Energy Probe

Tom Adams, Letter to the Editor, Toronto Star

July 19, 2006

Re: "Son of Ontario Hydro starting to make good," July 19, 2006

To support his argument that Ontario Power Generation (OPG) has turned around its history of bad behaviour, Ian Urquhart claims that OPG’s credit rating has been upgraded and it has completed the refurbishment of Pickering 1 within $100 million of budget. The first claim sounds important but is really empty praise and the second claim is wrong.

As Standard & Poor’s explained in their most recent credit assessment of OPG, its debt was upgraded because that the Liberal government now funds OPG directly with taxpayer-back borrowing.

Urquhart’s recounting of Pickering nuclear history is faithful to the Energy Minister’s spin but not the facts. In March 2004, a Liberal-appointed committee chaired by former federal Minister John Manley and including OPG’s chairman Jake Epp recommended completing the Pickering 1 refurbishment. The final cost of the Pickering 1 refurbishment was $195 million above that first Liberal promise. It is also noteworthy that the project was completed five years and five months late relative to the original schedule.

Tom Adams, Executive Director, Energy Probe

Son of Ontario Hydro starting to make good

by Ian Urquhart, Toronto Star, July 19, 2006

Ontario Power Generation (OPG) is everybody’s favourite whipping boy. The government-owned successor to Ontario Hydro and producer of three-quarters of the province’s electricity, OPG has been called everything from "Ontario’s Enron" to a "monumental mess."

In late 2003, the incoming Liberal government fired the three most senior executives at OPG on the heels of a report that the retrofit of a single reactor at the Pickering nuclear plant had come in $900 million over budget and three years behind schedule.

There were whispers at the time of the "B word" – bankruptcy – and internal morale plummeted. Suggestions of a possible turnaround at OPG were dismissed.

Wrote Terence Corcoran in the National Post: "Vladimir Putin may have less trouble turning around the Russian economy."

Well, turn around OPG has. Last year, its profit rose to $366 million from $42 million the year before.

Its credit rating has been upgraded. It has brought in the retrofit of a second Pickering reactor on schedule and within $100 million of budget. It has launched major initiatives to build a natural gas generating plant on Toronto’s waterfront, to expand the output from Niagara Falls with a new tunnel, and to redevelop the hydroelectric stations on the Mattagami River.

And in the annual report last month from the Canadian Nuclear Safety Commission, OPG got high marks for safety in the operation of its reactors – higher than its private sector competitor, Bruce Power.

Says Energy Minister Dwight Duncan: "One of the untold stories of the last two years is the remarkable comeback of OPG."

Duncan takes part of the credit for the turnaround, through the appointment of a new board after the Liberals took power.

"One of the things I did when I appointed that board is to bring in a lot of people … who have a lot of experience in nuclear."

Credit is also due to: Jake Epp, the Mulroney-era politician whom the Liberals appointed as chair of the board; James Hankinson, the blunt-talking businessman who was named OPG’s chief executive officer last year; and Richard Dicerni, the veteran civil servant who served as acting CEO during a difficult transition period.

Last month, the government rewarded OPG by calling on it to pursue approval from the nuclear safety commission for a new nuclear reactor facility.

"I am directing OPG … to begin a federal approvals process for new nuclear units at an existing site," wrote Duncan to Hankinson. It is unlikely that letter would have been written two years ago.

"Overall I see the government’s announcement as it pertains to OPG as a vote of confidence in our ability to operate our facilities efficiently and responsibly," says Hankinson.

Duncan cautions that the decision on who should operate a new nuclear facility has not yet been made by the government and that the responsibility could still be given to Bruce Power or some other private-sector operator.

"We (the government) are not there yet," says Duncan.

"We will, over the course of the next weeks and months, be having those kinds of discussions."

Says Duncan Hawthorne, CEO of Bruce Power: "If the premier really wants to isolate the ratepayer from the risk, then the private sector might be the way to do it."

But the fact is that the longer that OPG carries the ball on a new nuclear facility, the more difficult it will be to make a hand-off to another player.

In a panel discussion earlier this year, Ken Pereira, executive vice-president of operations for the nuclear safety commission, threw cold water on the idea of transferring responsibility for a new facility midway through the approvals process.

"I would expect that Canadians who are engaged in that process would like to feel that the applicant is one who has a vested interest in constructing and operating the facility and is committed to it," said Pereira. "So, if at the front end they see that there’s only an entity there that is used to kick-start the process, how are they going to regard that in terms of commitment to that facility, that site, for the long term? … Because we’re talking about significant projects here, not operations that run for one or two years."

Translation: If OPG starts the process, it may have to finish it.

And that’s a prospect that is no longer unthinkable at Queen’s Park.

Canadian Press
The Globe and Mail
July 30, 2006

Toronto: As temperatures soar across the country, Canadians are being reminded to dim the lights, turn down the air conditioning and join provincial governments in embracing a culture of energy conservation.

But while most critics agree people have good intentions, they say preserving the country’s fragile electricity resources is still relatively low on the national priority list.

The call to conserve electricity is expected to be particularly urgent in Ontario next week as forecasters predict the temperature will hover around 30C for several days.

Tom Adams, executive director of Energy Probe, acknowledged that appeals to the public have been well-received to date, but said the strategy will eventually fall on deaf ears.

"I think it’s fair to say that as a long-term strategy to keeping the lights on, appeals to the public are likely to wear off," Mr. Adams said in an interview.

"I don’t think we can expect consumers to be untiring when it comes to being asked to inconvenience themselves."

Jim Nelson, marketing manager with BC Hydro and the man responsible for promoting the province’s Power Smart conservation effort, agreed customers are only willing to go so far.

"My observation is people want to do the right thing and say it’s important, but given all the pressures of their home life or their business, it does end up not being a top priority, and that’s just natural," Mr. Nelson said.

The Power Smart strategy was designed to make it easier for customers to participate in a number of energy conservation projects, the most successful of which has been a program to distribute compact fluorescent lightbulbs to households, Mr. Nelson said.

Thanks largely to that program, Mr. Nelson said roughly 50 per cent of BC Hydro’s residential customers have taken part in Power Smart programs since its launch in 2002.

Similar giveaway programs have been implemented in other provinces, including Ontario, but Mr. Adams and other critics say they fail to address key conservation issues.

Mr. Adams said customers frequently negate the effects of the new energy efficient bulbs by leaving them on longer than they would have before.

Such programs, which are frequently endorsed by the provincial government, are impractical and ineffective, said Ontario Conservative Leader John Tory.

"The fact we’ve had demand that has reached new records or approached new records several times this year already speaks for itself in terms of whether you have created a culture of conservation in Ontario," Mr. Tory said.

"My argument would be we have not."

Terry Young, communications director with Ontario’s Independent Electricity System Operator, took a more optimistic view of customer engagement with conservation efforts.

The IESO monitors daily power usage across Ontario 24 hours a day, and while he did not provide statistics, Mr. Young said there has been some improvement in the province’s power situation since this time last year.

“What we’re seeing is that when demand is high, businesses are responding (to appeals), customers are responding (and) there is a growing awareness of the importance of conserving."

Mr. Young added the IESO has not had to issue any official requests to cut back on power consumption this summer compared to 12 such occasions in the hottest months of 2005.

Mr. Adams attributed the improvement to an increased power supply and lower temperatures rather than better consumer conservation practices.

Mr. Young agreed the power supply is expanding thanks to the presence of new hydro plants as well as wind generators providing a new source of green power.

An independent company, Bullfrog Power, is also making inroads into the market by offering customers the chance to light their homes with environmentally friendly electricity for an extra dollar a day.

Tom Heintzman, Bullfrog’s president, cited the 1,000 residential customers the company attracted in less than a year as proof Canadians care about preserving electricity resources.

But Mr. Adams remained skeptical about long-term prospects for Canada’s power grids.

"In the interim, consumers can really make a difference by being as careful as possible with how they use electricity," he said. "At the same time, I think our official agencies need to rethink their whole approach."

Canadian Press
Ottawa Sun
July 31, 2006

Feeling the heat, Canadians are being reminded to dim the lights, turn down the air conditioning and join governments in embracing a culture of energy conservation.

While most critics agree people have good intentions, they say preserving fragile electricity resources remains a relatively low priority.

The call to conserve power is expected to be particularly urgent in Ontario this week, with 30C heat in the forecast.

Tom Adams, executive director of watchdog group Energy Probe, said while appeals to the public have been well-received, the strategy will eventually fall on deaf ears.

"As a long-term strategy to keeping the lights on, appeals to the public are likely to wear off," Adams says. "I don’t think we can expect consumers to be untiring when it comes to being asked to inconvenience themselves."

Bulbs don’t work

Adams and other critics say giveaway programs, such as fluorescent lightbulbs for households, fail to address key conservation issues.

Adams says customers negate the effects of the new energy efficient bulbs by leaving them on longer than normal bulbs.

Such programs, which are frequently endorsed by the provincial government, are impractical and ineffective, argues Ontario Conservative Leader John Tory.

"The fact we’ve had (power) demand that has reached new records or approached new records several times this year already speaks for itself in terms of whether you have created a culture of conservation."

Terry Young, communications director with Ontario’s Independent Electricity System Operator, says "there is a growing awareness of the importance of conserving."

He notes the IESO has not had to issue any requests to cut back on consumption this summer compared to 12 such occasions in 2005.

Adams attributes the improvement to an increased power supply and lower temperatures rather than better conservation practices.

Reuters Canada

August 1, 2006

Ontario’s Independent Electricity System Operator issued a power warning on Tuesday as blistering heat and humidity fueled power demand to record levels, urging consumers to curb electricity use until 8 p.m. EDT to ease the strain on the bulk system.

"We are going to be relying on imports over the peak (afternoon) hour but at this point, we are anticipating being able to meet demand," said Lisa Pearson, an IESO spokeswoman.

As eastern North America bakes in searing heat, the Ontario grid operator website showed that provincial power use soared to record levels at midday on Tuesday.

. . . By noon, demand had already reached 26,331 megawatts.

Ontario’s grid operator hasn’t yet asked industrial users to reduce load as an emergency measure, though it has told them this is possible, Pearson said.

. . . While the grid will be under stress on Tuesday and Wednesday, "the good news is the power system is in much better shape than last year right now," said Tom Adams of Energy Probe, a veteran electricity market watcher.

"They’re not digging deep into their toolbox of emergency measures just yet."

Although electrical loads are comparable to last year, the key factor helping Ontario meet demand this year is additional supply, Adams said.

There’s a "big difference" in hydrology conditions, leading to better hydroelectric generating capability, while the return to service of the 515-MW Pickering nuclear unit 1 has lent a major helping hand, Adams said.

Read the full text

Deirdre Healey
Hamilton Spectator
August 1, 2006

With mercury levels expected to hit between a scorching 34 to 36 Celsius today, hydro officials anticipate residents to blast their air conditioners, sucking up more energy than they have ever used before.

Ontario’s all-time energy consumption record sits at 26,160 megawatts, set a year ago on July 13.

If everything goes according to the weather forecast – a hot, sunny couple of days with temperatures above 30 C and the humidex sitting in the mid-40s – then air conditioners will draw record levels of energy, said Terry Young, Ontario’s Independent Electricity System Operator spokesperson.

The province hit a consumption high for 2006 with an hourly rate of 26,092 megawatts yesterday.

"We are looking at a record being set tomorrow and it will be tight as far as energy supply."

If the high temperatures aren’t causing enough discomfort, a smog advisory has also been issued for today and possibly tomorrow. This is the ninth smog advisory for 2006, down from just over 30 at this time in 2005.

Yesterday, Henderson Hospital was already experiencing an increase in the number of people visiting the emergency department with respiratory problems. Ontario’s Ministry of Environment is recommending people reduce exercise and stay indoors.

Energy had to be imported yesterday, Young said. And the same will likely happen today and tomorrow.

"We don’t have enough power to handle the current consumption," he said.

Despite government energy conservation campaigns, consumption is expected to continue rising, said Tom Adams, executive director of Energy Probe, a national consumer and environmental think-tank.

"A certain amount of people are fed up with the conservation message. It is beginning to fall on deaf ears."

Energy consumption also continues to climb because a growing population and healthy economy mean more people are installing air conditioners in their homes.

The heat wave hovering over California for the past two weeks has made its way to southern Ontario, bringing with it above 30 C temperatures and air pollution.

"It’s as hot in Miami as it is in Hamilton," says David Phillips, senior climatologist with Environment Canada.

Today’s forecast of 34-36 C would smash the old record of 33.2 C for Aug. 1, set in 1995. Tomorrow’s forecast of 30 C falls just short of the record of 32.9 C for Aug. 2, set in 1988.

The heat is expected to break Thursday and drop to a cooler 25 C.

"It will feel like jacket weather on Thursday compared to the heat we have had," Phillips said.

While there has been plenty of groaning and complaining over the recent heat, Phillips says we shouldn’t be surprised by it. The last week of July and first week of August are typically the hottest days of the year.

"These are the dog days of summer."

The hottest numbers

33.2 C – Record temperature for Aug. 1.

34-36 C – Today’s predicted high.

32.9 C – Record for Aug. 2.

33 C – Tomorrow’s forecast.

20.8 C – Average temperature in Hamilton for month of July.

33.7 C – Hottest July temperature.

37.4 C – Hottest temperature in Hamilton occurred on July 7, 1988.

42.2 C – Hottest temperature across Canada. Recorded in Atikokan in northern Ontario on July 11-12, 1936.

CBC News
August 14, 2006

As Monday marks the third anniversary of the blackout that cut power to 50 million people in Ontario and parts of the northeastern United States, some energy experts say there’s no guarantee it won’t happen again.

Some critics blamed the problem three years ago on a lack of enforceable rules governing the many independent power producers on the gird. They say the same problems remain to this day.

J.A. Casazza, a former executive with a New Jersey-based power company and the founder of PEST (Power Engineers Supporting Truth), says there are many different power suppliers all connected to the same grid, and they don’t all operate to the same standards.

That, he says, is a recipe for another blackout.

"When you have a lot of different participants trying to make a power system work, you have a great deal of problem co-ordinating, particularly when an emergency occurs," says Casazza.

Ontario’s independent suppliers meet standards

Terry Young, spokesperson for the Independent Electricity System Operator, which monitors the province’s power system, says more independent suppliers in Ontario don’t put the system at a greater risk.

"All of these companies coming into the industry are aware of the standards under which they must operate," says Young.

Young points out that stronger standards for electricity producers have been introduced since the blackout.

Blackout a wake-up call for suppliers

Tom Adams, executive director of Energy Probe, says the blackout was a wake-up call to power providers.

Since then, he says all the major transmission utilities have invested money in upgrading their systems but adds that stepped up conservation efforts are still needed to help prevent a large-scale shortage.

The cause of the blackout, according to a Canada-U.S. joint task force, can be traced back to a power plant in Ohio.

FirstEnergy’s East Lake plant shut down unexpectedly on Aug. 14, 2003, triggering a series of problems on its transmission line that set off the cross-border blackout.

Residents in Ontario, parts of New York, New Jersey, Connecticut, Michigan, Pennsylvania and Massachusetts, were left in the dark.

The Hamilton Spectator
August 14, 2006

Three years to the day after 50 million people in Ontario and parts of the north-eastern United States were plunged into darkness, energy watchdogs say improved reliability measures make a repeat of the blackout unlikely, but warn conservation measures are still needed.

"All of the major transmission utilities have invested significant dollars in upgrading their system," said energy critic Tom Adams, executive director of Energy Probe. "We still have a ways to go but there is meaningful progress."

When the lights went out on a Thursday afternoon on Aug. 14, 2003, it was the first notice some Ontario residents got of how reliant the province is on the U.S. for its power.

A failure on transmission lines in Ohio set off a chain reaction that knocked that state, Ontario, parts of New York, New Jersey, Connecticut, Michigan, Pennsylvania and Massachusetts off the power grid.

A 2004 audit by the North American Electric Reliability Council found Ontario’s Independent Electricity System Operator to be a model for other system operators.

Despite that Hydro One, Ontario’s largest utility, has thrown additional money at grid maintenance, putting about $277 million into capital expenses in its 2007 budget, which is $100 million more than in 2003.

Sheryl Nadler
Hamilton Spectator
August 21, 2006

Hamilton will move one step closer to curbing soaring energy consumption today with the launch of a new billing pilot project that promises to change how customers use – and pay for – electricity.

Horizon Utilities will begin installing time-of-use meters in several Hamilton-area neighbourhoods this morning that will eventually reward customers for using power at low-peak times and penalize those guzzling electricity during high-demand hours.

The new "smart meters" will replace existing meters in 7,500 homes by the end of October.

Customers will not see a change in their bills for some time while hydro officials monitor the technology.

A date has not yet been fixed for the new billing structure, but the Ontario government hopes to have the meters installed in all homes and small businesses across the province by 2010.

That could translate into savings for people willing to plug-in at off-peak times.

"Just getting a smart meter is not going to save customers money," cautioned Horizon Utility vice-president of marketing Eileen Campbell.

"Customers are going to have to change their behaviour."

That means anything from setting your air conditioner a few degrees warmer during the afternoon, to turning the dishwasher on before bedtime, or saving that load of laundry for the weekend.

Once time-of-use rates come into effect, there will be different electricity rates for off-peak, mid-peak and on-peak periods, depending on the time of year.

In the summer months, the highest charge per kilowatt hour will be 10.5 cents on weekdays from 11 a.m. to 5 p.m.

Winter will see that period shift from 5 p.m. to 8 p.m., but will also include the hours between 7 a.m. and 11 a.m.

Customers will pay up to a third less for using appliances during low-demand overnight hours, starting at 10 p.m.

Early pilot projects indicated that residents could cut their power bill by as much as 30 per cent by changing their habits.

But Energy Probe executive director Tom Adams warned at the time that number may be inflated, particularly for smaller households.

He added that larger homes with pools, hot tubs and many electronic gadgets would notice the largest difference in their hydro bills.

Campbell said Horizon Utilities could not yet predict the kind of savings in store for Hamiltonians.

She said results from the pilot project would help generate those numbers.

"It will all depend on the behaviour of the people in the house."

The cost of the new meters will be downloaded to customers on their monthly bills.

The following neighbourhoods have been selected for the pilot project:

* Hamilton – Westmount, Rosedale and the area bounded by Upper Gage Avenue to Upper Ottawa Street between Stone Church Road East and the Lincoln M. Alexander Parkway.

* Dundas – areas around Davidson Boulevard and Huntingwood Avenue.

A St. Catharines neighbourhood will also be included.

Measures usage by the hour

* The "smart meter" looks similar to the old one and fits into a standard meter base. But the technology is entirely different.

* Instead of measuring how much electricity consumers use over the course of a two-month billing period, a computer chip inside the smart meter records usage by the hour.

* The new meters work on a two-way wireless communication system, sending data to a "collector" meter posted on a pole that gathers information around 500 surrounding residences or businesses.

* The by-the-hour data is then transmitted to a central computer system that generates billing.

Sheryl Nadler
Sheryl Nadler
August 21, 2006

Hamilton will move one step closer to curbing soaring energy consumption today with the launch of a new billing pilot project that promises to change how customers use – and pay for – electricity.

Horizon Utilities will begin installing time-of-use meters in several Hamilton-area neighbourhoods this morning that will eventually reward customers for using power at low-peak times and penalize those guzzling electricity during high-demand hours.

The new "smart meters" will replace existing meters in 7,500 homes by the end of October.

Customers will not see a change in their bills for some time while hydro officials monitor the technology.

A date has not yet been fixed for the new billing structure, but the Ontario government hopes to have the meters installed in all homes and small businesses across the province by 2010.

That could translate into savings for people willing to plug-in at off-peak times.

"Just getting a smart meter is not going to save customers money," cautioned Horizon Utility vice-president of marketing Eileen Campbell.

"Customers are going to have to change their behaviour."

That means anything from setting your air conditioner a few degrees warmer during the afternoon, to turning the dishwasher on before bedtime, or saving that load of laundry for the weekend.

Once time-of-use rates come into effect, there will be different electricity rates for off-peak, mid-peak and on-peak periods, depending on the time of year.

In the summer months, the highest charge per kilowatt hour will be 10.5 cents on weekdays from 11 a.m. to 5 p.m.

Winter will see that period shift from 5 p.m. to 8 p.m., but will also include the hours between 7 a.m. and 11 a.m.

Customers will pay up to a third less for using appliances during low-demand overnight hours, starting at 10 p.m.

Early pilot projects indicated that residents could cut their power bill by as much as 30 per cent by changing their habits.

But Energy Probe executive director Tom Adams warned at the time that number may be inflated, particularly for smaller households.

He added that larger homes with pools, hot tubs and many electronic gadgets would notice the largest difference in their hydro bills.

Campbell said Horizon Utilities could not yet predict the kind of savings in store for Hamiltonians.

She said results from the pilot project would help generate those numbers.

"It will all depend on the behaviour of the people in the house."

The cost of the new meters will be downloaded to customers on their monthly bills.

The following neighbourhoods have been selected for the pilot project:

* Hamilton – Westmount, Rosedale and the area bounded by Upper Gage Avenue to Upper Ottawa Street between Stone Church Road East and the Lincoln M. Alexander Parkway.

* Dundas – areas around Davidson Boulevard and Huntingwood Avenue.

A St. Catharines neighbourhood will also be included.

Measures usage by the hour

* The "smart meter" looks similar to the old one and fits into a standard meter base. But the technology is entirely different.

* Instead of measuring how much electricity consumers use over the course of a two-month billing period, a computer chip inside the smart meter records usage by the hour.

* The new meters work on a two-way wireless communication system, sending data to a "collector" meter posted on a pole that gathers information around 500 surrounding residences or businesses.

* The by-the-hour data is then transmitted to a central computer system that generates billing.

Vik Kirsch
Guelph Mercury
September 30, 2006

Guelph Hydro Inc. announced yesterday it would wind down operations at Selectpower, one of its subsidiaries, this year.

Board chair Paul Truex said the retailer wasn’t profitable and a turnaround wasn’t coming. "We’re simply phasing out of these businesses because we’re not making money at it," he said.

Selectpower was a power retailer, selling wind power, air conditioning units, hot water heaters and geothermal systems. It was created in 2000, following the deregulation of Ontario’s electricity market in late 1998.

Truex said he hopes some of Selectpower’s nine employees will be absorbed into other Guelph Hydro operations or move on to any buyer of Selectpower assets. They’ve all been offered severance packages, he added.

The closure follows a review concluding the parent company should concentrate on its core business. Guelph Hydro distributes power to 40,000 customers.

Selectpower’s demise wasn’t a surprise to Energy Probe executive director Tom Adams.

"I’m not crying about it, either. I think it’s good for utilities to stick to their knitting," Adams said. After deregulation came in, some municipal utilities entered the field. But Adams, whose Toronto organization closely monitors the energy field, said municipal utilities have a poor track record.

City Councillor Dan Moziar, who has an interest in energy issues, said Selectpower simply never thrived.

"It doesn’t surprise me they pulled the plug," Moziar said.

Selectpower was initially given three years to show it could be viable, Moziar recalled. When that didn’t happen, the time frame was extended.

"Obviously, the situation didn’t improve," he said yesterday.