governing Liberals have been promising since they were in opposition that they would shut down the plants, which produce about 25 per cent of Ontario‘s electricity, in order to reduce air pollution and improve the health of Ontarians. In April, the OME asked for proposals for another 1,000 megawatts of renewable energy. The approved proposals will be announced in the fall. About 85 per cent of the renewable-energy projects approved in November 2004 were wind-power generation. Although wind power is environmentally friendly, it has faced opposition from people who live in the area of wind farms for a variety of reasons, including noise and visuals. Adams also says Germany has not been able to achieve its expected energy output despite its multibillion-dollar investment. "They built in low-wind areas and they are producing only 15 per cent of the rated capacity." Quebec, Canada‘s second-largest wind-power province, also failed to reach its expected power-generation levels, and early installations yielded 18 per cent instead of the expected 30 per cent. Adams says the world’s most productive wind-power stations reach 45 per cent of their rated capacity. He believes, however, that Ontario will avoid the problems that occurred with the first rush into wind-power generation, because its windmills will be sited in the province’s windiest locations. Some of the best wind areas are near Lake Huron, Lake Erie, Kingston and the Islands, Sault Ste. Marie and James Bay. The Ontario sites are expected to produce in the area of 30-per-cent rated capacity, Adams says. The Kingsbridge Wind Power Project, under construction by Edmonton-based Epcor Utilities Inc., is a 39.6-megawatt wind farm near Goderich on Lake Huron. The project, which will produce enough electricity to supply 8,600 homes, is scheduled to begin producing electricity for the power grid by mid 2006. Kingsbridge is Epcor’s first win
d-power project. Paul McMillan, Epcor’s Ontario senior vice-president, says the wind development process in this province "allows us to earn a competitive but reasonable rate of return." In April, Epcor agreed to buy Port Albert Wind Farms Ltd., which will give it the right to develop more than 270 megawatts of additional wind power near the Kingsbridge project. Epcor expects to submit proposals for additional wind-power projects in response to the Ontario government’s request for an additional 1,000 megawatts of renewable power, McMillan says. Under the federal government’s wind-power production incentive, companies installing wind-power generation can receive a subsidy of one cent per kilowatt of production capacity. In the recent budget, the government increased its wind-power production target to 4,000 megawatts from 1,000 megawatts. Superior Wind Energy Inc., a subsidiary of Brascan Corp., is developing two wind-power projects. A 100-megawatt wind farm near Sault Ste. Marie is expected to begin producing power in 2006. A second 50-megawatt wind farm near Collingwood is expected to produce electricity in 2007. As well, Toronto‘s Aim PowerGen Corp. is developing the 99-megawatt Erie Shore Wind Farm on the north shore of Lake Erie. The site also is expected to begin commercial operation in early 2006. Adams says Energy Probe supports Ontario‘s expansion into wind-power generation because consumers will not be financially responsible if the wind plants do not produce power. Many of the first wind-power companies went bankrupt, leaving consumers with the debt and no power. Adams says this is less likely to happen in Ontario because the companies developing the wind power are financially strong companies such as Brascan and Epcor. "The Ontario government is saying we will buy your wind power, pay you eight cents a kilowatt hour, and if you do not deliver that’s your problem," Adams says. "Other jurisdictions have put the consumer on the hook if there is a failure to deliver." "The operational risk is on investors, which is where it should be," he says. Under the Ontario government’s proposal, suppliers using renewable energy will receive 7.97 cents per kilowatt hour of electricity, according to the Ontario Ministry of Energy. Even if the new wind plants are financially successful and produce electricity at a reasonable cost, it is unlikely they will be able to replace coal-fired generation. While wind is clean and free, Adams says, it is also "intermittent, it comes and goes, depending on nature." "Some Alberta wind-power plants are producing cheaper power than gas plants," Adams says, but adds that the province has a "terrible wind-coincidence factor." "The wind isn’t available when the electricity demand is highest," he says. "Wind plants produce power out of phase. "Coal plants are on the other end of the telephone," Adams says. "You call up and say you want to increase power by 100 megawatts for two o’clock in the afternoon and you get it. The wind is called by nature."

Joe Schneider
Bloomberg.com
June 15, 2005

Ontario Premier Dalton McGuinty pushed back plans to close the last of the province’s coal-fired power plants until 2009, breaking a campaign pledge that helped get him elected two years ago.

Keeping the Nanticoke plant running two years longer than promised is necessary to ensure the province doesn’t run out of power while it develops alternative energy sources, Energy Minister Dwight Duncan said today at a Toronto news conference.

"Maintaining reliability is the first principle of our plan," he said.

The delay marks another broken promise for McGuinty, 49, who failed to honor vows made during the 2003 election campaign to balance the budget and keep taxes in check. Coal-fired plants produce about a quarter of the electricity consumed each day in Ontario, Canada’s most populous province.

The Nanticoke station, located near Toronto, can produce as much as 3,920 megawatts of electricity, or enough to power 3.1 million average homes. Demand during normal weather in July and August demand is forecast to peak at 24,500 megawatts and at 26,143 megawatts on hotter-than-usual days, the Independent Electricity System Operator has forecast.

The province probably won’t even meet the new deadline, said Tom Adams, executive director of Energy Probe, a Toronto researcher that advocates energy conservation. Aging nuclear power plants will have to be taken out of service for refurbishment and the province will need the energy from the coal-fired plant to meet demand, he said. Nuclear plants account for about a third of capacity.

Other Generators

The government also said today that it plans to replace two generators at the 310-megawatt Thunder Bay coal-fired plant with natural gas in 2007. The Atikokan coal-fired station, which can generate 215 megawatts, will close in 2007. Both plants are in northwestern Ontario. The Lambton generating station, south of Sarnia, Ontario, will also close in 2007, Duncan said. The plant can generate 1,975 megawatts.

Ontario plants can produce as much as 29,663 megawatts, which includes 6,416 megawatts from four coal-fired plants.

Duncan also ordered the government-run Ontario Power Authority to start talks with power producers about purchasing additional electricity to replace the energy from the coal-fired plants.

TransAlta Corp., the country’s biggest publicly owned power generator, said today that it’s interested in selling electricity from its gas-fired plant near Sarnia, Ontario.

The two-year-old C$490 million, plant produces about 216 megawatts of electricity, less than half its 575-megawatt capacity. TransAlta sells energy from the plant to industrial plants in the region.

April Lindgren
National Post
June 25, 2005

Toronto: Ontario’s electricity manager issued an emergency appeal to the public last night to reduce power consumption as high temperatures and a reduced energy supply created the prospect of rotating blackouts.

Officials said the need to reduce power consumption was particularly acute in the Toronto area, and with the weather not expected to cool in the next few days, residents are being asked to turn off non-essential lights and use energy-consuming appliances such as air conditioners and dishwashers only in off-peak hours.

Temperatures at 6 p.m. last night were 34C with humidity that made it feel like 43C. Adding to the strain on the province’s energy supply was strike action by Hydro One workers who forced six units at the giant Nanticoke coal-fired generating station out of service.

The Independent Electricity System Operator warned that further emergency-control actions – including blackouts that could come without advance notice – may be necessary if the last of two of Nanticoke’s eight units are also forced out of service.

"Any further reduction in transmission or generation availability or any increase in demand could create shortfalls of electricity," an IESO release said.

"If all sources of supply are exhausted, the IESO will take protective actions such as a system voltage reduction, or rotating cuts to supply. In these circumstances, no additional public notice may be possible."

The agency warned that the need to reduce electricity use was particularly urgent in the Greater Toronto Area "due to high loads on transmission lines in the Niagara Region and southwestern Ontario." Consumers were urged to turn off all unessential lights, to turn off air conditioners or at least set them at 26C or higher and to delay the use of major equipment until after 10 p.m.

While the hot weather drove up electricity prices, most of yesterday’s electricity woes were caused by members of the Society of Energy Professionals. They have been on strike at Hydro One, the province’s power distribution utility, since the beginning of June.

Secondary pickets set up at the gates to Nanticoke on Lake Erie forced Ontario Power Generation to shut down six of the station’s eight units by late afternoon.

"What’s happened is that we’re talking about 3,000 megawatts of power that is not available that was expected to be available," said IESO spokesman Terry Young. "You take 3,000 megawatts from the system on a hot day and it will have an impact on price."

Energy Minister Dwight Duncan said the pickets were allowing Nanticoke employees to report for work and indicated that the shutdown reactors would be brought back into service. He also said OPG is seeking an injunction to prevent a repeat performance.

Faced with a shortage of generating capacity at home and demand that soared as high as 24,000 megawatts at the end of the afternoon, Ontario was forced to import 2,800 megawatts of electricity and also run some of its most costly generating plants, including the gas-fired Lennox station.

Prices soared to nearly 44 cents a kilowatt hour by 5 p.m, far in excess of the 6.58 cents average so far in the month of June.

"One wonders what Monday is going to look like," said Tom Adams, executive director of the watchdog group Energy Probe. "The heat is supposed to continue, and the union has demonstrated an ability to escalate the problems."

Brian Robinson, a spokesman for the 1,000 engineers and other white-collar striking workers, was unapologetic.

"Everything we are doing is a strike-related activity. It’s legal. It’s what people do when they are on strike," he said.

Mr. Robinson said his members are upset by a Hydro One proposal to introduce a lower pay scale for new employees as well as efforts to increase the workweek to 39 hours from 35 with no increase in pay. The average salary for society members is about $85,000 a year.

Alan Findlay, Queen’s Park Bureau
Toronto Sun
June 28, 2005

Ontario sucked up record levels of electricity to beat the heat yesterday as striking Hydro One workers continued targeting generators that are running flat out to feed air conditioners.

Late yesterday afternoon, electricity consumption soared past the previous provincial record, surpassing Ontario’s home-grown supply and forcing power officials to import expensive electricity from neighbouring U.S. states and provinces.

The previous record for hourly consumption was set on Aug. 13, 2002, when 25,414 megawatts were consumed. By 6 p.m. yesterday, usage had edged above the 26,000-megawatt mark.

The difference between yesterday’s consumption and the previous record represents almost enough electricity to power a city the size of London, Ont., according to one system official. "Although the system is strained, no question, we can meet demand," said Terry Young, spokesman for the Independent Electricity System Operator.

Another record today?

Yesterday’s record, however, may not last long. The heat wave carries on through the week and air conditioners will work even harder to keep buildings cool. "We could be looking at another record (today)," Young said.

A new report by the IESO warns the province will continue to be reliant on its neighbours for power during the hot days until more local generation is up and running.

Ontario Power Generation managed to keep its available turbines cranking out hydro through the day, despite picket lines being set up outside two stations early in the morning.

Over 2,000 megawatts were being imported during the day.

Critics and industry watchers characterized yesterday’s achievement as dubious, considering the provincial government’s promise to reduce consumption by 5% by 2007.

"Ontario should be very worried about this," said Energy Probe‘s Tom Adams. "Our electricity consumption keeps rising, but our capacity to generate power is not."

The province has said it will give $160 million of electricity revenues to reward customers who conserve electricity.

Lee Greenberg
National Post
June 28, 2005

Toronto: Energy officials urged Ontarians to reduce demand for electricity from the record highs set yesterday, as the province imported costly U.S. power and rotating blackouts were required to ease the pressure on the energy grid.

"Any increase in demand could create shortfalls of electricity and require proactive actions such as emergency purchases from other jurisdictions or voltage reduction on the Ontario system," the Independent Electricity System Operator said in a statement last night.

Demand for electricity in Ontario reached 26,157 MW at 6 p.m. last night, its highest level in history. The province’s fleet of coal, nuclear, gas and hydroelectric generators could only produce 25,087 MW.

Ottawa Hydro was forced to implement rotating blackouts from 6 to 7:30 p.m. to deal with a surge in demand, leaving at times 7,300 homes in Ottawa without power.

People watched air conditioners, fans and stoves shut down for 15 minutes every half hour for more than 90 minutes.

"The demand for electricity [today] is expected to reach or exceed those record levels," said the IESO, which manages the province’s electricity supply, and asked consumers to limit energy consumption between 8 a.m. and 8 p.m. by turning off non-essential lights and avoiding the use of appliances such as laundry machines and dishwashers.

Industry observer Tom Adams, executive director of Energy Probe, said yesterday’s historic numbers show Ontario’s electricity system is being pushed to the brink of disaster.

The power crunch came as a strike by Hydro One workers threatened to strain the system further by preventing power-plant workers from doing their jobs.

Ontario Premier Dalton McGuinty did not rule out the possibility of back-to-work legislation if it was necessary to protect the province’s electricity supply.

"I would ask [Hydro One workers] to … act responsibly, to not jeopardize the safety and quality of life and economic viability that Ontarians rely upon when they have to have access to an uninterrupted supply of electricity," Mr. McGuinty said.

Pickets with the Society of Energy Professionals have lately targeted provincial plants, owned by Ontario Power Generation, in an attempt to draw attention to their cause. On Friday, they were responsible for shutting six of eight units at the Nanticoke generating station on the north shores of Lake Erie.

On Monday, the union moved its protests to the Lambton (Sarnia) and Lennox (Kingston) generating stations, forcing OPG to use a helicopter to shuttle workers in and out of the two stations.

Worried that a larger workforce would make a similar contingency plan impossible at Darlington and Pickering, two of OPG’s nuclear facilities, the massive utility rented hundreds of cots and set up makeshift dormitories there.

"With the energy professionals, we have a group that is knowledgeable and apparently motivated to impair the system. And that makes a bad situation worse," said Tom Adams.

Union spokesman Brian Robinson said the union has no plans to change its strategy. It was in court yesterday fighting OPG’s attempt to secure an injunction on pickets at Nanticoke. A decision on the injunction is expected today.

"It had an impact," Mr. Robinson said of Friday’s action. "We don’t expect the public to support everything we do. But we would think the public will support what we’re fighting for."

CBC News
July 19, 2005

A company from Almonte, just west of Ottawa, has developed a new smart meter that could help reduce Ontario’s power crunch. The device from Triacta Power Technologies enables owners of apartment buildings to charge each tenant for the exact amount of electricity used.

Ontario’s electricity-generating capacity has been stretched to the limit recently. Hot weather has pushed demand for electricity to record levels twice in the last few weeks. On Monday, the province had to import more than 3,400 MW of power, and the Independent Electricity System Operator cautioned Ontarians to reduce power usage for the rest of the week, or face the possibility of blackouts.

Smart meters, such as the new one from Triacta, can help a surprising amount.

The company’s Jennifer Hassani says the device forces tenants to become responsible energy users because it records the amount of electricity a consumer is using at a given time.

"When each tenant receives a bill for their own electricity use, overall electricity consumption for that building tends to drop anywhere between 15 and 30 per cent," said Hassani.

"For every four buildings you meter, you could literally power another building, so it’s quite significant in terms of energy conservation."

Triacta markets directly to property managers, and other commercial and industrial consumers. The device allows apartment building owners to "break down individual tenant use without having to completely re-wire their buildings," Hassani explained.

Individual homeowners don’t have access to smart meters yet, but the province is planning on phasing them in over the next few years.

"It’s going to take a while to make this transition for the residential level, but certainly, a number of businesses are installing interval meters, or smart meters, and that’s a tool to help them better manage their energy costs," said Terry Young, with the Independent Electricity System Operator.

But groups such as Energy Probe say the real issue is the fixed price of electricity in Ontario, which provides no incentive to cut power use during peak hours. Energy Probe‘s Tom Adams says the province won’t see significant conservation until consumers are made to pay the true cost of electricity.

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.

Karen Howlett
Globe and Mail
July 21, 2005

The record-shattering heat wave in Ontario has sent energy costs soaring in the province, leaving consumers facing higher bills next spring as the government moves to cover a growing deficit.

As things stand, the cost of buying electricity on the open market exceeds what the government charges consumers to run their air conditioners and televisions.

That gap is widening as this summer’s sweltering heat and high humidy drive up consumption levels, making electricity even more expensive.

The province has paid 7.9 cents a kilowatt-hour on average to buy power from generating companies so far this month, up from an average of six cents in the first half of this year.

Consumers, by comparison, are paying five cents a kilowatt for the first 750 kilowatt hours of power they use each month, and 5.8 cents for the remainder.

Contrast that to yesterday afternoon, when the price of power jumped to just over 53 cents a kilowatt-hour, a level not seen in some time but below the record of $1.02 back in September, 2002.

"Bottom line: Customers are not paying anything like the real cost of power," said Tom Adams, executive director of Energy Probe, a Toronto-based energy watchdog.

That is expected to change April 1, when the Ontario Energy Board unveils its new price plan.

The agency tracks the difference between what the province is paying for electricity and what it collects in revenue in a so-called variance account.

As of June 30, the account had accumulated a shortfall of $42-million over three months, up from $6-million in May.

Mr. Adams says the shortfall between the government’s revenue and costs could climb to $160-million by the end of the summer, a level that would allow the OEB to trigger a price increase for consumers before April.

Angie Robson, a spokeswoman for Energy Minister Dwight Duncan, said the prices set by the OEB are to cover the true cost of generating electricity and will be adjusted to reflect the unusually hot summer. She said any price increase would be partly offset by a rebate consumers will receive for last year, an amount that has not yet been determined.

Denise Harrington, an OEB spokeswoman, said she cannot say definitively that consumers will pay higher prices for electricity next year. But she acknowledged that this summer’s unrelenting heat wave is having an impact on prices.

"Definitely, the spot market prices are going to be passed on to consumers," she said. While a lot of money has been paid to power generators in June and July, the OEB does not know how the rest of the year will shape up, she said.

New Democrat Party Leader Howard Hampton said the province’s 4.5 million residences and small businesses are facing a significant rate increase next year. "If we continue on the path we’re on . . . it will be a rate increase that people will feel, especially those living on limited or fixed incomes."

While Mr. Adams said he is expecting only a modest price rise to consumers for the electricity itself, regulatory, debt retirement and delivery charges are also in every electricity bill. The OEB could also increase what is known as the wholesale market surcharge, currently 0.62 cents a kilowatt-hour, to recover guarantees and other premiums associated with importing power from neighbouring states and provinces.

As the hot weather pushes up demand for electricity, the province has had to rely more on expensive imports.

The energy-supply-shortfall problems emerged under the previous Progressive Conservative government. But they have not ended under Premier Dalton McGuinty’s Liberals, according to a recent 10-year forecast from the Independent Electricity System Operator, the agency responsible for managing the province’s electricity system.

PC Leader John Tory criticized the government for not having a plan to address the problem and leaving the province at the mercy of outside sources.

"It’s only going to get worse," he said.

"Unless there’s a lot of shovels put in the ground very soon to increase capacity for Ontario, we’re going to probably have continuing problems with supply and upward pressure on prices."

Doug Alexander
Bloomberg.com
July 22, 2005

Ontario is in its worst energy crunch in three years as a heat wave, record electricity demand and idled nuclear plants force Canada’s most populous province to rely on imported power.

Energy authorities this week asked residents to reduce consumption as temperatures climbed as high as 34 degrees Celsius (93 Fahrenheit), boosting demand from air conditioners. The maximum temperature in Toronto so far this month has averaged 30.3 degrees Celsius, or 3.5 degrees higher than the norm since 1971.

Suzanne Witlarge, a Toronto banker, has taken the warnings to heart. She turns off her air conditioner when she is at work and now sets the thermostat higher than usual when she is home.

"I’m concerned about a blackout," said Witlarge, 24, who works at Canadian Imperial Bank of Commerce’s headquarters in the city’s financial district. "They’ve said if people are consuming too much power there will be outages."

Temperatures were above normal in late June as well, prompting three warnings from the power grid operator to cut usage. This is the longest power shortfall ever, based on the number of days utilities have been forced to import electricity, said Tom Adams, executive director of Energy Probe, a public policy research group in Toronto.

"We’re hanging by a thread," Adams said. "What we’ve got is the confluence of a bunch of factors, many of which are self- inflicted, that have pushed us to the absolute limit of our ability to keep the lights on."

The closing of a coal-fired power plant near Toronto to reduce pollution, the shutdown of two nuclear reactors and the heat have contributed to the crisis, he said.

The shortage has been front-page news. The National Post on July 19 said "Ontario Faces Outages," while the Toronto Star, Canada’s biggest circulation newspaper, had a page-one story on the costs of buying electricity from the U.S. The Star has a chart on its Web page with the province’s daily power supply and usage.

Ontario’s provincial government spent the past seven years reorganizing its regulated electricity industry, changing rates to better reflect the cost of power and encouraging companies to build natural gas plants and non-polluting power projects such as wind turbines to replace coal plants.

The 1,140-megawatt Lakeview Generating Station near Toronto closed in April as part of Ontario Premier Dalton McGuinty’s election promise to eliminate coal as a power source by 2007 to reduce pollution. The government last month said it would keep the Nanticoke Generating Station, North America’s biggest coal plant, open until 2009 to ensure the province has enough power.

"We’ve been having the highest demands ever on the Ontario power system," said Paul Murphy, chief operating officer of the Independent Electricity System Operator, which oversees the power grid. "We’ve been managing to meet those demands but it’s really requiring all our resources, and we’ve been importing electricity from outside Ontario as well."

The hot and humid weather pushed Ontario’s power needs to a peak of 26,160 megawatts on July 13, forcing the province to import about 2,500 megawatts from Quebec, Manitoba and the U.S. The imports were at prices as high as C$1.23 a kilowatt-hour, or 25 times what homeowners pay under the government’s lowest subsidized rate.

While Ontario often imports power when it’s cheaper than running its own power plants, it rarely does so to keep up with demand, said Lisa Pearson, a spokeswoman for the system operator.

The province imported 4,273 megawatts during a heat wave on Sept. 20, 2002, reaching its import limit for the transmission system. The current shortage is the worst since then.

‘Critical’

"If this weather keeps up, it looks like we could be approaching a critical situation," said Matthew Kolodzie, senior vice president of utilities at Dominion Bond Rating Service, which follows Ontario’s energy market. "Things are getting tight. If you get another big plant down, there could be a problem."

Utility companies have been told to put off repairs. Ontario Power Generation, the government-owned utility, on July 18 restarted a 515-megawatt reactor at its Pickering plant east of Toronto that had been idled for 3 1/2 months for unexpected repairs. An 840-megawatt reactor at a nuclear plant on Lake Huron owned by Bruce Power LP has been out of service since May 8 and won’t be restarted until early August. Combined, the two generators produce enough power for about 1.3 million homes.

New Plants Needed

Ontario today has 30,114 megawatts of generation capacity. The biggest share is nuclear power, representing about 36 percent of total supply. Hydro-electricity accounts for 26 percent, while coal is 21 percent and oil and gas runs 17 percent.

Toronto could face rolling blackouts during heavy demand to stop transmission facilities from overloading, the grid operator said in a 10-year forecast released July 8.

They hope to avoid a repeat of the Aug. 13, 2003, blackout, when 50 million people in Ontario and eight U.S. states lost power after an unexpected shutdown of an Ohio generator.

"New generating and transmission facilities, particularly in the Toronto area, are urgently required over the next decade in order to meet the expected demands for electricity," the system operator’s chief executive, Dave Goulding, said in a statement.

Josh Pringle
580 CFRA Radio
August 13, 2005

It has been two years since Ontarians spent the night in the dark and experts say residents have not learned the lessons of the blackout.

It was a sweaty August 14th, 2003 when a fault in Ohio led to a massive power outage across Ontario and the eastern US.

The executive director of Energy Probe says the province continues to hit record consumption levels.

In an effort to avoid rolling blackouts this summer, Hydro officials have instituted rolling brownouts to conserve electricity.