Energy Probe

Shawn McCarthy
The Globe and Mail
November 30, 2006

Cameco Corp. says it is laying the groundwork for an expected boom in uranium demand from China, as the Chinese and Canadian governments pursue talks that would facilitate Canadian exports to the nuclear weapons state.

But Canada is lagging Australia, its main competitor in the uranium exporting business, which signed a deal earlier this year with its Asian neighbour that will allow for exports and for Chinese investment in uranium mining there.

On his trip to Beijing earlier this month, Natural Resources Minister Gary Lunn agreed with his Chinese counterparts to pursue negotiations on a framework deal – including issues of non-proliferation – that would open the door for Canadian uranium sales to China.

Saskatoon-based Cameco, the world’s largest uranium producer, has encouraged Ottawa to reach a deal with the Chinese, and is maintaining its own marketing effort. But it is not expecting a sudden boom in sales.

"We see China as more of a long-term opportunity because of its ambitious nuclear energy program," Cameco’s Lyle Krahn said Thursday. "And we have established regular contracts with them, and meet with them periodically."

He said China consumes about three million pounds a year of uranium, less than 2 per cent of the world market. That demand will grow exponentially if the country proceeds with plans to build 18 new reactors over the next decade. It now has nine reactors in operation.

"Whether we sell to China or some other company sells to China, ultimately [its growing demand] takes uranium out of the market, and ultimately is beneficial to us anyway," Mr. Krahn said.

China is a signatory of the Non-Proliferation Treaty, and Australia’s deal to export uranium to the rapidly growing Asian power provoked little controversy in the United States. Critics there were far more concerned about the U.S. government’s decision to begin nuclear co-operation with India, which is not a member of the treaty.

But Norm Rubin, of Toronto-based Energy Probe, said the sale of uranium to any nuclear weapons state is immoral and wrongheaded.

"If you think nuclear weapons are part of the problems of the world and one of the threats to civilization, then the idea of sharing the life blood of that stuff with the people who are using that life blood for a pursuit you perceive as evil makes you evil."

Mr. Rubin said he doesn’t accept the argument from Cameco and other uranium exporters that they are selling only for the civilian purposes of nuclear energy. The imported uranium allows military powers to devote their own sources of uranium to supply weapons systems, he said.

The anti-nuclear activist also questioned the projections of a nuclear renaissance, noting that very few of the reactors that the industry claim will come on stream in the next decade have actually received approval.

Cameco, itself, sounds a cautionary note, even as it forecasts a major jump in reactor construction, with 82 new reactors expected to be built by 2015.

"It is difficult to know whether these trends and the national debates on the long-term future of nuclear power will result in more or less favourable conditions for the nuclear industry," the company said in its most recent annual report.

One analyst predicted the market for uranium will continue to boom after years of low prices discouraged production and boosted consumption. Spot prices for uranium have risen 75 per cent this year to $63 (U.S.) a pound and show no signs of easing, said Jeff Combs, president of Ux Consulting Co., which tracks uranium markets.

Mr. Combs said U.S. utilities have concerns about China’s growing appetite for uranium because the Asian giant has the capacity to lock up supplies through long-term contracts, thereby sending prices on the spot market even higher.

"It would just put pressure on a market that is already suffering from underproduction," Mr. Combs said. "It’s like other things: The Chinese basically are going out and buying oil and steel and a lot of other commodities, and driving up prices."

Oilweek Magazine
December 11, 2006

Ontario’s hydro companies will be kept on a tighter leash now that the province is on the hook for $3 million in severance for the chief executive of transmission giant Hydro One, Premier Dalton McGuinty said Monday.

The province will be keeping a close eye on the Hydro One board to ensure executive salaries and expenses are kept under control in the wake of a scathing report by Ontario’s auditor general, McGuinty said.

Former chief executive Tom Parkinson resigned last week after the auditor exposed $127 million in Hydro One corporate card charges that were approved without proper documentation, including $45,000 Parkinson charged to his secretary’s credit card.

"We will work more closely with the board to ensure that Mr. Parkinson’s successor sets the appropriate tone of accountability for Hydro One," McGuinty said, adding the utility must use taxpayer dollars carefully.

The governing Liberals will also be keeping close watch to ensure the next CEO’s salary is reasonable, McGuinty said.

"These are highly sophisticated organizations," McGuinty said of Hydro One and Ontario Power Generation. "They require exceptionally talented people to provide leadership. But at the same time, they are public organizations and we’ve got to be accountable ultimately to taxpayers."

Parkinson earned a $780,000 salary in 2005, plus $702,000 in bonus incentives and $130,000 in other compensation, including a $40,000 "executive allowance." Part of the mortgage on his home in Oakville, Ont., west of Toronto – $125,000 – was also paid by the company.

While Parkinson’s $3-million severance has been met with anger and outrage, McGuinty said it was the cheapest way to get rid of Parkinson.

Former CEO Eleanor Clitheroe filed a $30-million wrongful dismissal lawsuit after she was fired in 2002 amid a public outcry over lavish spending and her $2.2-million salary. The case is still before the courts.

"It is explosive and it’s touched a nerve with Ontarians," Energy Minister Dwight Duncan said of the auditor’s findings. "We want to make sure that, whatever we do, we get it right."

But he said the utilities are taking steps to address the problems.

At Ontario Power Generation – employees there charged $6.5 million to corporate credit cards without receipts and spent $8,000 on leather jackets for long-serving employees, the auditor found – the system of tracking expenses has been upgraded and expensive gifts have been banned.

Critics say the government isn’t doing nearly enough to change the culture at Ontario’s utilities. Conservative Leader John Tory said few people get severance when they quit a job, let alone when they leave under "a cloud."

Vowing to keep a closer eye on Hydro One’s board is nothing but a "deathbed repentance," Tory said.

"This man presided over a company where there is a litany of abuse of ratepayer and taxpayer money and some question about his own expenses," he said." He then quit under a cloud – I’m wondering why he got paid anything."

NDP Leader Howard Hampton said the government hasn’t done anything to solve the underlying problems at Hydro One. The board – which approved Parkinson’s expenses and accepted his resignation with "deep regret" –is still there, he said.

The government should have a public inquiry into Hydro One to examine how disproportionate executive salaries and perks are, Hampton said.

"They’re not going to do that," Hampton said. "I don’t think you’re going to see much change."

Still, some say more government interference will only hurt the province’s utilities. Tom Adams, executive director of Energy Probe, said Parkinson was getting paid appropriately and was only fired because of the political firestorm created by the auditor’s report.

With Hydro One under a political microscope, Adams said the company will end up with a CEO who is more interested in pleasing the "political whims of the day" than running a profitable utility.

"We’ve seen a lot of this in the past of political supervision by people who don’t know the business at all," he said. "It never works out well."

Alan Findlay

December 21, 2006

 Natural Resources minister says Alberta oilsands will soon be nuclear-powered 

Nuclear power in the oilpatch is just a matter of time, according to Canada’s Natural Resources Minister Gary Lunn.

Speaking to Sun Media from Victoria yesterday, Lunn said he’s very keen to see a new partnership between Crown corporation Atomic Energy of Canada Limited and a private Alberta company to build a Candu-reactor to power oilsands extraction.

"It’s not a question of if, it’s a question of when, in my mind," said Lunn. "I think nuclear can play a very significant role in the oilsands. I’m very, very keen."

Having toured nuclear plants like Bruce Power’s station on the shore of Lake Huron, Lunn said he believes nuclear power can help replace natural gas and other fossil fuels currently being burned to help extract bitumen from the oilsands.

"On this specific file, I’ve had discussions this week," said Lunn, declining to give more detail. "It’s absolutely emission free. It’s CO2 free."

Lunn’s comments come as AECL and Energy Alberta Corporation pitch oilsands companies on the merits of nuclear power as production rapidly expands.

The concept has generally been given a chilly reception within industry. Groups such as the Canadian Heavy Oil Association have been skeptical in part because of the scope and multibillion-dollar cost of a nuclear project.

But officials from both the AECL and Energy Alberta say interest is growing.

A public opinion survey commissioned last year suggested only 40% of Albertans favoured the notion of building nuclear power, but another 30% were neutral to the idea.

The suggestion that 70% of Albertans aren’t averse to nuclear power in their backyard has generated interest within industry.

"The interest level has peaked," said David McColl, in charge of business development for Energy Alberta.

One possibility being discussed is a nuclear plant that would heat steam for oil extraction and also power electricity generation, McColl said.

Energy Probe‘s Tom Adams said the lowering price of natural gas and innovative, non-nuclear projects in the works will take the shine off atomic projects in Wild Rose country.

"I think that the oilsands people are not nearly as desperate as they used to be," said Adams, who is an outspoken critic of nuclear power.

Sierra Club of Canada executive director Stephen Hazell criticized the AECL and Alberta Energy initiative for not being more active in ongoing provincial consultations on managing Alberta’s growing oil and gas sector.

In a departmental memo obtained by Sun Media through an Access to Information request, Lunn is advised to keep a low profile on the issue of nuclear energy in Alberta because of its sensitivity.

Lunn said he had never seen the memo.

"I get memos I don’t always agree with," he said.

April Lindgren
Canada.com
January 31, 2007

If the federal government is serious about reducing greenhouse gases, it should put money into an east-west electricity grid that will reduce reliance on coal-fired power in Ontario and spur economic development in other provinces, Energy Minister Dwight Duncan said Tuesday.

"They’re talking a good game on climate change, they want to reduce greenhouse gas emissions, this is a great way to do it," Duncan told reporters after calling for the federal cash in a speech to power company executives from across the country. "It would allow us to get out of coal with more certainty."

Ontario’s Liberal government promised in the 2003 election to rid the province of the coal-fired electricity generation that makes up about one-third of all locally generated power. The dearth of replacement electricity, however, has delayed the initiative until at least 2014.

Noting that he has been calling for the creation of "the railway of the 21st century," Duncan said there has been lots of talk but little action.

"I am calling on the federal government to demonstrate its commitment to fighting climate change by working with us, and the other provinces, to build the transmission link that will secure our energy supply as a country, lead to the development of new clean energy projects, and bind our country as the railway did over 100 years ago," he said in his speech.

"It’s real, it’s there. It benefits Newfoundland. It benefits Quebec. It benefits Manitoba. It benefits Ontario."

Duncan said federal funding of a national grid is required because "it’s expensive and without federal participation (on) development of transmission, the economics of it are marginal."

Ontario has been negotiating with Manitoba to purchase power generated by the proposed northern Conawapa dam development. Transmitting the electricity through northern Ontario to points south where demand is the greatest, however, would cost between $700 million and $1.5 billion depending on the balance of line upgrades and new transmission line construction.

Duncan’s vision includes improved transmission links between hydro-electric projects in Labrador and the rest of Canada as well as improved connections between Manitoba’s hydro-electric resources and Alberta’s oilsands. He plans to pitch the idea once again tonight when he meets in Toronto with federal Natural Resources Minister Gary Lunn and to his Newfoundland and Manitoba counterparts in the coming weeks.

Tom Adams, executive director of the watchdog group Energy Probe, was dismissive of Duncan’s call to national action.

"It’s always been a practice by provincial governments that get into trouble to try and get the federal government to bail them out," he said. "This is just window dressing for him as he looks for a way to pay for a totally uneconomic transmission system to bring power from remote areas into Ontario."

Adams questioned the efficiency of transmitting power over long distances.

"The equipment costs a vast amount of money – we’re talking a couple million dollars per kilometre," said Adams. "Secondly, power that is carried long distances fades over the distance and third, long spindly transmission connections create a reliability risk. All of which adds up to a good reason to make your power closer to home."

Ontario’s energy crunch has eased with the addition of 3,000 megawatts of new supply over the past three years; another 10,000 megawatts are in various stages of development.

The province’s ability to live within its means will require an aggressive conservation effort as well as the construction of two new nuclear power plants.

Antonella Artuso
The London Free Press
February 16, 2007

Ontario Energy Minister Dwight Duncan is boasting about lowering coal-plant emissions even as he refuses to install more of the pollution control devices that contributed to the cleaner air, one energy expert says.

Duncan announced yesterday that greenhouse-gas emissions from Ontario’s coal-fired generation stations have dropped by 29 per cent since his Liberal government took office in 2003, bringing emissions below 1990 levels.

A government news release notes "acid rain and smog-causing" nitrous oxide and sulphur dioxide emissions have dropped significantly over that same time period.

"By replacing coal-fired generation with conservation and cleaner, greener power sources, our government is demonstrating its strong commitment to fighting climate change and protecting the air we all breathe," Duncan said.

But Energy Probe executive director Tom Adams said conservation and green power sources such as wind have played only a small part in cutting emissions.

Ontario has reduced its reliance on coal because it has more nuclear power, which was being brought on line as the Liberals came to power, he said.

The most dramatic drop in emissions – a 46-per-cent plunge in nitrous oxide levels – is due to a decision made in the late 1990s to put pollution-control devices on the four most heavily used coal units in the province, Adams said.

"This has nothing to do with the Liberal government. It proves the value of putting pollution-control devices on these coal plants."

Duncan said it makes little sense to install more of the costly devices now because his government plans to phase out coal plants by 2011.

The ministry estimates coal plants would have to stay open until 2030 to warrant the expense of the scrubbers, he said.

The devices also do little to eliminate carbon dioxide, the key contributor to climate change, Duncan said.

Adams said the 2011 deadline is unrealistic. "And long-term, that means much dirtier air than we need to be exposed to," he said.

Canadian Press
Toronto Star
February 26, 2007

It could take $1.5 billion and four years to install anti-pollution equipment on all of Ontario’s coal-fired electricity stations but it wouldn’t make economic sense if the plants are closed by 2014 as planned, Ontario Power Generation CEO Jim Hankinson said today.

The giant utility already has scrubbers on two of four coal-burning units at its Lambton station and on two of eight units at the huge Nanticoke generating station – considered one of the worst sources of air pollution in North America.

The Liberal government was reluctant to install scrubbers when it originally promised in 2003 to close Ontario’s four remaining coal-fired stations by 2007, and even later when it pushed that deadline back to at least 2011.

The Ontario Power Authority has recommended the government keep the coal plants around on standby until 2014 before they can be permanently mothballed.

"Well, if you assume that they close down in 2014 as the legislation calls for, obviously the payback would not be very good from an economic point of view," Hankinson said after appearing before a legislative committee.

Hankinson admitted "emissions could be reduced very substantially" if the anti-pollution equipment was installed at the coal-burning plants but added that OPG makes a habit of using the worst polluting equipment as a last resort.

"Obviously we would run the units that have the (anti-pollution) equipment on them first and only in those circumstances where there’s need would we run the other ones."

NDP Leader Howard Hampton agreed scrubbers would be a waste of money and said the province should spend its cash on incentive programs for consumers to lower demand for electricity.

The coal plants were used less often last year because of Ontario’s mild weather and Hampton said they would be used even less in the future if homes and businesses were given help to become more energy efficient.

"Instead of spending billions of dollars on scrubbers we should have an incentive strategy for homeowners, for shop owners, for school boards and for industry to start retrofitting their operations so we actually provide the financial incentive to use less electricity," said Hampton.

"We’re better off to spend $1.5 billion to provide those kind of incentives . . . then to put money on scrubbers that may only be used for, say, 10 years."

The watchdog group Energy Probe said Ontario should be exploring the latest technologies to burn so-called clean coal to reduce emissions from the electricity plants.

"The technology for coal-fired utilization is making some rapid progress with intense public and industrial support in many parts of the world (including) the United States, Europe and Japan," said executive director Tom Adams.

"We can now with existing, off-the-shelf technology, virtually eliminate conventional pollutants from coal-fired generation."

A spokesman for Energy Minister Dwight Duncan said the government compares the installation of scrubbers on coal stacks to "putting filters on cigarettes," and said clean-coal technology is not ready yet.

"Reports from around the globe indicate so-called clean-coal technology – if it is proven able to fully capture CO2 emissions – wouldn’t be commercially viable until very late into the next decade," said Duncan’s communications advisor, Steve Erwin.

Rob Ferguson
Toronto Star
February 27, 2002

The payback for installing costly pollution-eating scrubbers at Ontario’s coal-fired electricity plants is "not very good" given their limited life span, the head of Ontario Power Generation says.

It would take "three or four years" to get scrubbers running and cost between $500 million and $1.5 billion at a time when the plants are expected to close within seven years, chief executive Jim Hankinson said.

The math doesn’t add up, Hankinson said after testifying before a legislative committee yesterday, acknowledging the decision is up to the provincial government and "not my call."

"If you assume that they close down in 2014 . . . obviously the payback would not be very good from an economic point of view," he told reporters.

Energy Minister Dwight Duncan is waiting for a recommendation from the Ontario Power Authority on whether to install more scrubbers on the coal-fired electricity plants at Lambton, near Sarnia, and Nanticoke, south of Hamilton.

That recommendation is expected this spring.

Duncan and the governing Liberals have come under fire from the opposition parties and environmental groups for breaking their promises to close the coal-fired plants, first in 2007 and then in 2009.

There are now scrubbers on two of the four smokestacks at Lambton and on two of eight stacks at the Nanticoke station.

The power authority has already recommended the coal-fired plants close in 2011 but be kept available for use until 2014 as a contingency plan in case increased nuclear, wind, natural gas and other power sources fall short of demand.

But Tom Adams of Energy Probe called those dates into question, saying he doubts they are realistic given that natural gas is now five times more expensive than coal.

That increases the likelihood coal plants will remain as a source of reasonably priced power and makes it "highly questionable" to operate coal-fired plants without more scrubbers.

"Not installing them just exposes us to more pollution that we don’t need," he said after appearing before the committee.

Hankinson told MPPs on the committee that more scrubbers on two coal-fired plants could "very significantly" reduce toxic emissions.

However, scrubbers do not limit the amount of carbon dioxide – a greenhouse gas blamed for global warming – that the coal plants produce, he noted.

And Hankinson suggested putting more scrubbers on the plants at Lambton and Nanticoke might not have a huge impact on air quality in Ontario.

"You have to bear in mind that 50 per cent of the smog in our air shed comes from the United States, 23 per cent comes from transportation, 7 per cent comes from OPG’s power production."

But if Duncan wants scrubbers on the remaining stacks, the government had better be prepared to help out financially because Crown-owned Ontario Power Generation, which had a profit of $490 million last year, can’t afford them on its own, Hankinson said.

"We would want to be compensated," he told the committee, noting that revenues from coal plants have been shrinking as the utility uses them less to produce power with more nuclear and other forms of power available.

The scrubbers on two stacks at the Lambton plant make them among the cleanest of the 475 coal-fired electricity plants in North America, but Ontario will lose that edge in the next five years or so as more U.S. coal-fired plants install and update scrubbers, Hankinson said.

"There’s a huge effort being made in the U.S. to clean up their coal plants," he told reporters.

"They get something like 50 per cent or more of their generation from coal and they intend that to be the way of the future, so they are moving aggressively to clean up their plants."

Ontario gets just over 25 per cent of its power from coal, down from 31 per cent in 2005.

Ian Urquhart
Toronto Star
February 28, 2007

The ongoing debate over the future of coal-fired power plants in Ontario is finally coming into focus, with the potential that voters will be offered some real choices on the issue in the coming provincial election.

In the 2003 election campaign, the Liberals promised to close the plants, which supply about 20 per cent of our electricity, by 2007.

"Our coal-burning plants are the worst polluters in Ontario," said the Liberals in their platform. "They create smog and threaten our health."

Once in office and faced with the reality of keeping the lights on, however, the Liberals began backtracking on that promise.

They shut down the Lakeview plant in Mississauga, which had already been slated for closing by the previous Conservative government. But last year they conceded that the remaining four plants − in Nanticoke, Lambton, Thunder Bay and Atikokan − will remain open at least until 2011, and maybe longer.

So if the coal-fired plants are to be kept in operation, shouldn’t they be retrofitted with the most up-to-date pollution control equipment to mitigate the damage they cause?

This question was pressed at a legislative committee at Queen’s Park on Monday by John Yakabuski, the Conservative energy critic.

Yakabuski noted, with some sarcasm, that the Liberals had earlier blamed the coal-fired plants for causing 668 premature deaths a year in the province and wondered how the government could countenance this toll for another four years (or longer).

Backing up Yakabuski was Energy Probe‘s Tom Adams, an ardent advocate of coal-fired power. "It’s mind-boggling that we don’t (spend the money on pollution controls)," said Adams.

Providing the answers was Jim Hankinson, president of Ontario Power Generation, the government-owned operator of the coal-fired plants. Hankinson noted that, while the installation of scrubbers and other pollution controls would remove most of the smog-producing sulphur dioxide and nitrogen oxides from the smokestacks of the coal-fired plants, it would do nothing for carbon dioxide emissions.

Carbon dioxide is one of the greenhouse gases blamed for global warming.

Research is under way on methods to contain carbon dioxide emissions, noted Hankinson, "but we’re a number of years away from these kinds of initiatives . . . There really isn’t much that can be done today."

Outside the committee room, Hankinson threw more cold water on the idea of installing new pollution control equipment by pointing out that Ontario’s coal-fired power plants are responsible for just 7 per cent of our smog. Most of it can be attributed to airborne pollution from coal-fired plants in the United States and from cars, trucks and planes.

"It (installing pollution controls on the coal-fired plants) would not make a huge difference," remarked Hankinson.

Nonetheless, suggested Yakabuski, if it would save some lives, shouldn’t we be doing it?

Indeed, installing pollution controls at our coal-fired plants seems like a no-brainer. But, perhaps counter-intuitively, environmentalists are arguing against it.

The environmentalists worry that the high cost of installing the pollution control equipment on the coal-fired plants − up to $1.5 billion, according to Hankinson − would lock the government into coal and continuing greenhouse gas emissions.

"You’re more or less committing to keeping the plants going for another generation if you do that," says Mark Winfield of the Pembina Institute.

The environmentalists would prefer to accelerate the closing of the coal-fired plants and to spend the money elsewhere. The question is: On what? On converting coal-fired plants to natural gas, on renewables, on conservation, and on co-generation, say the environmentalists. Definitely not on more nuclear power.

The provincial New Democrats have more or less lined up with the environmentalists.

The Liberals, while officially awaiting a report on whether to install pollution controls on the coal-fired plants, are leaning heavily against such an investment. They, too, would prefer to close the coal-fired plants as soon as possible and to invest in conservation programs.

But the Liberals believe that, to keep the lights on, we will also need more nuclear power.

The Conservatives? When he was pressed outside Monday’s committee meeting on where his party stands, Yakabuski would say only that "all the options" are being reviewed. "A comprehensive policy will be released at the appropriate time," he added.

But if we follow the line of Yakabuski’s questions, the Conservatives will be saying that we should keep the coal-fired plants open and invest in pollution controls.

And the debate will begin.

Ian Urquhart’s provincial affairs column appears Monday, Wednesday and Saturday.

The Record.com (Waterloo)
March 12, 2007

After being in power almost four years, Premier Dalton McGuinty and his Liberals should have a real plan in place to deal with Ontario’s energy needs and, in particular, the province’s coal-fired electricity plants.

But, for reasons that are not clear, the government seems to be stumbling along, not able to gets its energy file in order. The latest example of the confusion arose last week when the premier was discussing how his government would spend the $586 million the federal government has pledged to give Ontario for climate-change initiatives. McGuinty said the government would not use the money to clean up the province’s coal plants.

Well, fine, the government can use the money for other purposes – but when and how is it going to deal with the coal-fired plants?

Basically, the government has to choose one of three options: It may continue to use the pollution-producing plants; it could convert the plants so that they burn cleanly and do not emit harmful gases, or it could close them and rely upon other forms of electricity including, perhaps, nuclear power.

Nothing the premier said has shown the government is ready to make the hard choices that sooner or later will have to be made.

Tom Adams of Energy Probe, the energy research group, went to the heart of the problem when he said scrubbers to clean emission from the coal stations may not be a bad idea.

He said that getting rid of the coal-fired plants has been official government policy since the 1980s, but they are still around. If, in fact, the province can’t do without them, the government might as well acknowledge this reality and set its policy on a firm, realistic foundation.

McGuinty could hardly deny that his own party has not been as realistic as it should have been. During the 2003 election campaign, the Liberals pledged to close the coal stations by 2007. That’s this year. That’s a pledge they couldn’t keep. In 2005, they said they would not shut down the Nanticoke station until 2009, but they subsequently had to acknowledge that deadline was also too optimistic.

Unless this government can produce a clear plan quickly, the Liberals will go into the fall election campaign saddled with the allegation that they have not shown sufficient leadership on energy matters.

This won’t be good for the Liberals. More important, it won’t be good for Ontario.

The energy file needs more attention than the Liberals have given it so far.

Carmela Fragomeni
The Hamilton Spectator
March 23, 2007

It’s happening in Toronto and Energy Probe says it will eventually happen here and in the rest of Ontario.

"There is a long-term trend among gas and electricity consumers to conserve. That’s the good news," said Tom Adams of Energy Probe. The bad news is some utilities must charge more to recover revenues lost because they are selling less. Toronto’s hydro company wants to increase its distribution rates by 6.3 per cent on May 1, to cover a $10.4-million loss because of energy conservation programs.

Hamilton’s Green Venture EcoHouse manager Pete Wobschall acknowledges someone has to pay for such losses and it’s no doubt going to be the consumer. "Unfortunately, it’s a catch-22." Conserving energy, even if it costs you more, must remain a priority, he said. "We are not doing it to save bucks. We’re doing it to clean the air.

"Here in Hamilton, we have 100 people die from air pollution (a year) and some of that comes from burning coal for electricity."

Michael Buonaguro of the Public Interest Advocacy Centre said higher distribution rates, which are only one section of hydro bills, don’t automatically increase costs to consumers, if they continue to conserve. Higher distribution rates can be offset by lower usage, he said.

This doesn’t necessarily work for low-income families as they can’t afford new energy-efficient appliances and other energy-saving devices.

Hydro companies must find ways to economize to prevent the hikes, said Adams of Energy Probe. He said Union Gas is experiencing a decline in usage but hasn’t raised rates. That shows utilities can find efficiencies equal to revenue losses. "Most (hydro) utilities aren’t smart enough to figure it out yet, and the regulator doesn’t push them hard enough to do it."

The Ontario Energy Board, the rate regulator, is considering compensating utilities for such revenue losses.

Hamilton Hydro users have saved 29 million kilowatt-hours of electricity, enough to power 3,250 homes. Burlington users have cut 1 per cent to 2 per cent of overall consumption. But customers in both cities face little or no increase because of enough growth producing new customers to offset losses.