Energy Probe

Gillian Livingston
Ottawa Sun
August 16, 2005

The oppressive heat wave that prompted Ontario residents to crank up their air conditioners has subsided but it has left a costly electricity bill in its wake.

To date, residents on the regulated electricity rate plan have underpaid their hydro bills by $113.5 million for the period from April 1 to July 31.

At the end of June that amount was $42.1 million, but it skyrocketed after electricity demand broke records during July’s heat wave, and tight supply caused a dramatic spike in market prices.

"It’s a big jump," said Tom Adams, executive director of Energy Probe. "There’s going to be sticker shock."

Bill Rupert, the managing director of strategic planning and policy development for the Ontario Energy Board, said he’s not surprised the price of power has exceeded the rate residents pay because of the sweltering weather.

Normal forecast

When the board set prices earlier this year, it didn’t forecast such a hot summer, he said.

"Our forecast was really based on more or less a normal weather year," Rupert said. "We did not do our forecast based on an extreme weather year."

Hot weather and the need to use higher-priced natural gas electricity generation were factors that boosted the market price, Rupert said.

A household using 1,000 kilowatt hours of electricity every month for an annual total of 12,000 kilowatt hours would owe an extra $18.50 if it had to settle that bill right now.

But the regulated price residents pay won’t change before next spring.

However, the Ontario Energy Board will factor in the difference between what’s been paid versus the actual market price when the regulated price is examined early next year.

That amount will fluctuate depending on the weather and what effect it has on the demand for power and the market price.

The board said it’s too early to tell how this might affect prices in the future.

Fixed-rate plan

Ontario residents and small businesses are on a fixed-rate plan, so they don’t pay the market price like big industries do.

Ontarians currently pay 5cents per kilowatt hour for the first 750 kilowatt hours used, and then pay 5.8cents per kilowatt hour beyond that level.

The average market price since May 1 is 7.68cents per kilowatt hour, and the price so far in August is nearly 12cents per kilowatt hour.

Adams expects that over the next two years, overall electricity prices in Ontario, including the cost of transmission, will rise by 25%.

Rupert urged Ontarians to conserve when overall demand is high because rising demand pushes up market prices, and that eventually factors into the regulated price.

Doug Alexander
Bloomberg.com
August 18, 2005

Ontario Power Generation, the utility that provides most of the province’s power, will spend C$985 million ($807 million) to build a water tunnel that will boost production at a hydroelectric plant near Niagara Falls. see Niagara Tunnel Project.

The German unit of Austria’s Bauholding Strabag SE has received a C$600 million contract to construct the 10.4-kilometer (6.5-mile) tunnel, which will supply water to the Sir Adam Beck Generating Complex, provincially owned Ontario Power said today in a statement.

Construction is scheduled to start in September and finish by 2009, the utility said. The tunnel will let the plant, six kilometers downstream, boost production by 1.6 terawatt-hours, enough to meet the yearly needs of a 160,000-person city.

"It’s a step in the right direction," said Tom Adams, executive director of Energy Probe, a research group that advocates energy conservation. "It is a modest increase in output, but the operating costs will be low and it’s located close to places where consumers are drawing a lot of power."

Hydroelectric plants generally cost less to operate than nuclear power plants or natural-gas-fired ones, Adams said.

Ontario faces energy shortfalls in the next decade as it plans to shut down four coal-fired plants, which represent about a fifth of Ontario’s power supply, by 2009.

Austria’s ILF Beratende Ingenieure, Morrison Hershfield of Toronto and Dufferin Construction of Oakville, Ontario, and other Ontario subcontractors will be working on the project, Ontario Power said.

The additional C$385 million will be spent on consultant fees, interest costs, environmental work, insurance and remedial work at retired power plants at Niagara Falls, according to the utility.

Tyler Hamilton
Toronto Star
August 22, 2005

The Ontario government is preparing to unveil a program next month that would encourage homeowners, farmers, schools and community co-ops to set up renewable energy systems by letting them sell "clean" power to the grid at a fixed premium.

Energy Minister Dwight Duncan, in an interview with the Star, said the program would be limited to smaller projects, typically less than 10 megawatts, but over time could add thousands of megawatts of renewable power to a strained provincial grid being weaned from coal.

"We support it entirely . . . It encourages small businesses, farms, individual households and others to come to the table," said Duncan. "I would anticipate an announcement, probably in September."

He has instructed the Ontario Power Authority to investigate a workable pricing scheme and the Ontario Energy Board to look at necessary connection-policy changes that would ensure non-discriminatory access to the grid.

Ontario would become the first province in Canada, and possibly the largest jurisdiction in North America, to open its electricity system to small suppliers of renewable energy and pay a premium on each kilowatt of clean electricity it purchases.

In a letter sent last Thursday to both regulatory authorities, Duncan urged that work begin "immediately" with the goal of having an implementation plan before year’s end.

Duncan said the program would be open to solar, wind, biomass and micro-hydro projects. It’s largely expected to mirror a proposal submitted to the energy ministry in May by the Ontario Sustainable Energy Association (OSEA).

At its heart is a so-called feed-in tariff or "standard offer contract" that provides attractive fixed-price contracts, typically for a period of 20 years, and offers a right to interconnect with the grid. The idea is to price high enough to encourage production and have the premium spread across all ratepayers.

"I think people are prepared to pay a higher price for cleaner energy," said Duncan.

Paul Gipe, a U.S.-based wind-energy expert who recently served as acting executive director of the energy association, said it would be the most extensive policy of its kind on the continent, going beyond what California did during the 1980s.

"Ontario would be far ahead of any jurisdiction in North America, assuming it gets the prices right," said Gipe, who was lead author of the proposal.

The approach has been implemented successfully in Europe, allowing countries such as Germany and Spain to add a significant portion of renewable energy to their overall power mix while capturing early solar and wind manufacturing opportunities.

For example, most of the 16,600 megawatts of wind energy in Germany comes from small projects built since 1991. The wind industry is now the second-largest consumer of steel in Germany and is expected to employ 110,000 people by 2010, up from 45,000 today.

"There’s no question if the Ontario ministry of energy puts in feed-in laws, that puts out a powerful signal saying we’re in this for the long haul," said Sean Whittaker, policy director for the Canadian Wind Energy Association. "We’re very much in support of it."

Rob McMonagle, executive director of the Canadian Solar Industries Association, said he’s pleased the province is looking beyond wind and including other options such as solar.

"We just need some government to take the lead. Once you get that first major program announced, it opens up the floodgate for other programs to follow," he said.

Prince Edward Island has embraced feed-in tariffs, and Oregon, Minnesota and Washington states are moving in that direction. But experts say Ontario, if it can move fast on its program, can blaze a trail and capture the investment and industrial opportunities that come with it.

"This makes enormous sense," said Duncan, pointing out that it serves the dual purpose of meeting clean energy demands and sparking economic development.

"Somebody has to build the windmills. Somebody has to build the solar panels. Somebody has to build the anaerobic digesters. Right now Ontario is ideally positioned, not only to serve our own market, but to also serve the North American market."

Industry experts say many foreign manufacturers of wind turbines, eager to tap North American demand, are scouting out places to set up manufacturing and assembly facilities.

"What these manufacturers are looking for is a strong, stable policy message," said Whittaker.

Spain’s Ecotecnia, Denmark’s Vestas and Enercon of Germany are considered three of the most likely wind-turbine manufacturers to consider operations in Canada. Gipe said Ontario would be wise to court Enercon, which has labour-intensive technology that would make the biggest impact in terms of job creation.

Duncan said he’s had "fairly advanced" negotiations with wind turbine manufacturers, and while he wouldn’t say which ones, he said stimulating small renewable energy projects in Ontario makes the province more attractive.

"We shouldn’t miss that boat," he said.

The government has committed to closing down by 2009 four coal-burning power plants representing 6,400 megawatts of generating capacity. It plans to replace that power with a mix of renewable energy, nuclear and natural gas facilities as part of a more distributed electricity system.

To date the province has been focused on large-scale renewable energy projects, such as wind farms, which are selected after a formal request for proposals. Last November, the government announced 10 projects that would provide 395 megawatts of clean power, and it’s closing a second round of requests for up to 1,000 megawatts for projects of 20 megawatts or higher.

A third round announced in July for up to 200 megawatts is seeking small to medium-sized projects of less than 20 megawatts. The target is to generate 5 per cent of Ontario’s energy capacity from renewable resources by 2007, rising to 10 per cent by 2010.

In its proposal, OSEA said using such a costly tendering process makes it difficult for smaller projects to participate, even though many of these projects taken together can make a significant contribution to the province’s energy needs. Establishing a feed-in tariff would create a more inclusive environment, making it easier for any Ontarian to play a role in the province’s energy future.

"European experience indicates that small, distributed projects with community or local participation result in more renewable energy developed more quickly and increases the public’s acceptance of the technology," according to the association, adding that increased distribution of generation typically results in increased system reliability and reduced line losses.

Gipe, who consulted with farmers on the program, said he expects to see increased investment in rural Ontario, where wind turbines, biogas facilities and even solar photovoltaic systems would be ideally located.

"The farmers, they understand markets. Every place we went their question was, when do we start?" he said.

"I think farmers are not only a natural constituency for doing this, but they’re also a natural constituency for making this happen."

Monica Wolfson
Windsor Star
August 23, 2005

Enwin Powerlines paid $5.2 million too much for a new computerized billing system that it bought for the deregulated electricity market, an accounting audit shows.

Auditors also said Enwin mismanaged the computer project with poor planning and a lack of oversight over private contractors hired to design and program the system. Managers bungled the project by not making sure the system was delivered as ordered and on time, documents said.

The allegations are made in a KPMG audit used as part of Enwin’s application to provincial regulators asking to recoup $101 per customer or $13.3 million in expenses incurred when the city-owned utility prepared to deregulate.

The Aug. 12 petition is the second application Enwin has submitted. Last summer, Enwin asked regulators for $18 million, but withdrew the filing when new management took over the utility and discovered the application was inaccurate, said Mayor Eddie Francis.

"We are not going to recover this money," said Francis, who sits on the Windsor Utilities Commission, which oversees Enwin. "There is no reason the ratepayer should pay for something they had nothing to do with."

The rate filing asks for an average rate increase of $7.39 per month, if the customer uses 1,000 kwh of electricity. If approved, the rate hike, which includes an increase in distribution costs, will take effect May 1.

Employees who managed the computer project are no longer working for Enwin, said Enwin’s acting president and CEO Maxwell Zalev.

"We believe we are getting the confidence of our board and the confidence of our ratepayers," he said.

The sophisticated computer systems, which could bill customers the actual price of electricity as it fluctuated, are now useless because the price of electricity is capped, said Keith Stewart, smog and climate change campaigner with the Toronto Environmental Alliance.

In its annual report Enwin wrote off $6 million last year in anticipation of not being able to recover the entire $11 million spent on the computer system. Consumer groups said the loss should result in the City of Windsor receiving less revenue from the utility. But Francis said the city has been guaranteed it will receive its $1-million yearly dividend.

Enwin officials could not say exactly where the money came from to pay for the project. Francis speculated Enwin might have put other projects on hold while it set aside money to pay for the computer system.

Enwin’s request for $101 per customer is still double what most utilities requested, said Tom Adams, head of Energy Probe, an environmental advocacy group.

"Even the pared down claim is still very high," Adams said. "Enwin still faces a difficult challenge in proving even the pared down claim is reasonable."

Last year Toronto Hydro sought a rate increase of $48.71 per customer, while Ottawa tried to get $21.85 and London requested $66.74.

Buried in the rate application under extraordinary events, Enwin is seeking to recover $1.1 million in costs associated with a January 2002 ice storm. While she was unable to say how the ice storm was related to electricity deregulation, Victoria Zuber, Enwin’s finance director, said it meets the "criteria." Adams said he doubts Enwin will be able to recover the ice storm costs.

Enwin is not the only utility backing away from trying to get reimbursed for all its expenses, Zalev said.

"It’s not an unusual circumstance compared to other utilities," he said.

Toronto Hydro requested $32 million despite spending $44 million to get ready for deregulation. Hydro One sought $59 million even though it incurred $105 million in expenses.

Electric utilities were duped into buying fancy computer systems because in the chaos of deregulation, electricity officials didn’t know what they wanted or needed in the new market, Stewart said.

"There probably was mismanagement in a lot of places, but they were also changing their business models," Stewart said. "They didn’t entirely understand what they were doing."

Adams said that is a poor excuse for a utility that didn’t pay attention to how it spent the public’s dollar.

"Other utilities were able to do it for a reasonable cost," Adams said. "So I don’t accept that these were high costs utilities couldn’t avoid."

Karen Howlett and Omar El Akkad
Globe and Mail
September 16, 2005

Consumers in Ontario should brace for a double whammy of higher electricity and natural gas bills as a hot summer combined with energy shortages begin to hit home.

Consumers are now paying artificially low prices for electricity and natural gas. But that is about to change.

Ontario’s energy regulator announced yesterday that the shortfall between what the province is paying to buy electricity on the open market and what it charges consumers doubled to $228.8-million at the end of August from $113.5-million at the end of July.

This translates into an increase of between $28 and $37 a year for the average household, depending on consumption levels, said Bill Rupert, a managing director at the Ontario Energy Board.

He acknowledged that many observers are expecting higher prices when new rates come into effect next May.

"The lowest income people in Ontario are already being hit hard, and [Premier] Dalton McGuinty is going to hit them even harder," said New Democrat leader Howard Hampton.

The OEB also approved a 5-per-cent price hike this week for Union Gas, which has just over one million customers in Southwestern Ontario. Consumers are facing another 38-per-cent price hike to reflect soaring market prices for natural gas.

This week’s price increase does not take into consideration the effect of hurricane Katrina, or the sharp spike in natural gas prices in August, said Gregg Scott, a partner at Energyshop.com, an energy price comparison service. The increases associated with those changes won’t hit consumers until the next time natural gas providers can change their rates, Jan. 1.

"Consumers are saved for the first part of winter, but they’re going to get blasted in the second part," Mr. Scott said.

Ontario Energy Minister Dwight Duncan said he is worried about the impact of rising gas prices on consumers. "I don’t think Ontarians have really factored that into their winter budgeting," he told reporters.

Union Gas won OEB approval to charge customers about 30 cents a cubic metre effective Oct. 1. This amounts to a yearly increase of about $65 on an average customer’s bill, said company spokeswoman Andrea Stass. Enbridge, which has 1.7 million customers in Toronto and surrounding areas, is also asking to raise rates to about 35 cents a cubic metre. Both companies pass their costs directly onto consumers.

Mr. Scott said the companies based their recent projections on gas purchased at lower prices during the summer. That supply will quickly dwindle in the winter, he said.

The current market price of natural gas is about 44 cents a cubic metre, he added.

Tom Adams, executive director of Energy Probe, an energy watchdog, criticized the regulator for underestimating electricity costs. This summer’s sweltering heat has driven up consumption levels, forcing the province to import expensive power from the United States on many days to meet soaring demand.

"The bottom line is that the supply outlook is terrible, the demand outlook is up, up, up and the underlying bankruptcy of the power system is more ad more evident," Mr. Adams said. "This $229-million is a warning sign of higher prices."

Howard Wetston, chairman of the OEB, said in a speech this week that the regulator assumed normal weather conditions when it forecast that electricity prices would average just over 5.3 cents a kilowatt-hour over the fiscal year beginning last April 1.

"I cannot predict what prices will be next year," Mr. Wetston said. "Much depends on supply and demand conditions for the next six to seven months.

The province has paid 9.85 cents a kilowatt-hour on average to buy electricity 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.

Globe and Mail
October 8, 2005

A New Brunswick coal-fired power plant is the dirtiest power generator of its kind in North America, says a national energy and environmental research group.

The report by Energy Probe says New Brunswick Power’s Grand Lake station has the worst acid gas pollution rate among more than 400 coal plants on the continent.

The station has been operating since 1931.

The report also ranks three Nova Scotia coal stations – Point Tupper, Lingan and Trenton – low on the list, while three Saskatchewan stations – Shand Power, Boundary Dam and Poplar River – also fared poorly.

Two units from Ontario’s Lambton station ranked well, placing fourth and ninth among the continent’s cleanest.

Steve Erwin
National Post
October 10, 2005

Ontario has no plans to listen to "Neanderthals" who want the province to keep its coal-burning power plants operating, even if that’s what a report being prepared for the government recommends, says Energy Minister Dwight Duncan.

"We are moving to close the coal plants, period, full stop," Duncan said in an interview with The Canadian Press.

More than 80 per cent of the province’s power generation needs to be rebuilt or replaced over the next 20 years. The OPA has been meeting with energy industry stakeholders to determine what sources of new power generation the province should invest in.

Ontario is currently powered 49 per cent by nuclear reactors. Twenty-five per cent is supplied by hydro, 17 per cent by coal, seven per cent by gas and the remainder from wind and other alternative energy sources.

Duncan has said the government will agree to build new nuclear reactors should the OPA recommend it. But he says those lobbying the authority to recommend so-called cleaner coal technology and keeping the plants open are a century behind the times.

"I say to the Neanderthals . . . we’re moving forward responsibly to ensure that we clean up our air," Duncan said.

"We’re in the 21st century. They’re in the 19th century."

Air pollution remains a key concern in Ontario. Fifty smog advisories have been issued for the province this year, including a rare October advisory issued last week.

"I am sick and tired of having smog days in October," he said. "We had a smog day in February. We’ve had smog days in Algonquin Park." He’s also unimpressed with a report by Energy Probe, a national energy and environmental research group, which last week listed two Ontario coal-fired plants as being among the cleanest in North America.

"So we may have among some of the better of the worst forms of energy producers in North America. Who cares?" Duncan said. "We want to get rid of them. It’s the equivalent of taking every vehicle, every car and every light truck off the road in this province."

Duncan’s resistance to coal is a mistake, argues Energy Probe executive director Tom Adams.

Adams wants the province to keep at least two units at its Lambton station, south of Sarnia in southern Ontario, which rank fourth and ninth out of 403 in the report’s list of the cleanest plants on the continent.

Adams argues that closing the units would end up requiring the province to import coal-fired power from the United States, which would "exacerbate adverse environmental and human health impacts to Ontarians." Adams said some of the dirtiest coal-fired generators are in American states neighbouring Ontario: the Picway and Richard Gorsuch stations in Ohio and the AES Greenridge station in New York.

According to Power Workers’ Union president Don Mackinnon, the province can refurbish its coal plants with "the latest and greatest" clean technology for $3.3 billion. Mackinnon says that’s $1.8 billion cheaper than it would cost to replace coal plants with natural gas.

"We’re trying to convince the OPA and the government to rethink this," says Mackinnon, whose union represents some 1,200 coal plant workers in Ontario.

"I’m hoping the OPA will keep the door open on it. But in the end, all they can do is make a recommendation. The minister has the power to issue a directive with regards to the supply mix."

The David Suzuki Foundation has maintained renewable energy, such as wind, biomass, solar and geothermal sources, can replace the power that will be lost by shutting down coal plants.

"Unfortunately, that doesn’t seem to be the direction that the Ontario government is taking," said Dale Marshall, the foundation’s climate change policy analyst.

Marshall said he believes the province has pre-determined it will look to more nuclear power to address future supply concerns.

He said that’s a multibillion-dollar mistake that will raise further environmental debates about the storage of nuclear waste.

Belleville Intelligencer: Editorial

October 12, 2005

It’s hard to believe an evironmental group would advocate the continued operation of coal-fired power generating units, but that’s exactly what’s happening here in Ontario.

When elected, Dalton McGuinty’s Liberal government promised to close all the province’s coal-fired plants in a bid to reduce air pollution.

The idea was a popular one with many voters given that these stations are frequently criticized as being heavy polluters.

With his track record for keeping promises, and the problems involved in replacing about 7,500 megawatts of power – more than 20 per cent of Ontario’s electricity supply – the province will lose when the plants are shut down, many doubted he would or could deliver.

Yet, so far, McGuinty has tried to stay the course on this issue. Mississauga’s Lakeview plant was closed in April and things are reportedly on track to close the Thunder Bay, Atikokan and Lambton stations by the end of 2007.

That would just leave Nanticoke – frequently labelled Ontario’s worst polluter – which McGuinty has already admitted won’t be fully shut down until early 2009.

Clearly environmental groups ought to be happy, particularly after all the smog warnings we’ve had this summer, including one just last week — in October.

So why is it that one of them is suggesting McGuinty might want to rethink his plans?

Well, it helps to know that group making the suggestion is Energy Probe, a national energy and environmental research organization that is vehemently opposed to nuclear power – which looks like being the most likely replacement for the coal-fired plants.

In an interesting twist on the adage that says ‘you can prove anything with statistics,’ Energy Probe is using its report on worst coal polluters to make its point.

According to a story from The Canadian Press, the report shows two of Ontario’s coal-fired power generation units are among the cleanest in North America while a third one – Unit 4 at the Lambton generating station, south of Sarnia – ranks as fourth cleanest among 403 coal generation units in Canada, the United States and Mexico.

The report further states that Lambton’s Unit 3 ranks ninth and notes that none of the other Lambton units nor three other remaining coal-fired stations in the province – not even the Nanticoke facility – are low in the rankings of worst coal polluters.

Noting that Ontario has "some middle-of-the-pack units, (but) we don’t have any of the real dogs," Energy Probe executive director Tom Adams concludes, "From an environmental point of view, it makes no sense to shut these down while we’re importing large amounts of coal-fired power from our neighbours."

This may sound strange coming from the organization that harangued the former Tory government because it doubted its ability to have the Lakeview generating station off coal by a promised deadline of May 2005, but it does have a certain amount of logic on its side.

Forgetting for a minute the whole nuclear issue, there are many who doubt the province can have enough generating capacity in place in time to replace that lost by closing the coal-fired plants.

If they are right, and Adams believes they are, it really doesn’t make much sense to shut down our "clean" plants and import power generated by "dirtier" ones in neighbouring provinces or states.

At the very least, the Energy Probe report highlights the need for the Liberals to make clear just how they will meet an increasing demand for power while closing down the coal-fired generating stations as promised.

A response to this editorial by Tom Adams, the executive director of Energy Probe:

Your editorial, "Ontarians needs answers on future of power supply?" relied only on press reports of Energy Probe’s analysis of the environmental performance of Ontario’s coal plants, leaving your readers with a mistaken impression of our analysis.

The report, available at www.energyprobe.org, shows that nuclear power cannot replace coal, any more than wind power can, because neither are sufficiently reliable to keep the lights on.

Gas-fired power is the government’s main plan to replace coal, but, like nuclear, its costs are unaffordable. Our report shows that since being modernized with pollution controls, Ontario’s cleanest coal plants have lower acid gas emissions than many gas-fired plants but for approximately a third the cost. New coal facilities using off the shelf technology could slash emissions much lower still. Combined with conservation and renewable energy, cleaner coal is better solution for Ontario consumers than nuclear and gas.

Tom Adams, Executive Director, Energy Probe

Steve Erwin
The London Free Press
October 13, 2005

Ontario’s fall economic statement won’t be delayed, the province’s new finance minister said yesterday while acknowledging he’s got plenty to be briefed about in his new role.

"I have a lot to learn . . . but you know what? Onward and upward for us," Dwight Duncan told reporters when asked about his new position.

"It’s not under the best circumstances, but here we are."

Duncan was promoted to the critical finance portfolio after the sudden resignation Tuesday of Greg Sorbara.

Donna Cansfield joins cabinet for the first time, replacing Duncan as energy minister.

Duncan said plans for a fall economic statement, expected later this month or in early November, remain on target – even though he’s facing a steep learning curve in his new portfolio.

Duncan has degrees in commerce and economics – which will mean "absolutely nothing," he said, in tackling the new portfolio. He spent much of yesterday getting up to speed on key economic issues of the day.

Duncan was asked by a reporter whether he had any "skeletons" in his closet – a reference to the fact Sorbara’s name has been added to an RCMP search warrant as part of a fraud investigation involving his family’s firm.

"Not that I’m aware of," Duncan quipped. "There are some advantages to being poor in this business."

Critics will assess whether Duncan can get up to speed quickly on pressing economic issues and whether Cansfield can fill Duncan’s shoes in the challenging energy file.

One government official who asked not to be named noted Duncan "had one of the most difficult portfolios in the province" in Energy and is well-suited for Finance, where the annual deficit fell to $1.6 billion in the past year.

For Cansfield, the challenge could be much steeper, largely due to her cabinet inexperience at a time of heated debate about energy prices and future electricity supply.

Cansfield had been working as Duncan’s parliamentary assistant and took the lead on the so-called Conservation Action Team, developing long-term plans to meet energy conservation targets.

"I’m going to spend the next couple of weeks getting caught up in briefings," Cansfield said, adding she attended virtually all Duncan’s briefings on energy.

But Tom Adams of Energy Probe said the file is "in trouble" in that hydro rates are set to soar drastically.

The Sudbury Star
October 26, 2005

Editorial: Among the promises with which Dalton McGuinty swept into the premier’s office in 2003, his plan to eliminate smog-producing coal-generated electricity by 2007 stood out as particularly ambitious. Ontario was already staring at a future supply shortage and prices for that tenuous supply continue to be artificially suppressed by provincial subsidies. Where on Earth would McGuinty find a new energy supply cheaply and quickly?

The answer, which was not at all evident during his campaign, has become crystal clear over the past few months – and it promises to be neither cheap nor quick. Ontario is going nuclear. An announcement earlier this month that Bruce Power, Ontario’s largest independent electricity generator, plans to spend $4.25 billion to refurbish four units at its nuclear generating station off the shores of Lake Huron has signalled this intention.

While the capital cost for the refurbishments will be covered by Bruce Power, according to TransCanada Corp., a major Bruce investor, a "risk and reward sharing schedule" puts Ontario on the hook for 50 per cent of cost overruns of up to $618 million on the project and a 25 per cent share beyond that.

This is worrying. Ontario’s previous dalliances with nuclear power have been neither cheap nor convincing. Most recently, early estimates for the Darlington nuclear station pegged the cost at $2.5 billion, while estimates immediately before construction projected it would cost less than $4 billion. It cost more than $14.3 billion and was years late in being completed.

Similarly, refurbishing Pickering A nuclear reactors ballooned well past the September 2002 estimate of $780 million to the $3 billion to $4 billion range – five times the original estimate.

In fact, the notorious unreliability of Ontario’s nuclear generating system is the chief contributor to the province’s $20-billion hydro debt and one of the main reasons why we have experienced and will continue to experience electricity shortages.

So, what are the alternatives? A recent Energy Probe report shows two of Ontario’s coal-fired power generation units are among the cleanest in North America while a third one – Unit 4 at the Lambton generating station, south of Sarnia – ranks as fourth cleanest among 403 coal generation units in Canada, the United States and Mexico. All are slated for closure.

Ontario’s resistance to coal is a mistake, argues Energy Probe executive director Tom Adams. Adams wants the province to keep at least two units at its Lambton station open. Instead, then energy minister and now Finance Minister Dwight Duncan refused to countenance it, calling Energy Probe "neanderthals" living "in the 19th century."

Energy Probe has a compelling argument, however. Phasing out all of Ontario’s coal plants by 2007 (except the largest coal plant, Nanticoke, which will close in 2009) means we’ll have to import coal-generated power from Michigan and Ohio – thereby worsening our air quality problems.

And in the longer-term, Ontario taxpayers will be exposed to the potential for massive cost overruns on nuclear plants. This is one promise neither McGuinty nor Ontarians may be able to afford.