Energy Probe

Rob Ferguson
Toronto Star
June 10, 2006

The prospect of more long, hot summers is forcing Ontario’s Liberal government to once again break a promise to close highly polluting, coal-fired power plants, says Energy Minister Dwight Duncan.

The admission came yesterday after what Duncan dubbed a "disappointing" report from the province’s power monitoring agency, the Independent Electricity System Operator.

It warned a "significant delay" is needed in the plan to close coal plants by 2009 because last summer’s steamy weather and unprecedented demand for power during May’s brief heat wave are signs power use will be much higher than forecast.

"This is a disappointment and a setback," Duncan said in a telephone interview from Windsor. He refused to set a new deadline for closing coal plants.

The Liberals promised in the last election campaign to close all coal plants by 2007 in an effort to clean the air and reduce the hundreds of deaths caused every year by air pollution.

The schedule was revised a year ago, with most plants closing in 2007 but the giant Nanticoke plant on Lake Erie staying open until 2009.

While two northern Ontario coal plants are still slated to close next year, the Lambton station near Sarnia will stay open past 2007 and Nanticoke past 2009, Duncan said.

It would be irresponsible to close them before more "cleaner, greener" power generation is ready to take their place and keep the lights on across the province, he added. "You cannot compromise reliability by shutting down coal plants along the time lines we had hoped for."

Opposition parties and electricity watchdogs – who have warned for years the original Liberal promise to close coal plants was unrealistic because new power sources aren’t coming on line soon enough – were quick to say I told you so.

The 20-page report from the Independent Electricity System Operator released yesterday made a similar point and urged measures to speed up new generation sources.

"The minister’s got nobody to blame but himself because the government has been ignoring the facts," said Tom Adams of Energy Probe.

Ontario’s air quality could have been improved by now if the Liberals hadn’t stuck stubbornly to their plan and had taken stronger measures to clean up emissions at coal plants, said Progressive Conservative Leader John Tory.

"They’ve wasted almost three years."

Cleaner emissions are now on the government’s priority list, said Duncan.

He defended his "aggressive" coal promise, saying he never expected such a huge change in the long-term forecast, which now calls for an additional 3,000 megawatts of power. That’s almost as much as Nanticoke, the largest coal-fired plant in North America, provides alone.

Duncan accused the agency of overestimating the availability of hydroelectric power in summertime – when droughts keep water levels low – and underestimating demand for power now that usage peaks in summer, not in the winter.

"It’s the McGuinty government looking for someone to blame for their broken promise," said New Democratic Party Leader Howard Hampton.

London Free Press editorial
June 12, 2006

One hundred years ago this month, Sir Adam Beck of London became chairperson of Ontario Hydro and set in motion his plan for at-cost public electricity to power this province’s businesses, industries and homes.

By 1910, his Niagara Falls hydroelectric power (HEP) vision had become reality.

How things have changed. Our power-generation capacity is stretched as never before and we still await government plans on new generation.

This newspaper supports a broad-based generation system. So it was encouraging to hear from Ontario NDP Leader Howard Hampton that there is still potential for more hydroelectric power in this province. Quite a lot, in fact, if Hampton is right.

He says it can be expanded on Northern Ontario rivers, including the Abitibi, Mettagami and Missinabi, with a potential gain of 7,000 megawatts. Ontario’s peak daily usage is usually about 25,000 megawatts.

It would require a 600- to 700-kilometre transmission line to power-hungry southern Ontario; some of it is already there.

Of course, the cheapest power is the power we don’t use. The state of California, through conservation, has reduced its power consumption by 12,000 megawatts (15 per cent). That, says Hampton, is equivalent to saving the state the need to build three nuclear plants the size of Ontario’s Darlington at a saving of $10 billion apiece.

California’s aggressive conservation program includes strict building codes that demand high energy efficiency in all new buildings and renovations. There is also a push to replace old energy-guzzling appliances with new, efficient ones. This has turned old appliances into a lucrative recycling business.

London Hydro’s Chill Out London, which provides free pickup and disposal of old refrigerators and freezers, along with $75 toward the cost of new Energy Star units, is a start. Much more could be done if Ontario offered loans at low interest rates to upgrade appliances, windows, insulation, furnaces and air conditioners.

While Hampton opposes nuclear energy because of its cost overruns, delays and shutdowns, it is likely to play a major role in Premier Dalton McGuinty’s plans. Nuclear power could contribute a major portion of Ontario’s electricity. But it is expensive and it produces radiactive waste that is dangerous for thousands of years.

Energy Probe executive director Tom Adams would like to see clean-burning coal plants established. He prefers the latest technology – "super critical combustion" of coal, used in Europe and Japan. It requires very high pressures and temperatures to maximize efficiency and reduce greenhouse gases. In Europe, coal is being used for co-generation of heat and power. A common application is locating the plant in the centre of a city so it can provide large buildings in the core with heat.

Failure to deal with Ontario’s energy demands now would lead to brownouts and devastating blackouts. The dawdling McGuinty government must produce a good plan and soon.

Antonella Artuso
Toronto Sun
June 13, 2006

Premier Dalton McGuinty says he’s prepared to be judged by voters as his government gets set to announce controversial new nuclear power projects.

"I look forward to being judged on that," McGuinty said yesterday.

Energy Minister Dwight Duncan will formally respond to the Ontario Power Authority’s energy supply report today, explaining how the province will meet its electricity needs over the next two decades.

The report, released in December, calls for $72 billion to be spent on new electricity generation, including up to $40 million for nuclear power, to avoid shortages by 2013.

McGuinty would not provide details but has essentially acknowledged that new nuclear power will be part of the solution.

"We’ll look to solar, we’ll look to conservation, we’ll look to whatever sources of renewables we can, but at the end of the day, that is not enough," McGuinty said.

"And if we’re going to be responsible about this, if we’re going to ensure that the international investment community understands that we will in fact (have a) reliable source of electricity, we’ve got to take these things on. And our government will do that."

Tom Adams of Energy Probe said a new nuclear plant at the Darlington Nuclear Generating Station in Clarington remains the most viable option.

The Bruce nuclear power plant site may also be named but there are transmission concerns, he said. It’s also possible that Duncan could float the old Ontario Hydro Blind River option.

The solution that is aggressively being pursued in competitive electricity markets – so-called clean coal – is not on the table in Ontario.

Six environmental groups lined up yesterday behind a plan that would see coal and nuclear power phased out in favour of more conservation and renewables.

Shawn-Patrick Stensil of Greenpeace said nuclear power has proven unreliable and overpriced, and any attempt to build a new nuke plant in Ontario will be fought all the way.

"It might be trench warfare for 10 years, but we’re prepared to do that," Stensil said.

Antonella Artuso
Ottawa Sun
June 13, 2006

Toronto: An Ottawa-area site will be among locations considered for new nuclear reactors as the government embarks on a multi-billion-dollar strategy to tackle a potential electricity shortage, sources say.

Energy Minister Dwight Duncan will approve the Ontario Power Authority’s December recommendation that roughly half the province’s electricity should be powered by nuclear reactors 20 years from now – the same share nuclear holds today.

The Liberals won’t tell the OPA where they think plants should be built.

However, they will direct the agency to identify which of up to a half-dozen sites should be nominated for environmental assessments, sources say.

Deep river area

The list of potential sites includes Rolphton, near Deep River; Pickering and Darlington; and Tiverton, home to Bruce Power’s reactors.

Nanticoke in southwestern Ontario, the site of North America’s biggest coal-burning plant, and Wesleyville, east of Darlington, are also under consideration.

"It’s conceivable they might try a trial balloon in the Ottawa area, too," said Tom Adams, of watchdog group Energy Probe.

The OPA report calls for $72 billion in new electricity generation, including up to $40 million in new nuclear power, to avoid shortages by 2013.

Achieving this will require refurbishments of existing reactors.

At least one new plant with twin reactors is being considered, sources say.

Premier Dalton McGuinty has essentially acknowledged new nukes will be in the mix.

"We’ll look to solar, we’ll look to conservation, we’ll look to whatever sources of renewables we can, but at the end of the day that is not enough," McGuinty said.

"And if we’re going to be responsible about this, if we’re going to ensure that the international investment community understands that we will in fact (have a) reliable source of electricity, we’ve got to take these things on."

The solution that is aggressively being pursued in competitive electricity markets – so-called clean coal – is not even on the table in Ontario.

Six noted environmental groups lined up yesterday behind a plan that would see coal and nuclear power phased out in favour of more conservation and renewables.

Shawn-Patrick Stensil of Greenpeace said nuclear power has proven unreliable and overpriced, and any attempt to build a new nuclear plant would be contested.

"It might be trench warfare for 10 years, but we’re prepared to do that," Stensil said.

Antonella Artuso
Toronto Sun
June 14, 2006

The Ontario government is flicking the switch on a $46-billion electricity plan that will see refurbished and new nuclear reactors and continued coal-fired generation.

Seven Greenpeace anti-nuke activists wasted no time yesterday chaining themselves together in Energy Minister Dwight Duncan’s office. Just after 7 p.m. officials moved in to cut the locks of the protesters.

Duncan announced the overhaul of four existing units at Pickering B and the construction of one or two new reactors at an existing nuclear plant to be named later.

The four coal plants, which the Dalton McGuinty government promised to close by 2009, will stay open for an unspecified period and undergo emission-control improvements.

Duncan said his plan, which also calls for strong conservation measures, provides the best means of ensuring a stable and affordable supply of electricity.

Without action, the province will be short 10,000 megawatts by 2025, he said.

He acknowledged that this vision is not without controversy, especially the construction of new nuclear power, which many environmentalists have vowed to fight to the bitter end.

The costs of the plan, estimated at $72 billion, or $46 billion in today’s dollars, will be carried entirely by hydro ratepayers.

Energy Probe‘s Tom Adams said consumers can expect to see their rates increase by double-digit figures.

Peter Gorrie
Toronto Star
June 14, 2002

The province faces a long, tough slog – and court battles – over the nuclear power plan it announced yesterday.

Energy Minister Dwight Duncan appeared to skip nimbly over the issue of environmental assessments and other reviews of his decision to build or refurbish nuclear reactors able to generate up to 14,000 megawatts of electricity.

But even without opposition, the footing would be tricky.

And critics suggest they’ll do their best to trip him up.

The crucial issue, they say, is whether Duncan’s plan must undergo provincial environmental assessments, which allow debate on the need for new facilities and possible alternatives.

In his announcement, Duncan told Ontario Power Generation to prepare for assessments of individual refurbishment and new reactor projects.

But those reviews are apparently to be under federal law, and conducted by the Canadian Nuclear Safety Commission. That process is generally far less stringent than provincial assessments, critics say.

The federal process "is regarded almost as a joke," says Mark Winfield, a Toronto-based analyst with the Pembina Institute, an energy think tank. "It’s window dressing. It mostly exists so they can say we had an environmental assessment."

It "doesn’t have court-like procedures that would allow it to get to the bottom of the truth," says Norm Rubin, of Energy Probe.

At hearings, environmentalists would raise issues such as the impact of uranium mining and smelting, spills and air emissions from reactors, the remote possibility of meltdowns and the unresolved – and most likely enormously costly – issue of disposing of radioactive spent fuel. They would also point out that previous reactors went billions of dollars over budget and have a worsening record for reliability, and that wind, solar, biomass, conservation and other options are better for the environment and the economy.

Federal assessments don’t include discussion of options. They look only at specific projects and how to deal with any immediate impacts. "They’re scoped very narrowly," Winfield says. "That’s why (Queen’s Park) is so enthusiastic about it."

Lawyers for environment groups argue the province must use the Ontario process unless it is willing to take the political heat for explicitly exempting a project. In an odd twist, they say, wind, solar and other less controversial power projects – not to mention routine constructions such as bridges and culverts – are subject to the tougher provincial review.

Queen’s Park insists the law is clear: "Nuclear projects are exclusively the domain of the federal process," says Anne O’Hagan, spokesperson for Environment Minister Laurel Broten.

The two sides also dispute whether the overall electricity supply plan –which includes nuclear, natural gas and renewable power, as well as conservation measures – must undergo an environmental assessment.

That plan, to be prepared by the Ontario Power Authority following Duncan’s direction, "is conceptual. … It reflects broad government policy direction," O’Hagan says. "That means it’s not subject" to an assessment.

"Our legal opinion is … it’s subject to the Ontario Environmental Assessment Act," Winfield says.

Apart from likely court challenges on those issues, Duncan faces other hurdles.

The Ontario Energy Board will review the supply plan. The board generally examines whether plans or projects follow government directives, and do so in a prudent, efficient way that protects consumers.

The board will take about a year to assess the plan. Since the power authority isn’t expected to produce it until early next year, the review won’t be done until after the next provincial election, set for October 2007.

A provincial environmental assessment would take at least two years.

Federal assessments also take a year or two. Refurbishment projects would likely go through a quicker process called screening. Rebuilds would be subject to a full review. The nuclear safety commission can recommend the federal environment minister call for a public hearing by an independent panel. But that decision, which would create further delays, is the minister’s.

The federal process doesn’t start until the safety commission receives a complete proposal for a project, including the site and the size and style of reactor, says spokesperson Sunni Locatelli. So, if more than one company bids to build a reactor, assessment can’t start until the choice is made.

Antonella Artuso
Toronto Sun
June 15, 2006

Toronto: The province is flicking the switch on a $46-billion electricity plan that will see refurbished and new nuclear reactors and continued coal-fired generation.

Seven Greenpeace anti-nuke activists wasted no time yesterday chaining themselves together in Ontario Energy Minister Dwight Duncan’s office. Officials moved in to cut the locks of the protesters last night.

Duncan announced the overhaul of four existing units at Pickering "B" station and the construction of one or two new reactors at an existing plant to be named later at a cost of $3 billion. Darlington, east of Toronto, is the likely choice.

The four coal plants, which the Dalton McGuinty government promised to close by 2009, will stay open for an unspecified period and undergo emission-control improvements.

The minister said his plan, which also calls for strong conservation measures, is the best means of ensuring a stable and affordable supply of electricity. Without action, the province will be short 10,000 megawatts by 2025, Duncan said.

He acknowledged that this vision is not without controversy, especially the construction of new nuclear power, which many environmentalists have vowed to fight to the bitter end.

Hydro hike expected

The costs of the plan, estimated at $72 billion, or $46 billion in today’s dollars, will be carried entirely by hydro ratepayers.

Energy Probe‘s Tom Adams said consumers can expect to see their rates increase by double-digit figures as the government pursues expensive gas and nuclear power instead of more affordable "clean" coal.

"Dalton McGuinty is more pro-nuclear than even George Bush," Adams said.

NDP Leader Howard Hampton said the plan will also lead to dirtier air. Duncan countered by saying that under his plan, nuclear power capacity by 2025 would be 40% of Ontario’s power supply, down from 50% today.

Adam White, president of the Association of Major Power Consumers in Ontario, welcomed the "practical" response to the province’s electricity-supply problems. "(The) announcement demonstrates that the provincial government clearly understands the links between power reliability, prosperity and our quality of life," White said.

Rob Ferguson and Robert Benzie
Toronto Star
June 15, 2006

A blueprint to avert Ontario’s looming electricity crisis sets "aggressive" targets for energy conservation and clean, renewable power over the next 20 years, but nuclear power will continue to play a major and expensive role.

The province’s plan calls for building one or two new reactors at an existing site, likely Darlington, at a cost of $2 billion to $3 billion, and examining the feasibility of refurbishing existing nuclear units.

The plan, revealed yesterday, also calls for another delay in closing the province’s heavily polluting coal-fired generating plants.

To make the addition of nuclear facilities and the delay in closing the coal plants more palatable to the public, the government has increased its commitment to conservation and renewable energy. However, critics are warning that the government’s goals in those areas are vague and unrealistic.

Energy Minister Dwight Duncan said the Liberals will meet the growing need for energy with new nuclear generation capacity.

As well, Ontarians will be urged to double the amount of power saved through conservation efforts and the province will aim to double the amount generated through renewable sources, such as wind and hydroelectric power.

"There is nothing in this plan that does not have political overtones . . . yes, these are aggressive targets and we will move aggressively to meet them," said Duncan, whose government seeks re-election on Oct. 4, 2007.

Some of the plan highlights:

Tyler Hamilton
Toronto Star
June 17, 2006

Households and small businesses that use 10 per cent less electricity this summer would get a 10 per cent discount on their hydro bills under an ambitious conservation program being proposed by Toronto Hydro Corp.

The utility has asked the Ontario Energy Board for permission to launch its $5.6 million 10/10 program on July 15. If approved later this month, half-a-million Toronto Hydro-Electric System customers would be automatically enrolled in the three-month pilot, which is modelled after a similar initiative proven effective in California.

"We believe it’s a first of its kind in Canada," said Toronto Hydro spokesman Blair Peberdy.

"If customers reduce their energy consumption by 10 per cent over the summer months, we’ll rebate an additional 10 per cent on the bill. This is our first shot at trying to trigger a massive consumer reaction to the call for conservation."

Customers’ electricity usage will be compared against the summers of 2004 and 2005 between July 15 and Sept. 15. Peberdy said last summer was one of the hottest and the previous year one of the coolest, so the two periods will be averaged and used as a benchmark.

"We’ll be telling each customer what their target would be in terms of kilowatt-hours and here’s how you can reach that," he said.

The discount would be applied to the entire bill, including delivery charges and debt retirement, but excluding GST.

Toronto Hydro alerted the energy regulator of its intention on Tuesday, the same day the Ontario government announced plans to reduce the province’s electricity demand by 6,300 megawatts through conservation, doubling a previous recommendation by the Ontario Power Authority.

A week prior, the Independent Electricity System Operator, which manages Ontario’s power balance, revealed in a report that it overestimated the province’s electricity supply for this summer by up to 3,000 megawatts.

"Both of these developments underscore the heightened importance of electricity conservation in Ontario," Toronto Hydro stated in its formal application yesterday to the energy regulator.

In its application, Toronto Hydro said it anticipated that one third of its customers — about 165,000 households and businesses – would reach the 10 per cent target and benefit from the program.

Estimated electricity savings would amount to 45.6 million kilowatt-hours over the period, equivalent to taking about 5,000 homes off the grid for a year and amounting to $5 million in rebates. Customers who don’t achieve the target "will still have benefited from lower electricity bills," the application says.

Tom Adams, executive director at Energy Probe, called the initiative a "crude" instrument marked by good intentions.

"In a lot of cases, what we’re going to have here is some customers paying other customers to go to the cottage this summer," said Adams, explaining that some homeowners who happen to be away this summer will qualify for the rebate for doing nothing.

"This program will have some beneficial effects but will also have some unfairness effects that are clearly a drawback."

He said the utility would do more for conservation if it eliminated the practice of bulk metering in multi-occupancy buildings and stopped renting out flat-rate water heaters. He called the latter a "wasteful" program that hurts Toronto Hydro’s credibility as a conservation agency.

But providing incentives to conserve has worked in California, where since 2001 a similar program has helped the U.S. state save thousands of megawatts of peak power demand during critical winter and summer peaks.

But instead of operating under a three-month period, the California program rewarded participants on a month-by-month basis.

By lowering power usage by 20 per cent one month over the previous year, a homeowner received a 20 per cent discount for that same month.

Karen Howlett
Globe and Mail
July 18, 2006

The sweltering heat blanketing much of Southern Ontario pushed electricity consumption to its highest level this summer, forcing the province to rely on power from the United States.

Demand for power peaked at 25,898 megawatts yesterday afternoon, within striking distance of the record high of 26,160 megawatts in July, 2005.

The province’s electricity manager issued an emergency alert at 1:15 p.m., saying it had maxed out its own generating capacity and would be importing power from Michigan, New York and Quebec.

"The only thing that’s saving Ontario today is the importation of very expensive electricity from outside of the province," New Democrat Leader Howard Hampton said.

The province met the demand for electricity, thanks in part to a breeze yesterday afternoon that powered Ontario’s wind generators.

But the summer’s first big heat – the thermometer reached about 33 C in Toronto, a touch shy of the record of 34.4 set in 2002 – was a reminder of how the weather can push the system to the brink.

A report prepared by the Ontario Energy Board for the province’s electricity manager singles out the 10 worst days between May 1, 2005, and Oct. 31, 2005.

The report describes how the provincial Independent Electricity System Operator (IESO) coped with a series of challenges, including sweltering heat that caused demand to soar well above supply, congested transmission lines that made it difficult to deliver electricity, and generator breakdowns or labour disruptions that played havoc with its supply forecasts.

"It was certainly a summer that we’d never want to see again," said Terry Young at the IESO.

But industry observers say there is a real possibility the province could see a replay of last summer. The 101-page report by the energy board’s market-surveillance panel exposes just how fragile the province’s system has become.

Lack of long-term planning by previous governments has left Ontario facing a severe electricity shortage and relying on imported power from neighbouring states on many days.

"We are in virtually the same shape we were in last summer and that is very worrying," said Tom Adams, executive director of Toronto energy watchdog Energy Probe.

Mr. Young acknowledged that last summer confirmed a trend that has been emerging over the past five years: Demand for electricity in Ontario now peaks in the summer, when air conditioners are running full blast, rather than in the winter months.

Most of the worst days last year – those that resulted in the highest prices paid by the IESO to power-generating companies – were in the summer, when temperatures exceeded 30 C on 25 days. Electricity prices for the province were 60 per cent higher on average than in the summer of 2004.

So far this year, the province has had only a couple of bad days, including yesterday. The cost of buying electricity has averaged only 4.96 cents a kilowatt hour since Jan. 1 – well below the 5.8 cents to 6.7 cents that consumers pay, depending on consumption.

But on many days last summer, the cost of buying electricity on the open market far exceeded what the government charges consumers. Electricity generators offer to sell power to the IESO at a certain price, and the IESO accepts the cheapest offers first.

But when demand for electricity rises and power supplies become more scarce, the IESO is forced to pay higher prices.

Yesterday, the price peaked at 14 cents a kilowatt hour at 3 p.m.

The report also reveals that the IESO paid millions of dollars in fees last summer to import power from Michigan and New York and to keep generators running on days when demand soared.

Between May 1 and Oct. 31, it paid $400-million in fees, compared with $190-million in the same period in 2004. These fees included guarantees to importers to ensure that they sold their power to Ontario rather than to another jurisdiction.

The IESO’s Mr. Young said the manager has recently reduced some of the uncertainty associated with importing power by locking in purchase agreements a day ahead instead of the same day. This increases the certainty that the power will be available when the province needs it, he said.

To address the province’s electricity shortage, Premier Dalton McGuinty has an ambitious plan that includes spending up to $40-billion on nuclear power plants.

But it will take at least a decade before a new reactor is up and running, and Mr. Hampton criticizes the government for not doing enough to bring on new sources of power sooner or encourage consumers to use less electricity.

"Part of the nub of what the OEB report is saying is that the market doesn’t work very well at all."