Ontario Energy Board strategy consultation

Posted on December 1, 2003 by energyprbe

Energy Probe

December 1, 2003

Submissions from Energy Probe Research Foundation
(Energy Probe)

INTRODUCTION

In Energy Probe’s view, the starting point for consideration of the OEB’s priorities is the mandate of the Board as expressed in the purposes section of the OEB Act. Energy Probe strongly supports the purposes set out in the Act. Balance and fairness are necessities in addressing the public’s interests in regulated energy services.

Energy Probe warns against regulatory hubris

Not all energy problems are best solved through regulation. Regulation is a necessary but limited instrument in dealing with problems in the energy sector. Competitive markets, not regulation, are in the long run more likely to efficiently guide resource allocation and protect consumers. In considering regulatory priorities for the future, the Board should remain mindful of the major lesson of Ontario’s experience with monopoly energy services.

Ontario’s gas sector is a considerable success:

  • Over $7 billion in private capital is currently serving customers of Union and Enbridge, and the structure of the market led to the recent acquisition of Union Gas’ parent corporation for a significant premium over the book value of the assets.
     
  • Far from a burden on taxpayers, these firms actually pay substantial taxes.  
  • Gas issues are rarely a major public concern.
     
  • Distribution rates are reasonable by interjurisdictional comparison.
     
  • The utilities serving customers are reasonably responsive to consumer concerns. Customers are actively represented in regulatory and other fora by a variety of groups who have demonstrable expertise.
     
  • Demand and supply of the commodity are efficiently linked through price. By contrast, Ontario’s electricity sector is a major and growing public policy problem. Political intervention freezing rates and financing capital spending by OPG and Hydro One, has shifted cost from rates to the netherworld of undiscovered taxes. Municipal utilities have been unable to recover transition costs and regulatory assets, leaving many to large balance sheet risks. Some have even suffered negative cash flow. Until recently, there was not even a clear prospect for recovery. Most consumers lack even the most basic information to guide efficient consumption decisions.

    One of the most significant distinguishing features separating the gas and electricity markets is regulation. Ontario’s gas sector is accountable to an independent regulator. Historically, Ontario’s electricity sector was self-regulated. Non-binding public reviews by the OEB of near term rate proposals where introduced in the early 1970s. Consideration of capital spending was declared by all successive Ontario governments from 1974 – 1994 to be beyond the scope of these reviews. It was not until 1992 that Ontario Hydro became subject to directive power from government. Starting in 1998, experiments began with public regulation of electricity monoplies but the independence of that process has been variable.

    Ontario’s lesson is that good regulation can contribute to better governance

    Critics of gas industry regulation sometimes suggest that hearings are too long, there are too many intervenors, and that regulatory costs are unreasonable. The Board itself lists “streamlining the hearing process” as a key project. Energy Probe suggests that the Board should take a wide enough view to appreciate the lesson that good regulation can contribute to better governance. Validation of gas utility rates through public regulation that is based on due process, administered by an independent regulator works well. While the gas regulation can be improved, the model is fundamentally strong and should be preserved.

    The following sections respond to the questions contained in the OEB’s invitation for submissions, published 2003 October 17. In addition, we have provided additional comments on particular areas of concern to Energy Probe.

     

    1. What are the key challenges for the electricity and gas sectors in the short and long term? Ontario’s electricity system is burdened with obsolete, environmentally challenged nuclear, coal, and simple cycle oil/gas-fired generators, many of which are incapable of providing predictable output:

     

  • In the annual period May 2002 until April 2003, these generators supplied 70.7% of the domestically produced power supplied to the IMO’s market. The units providing this output number 37 – 33 of which are passed middle age. Several, like the four Lakeview units, are very close to their point of expiry.
     
  • At least half Ontario’s electricity demand lacks demand-responsive prices due both to administered prices and obsolete metering.
     
  • Taxpayer-backed electricity stranded liabilities are rising.
     
  • Many LDCs are suffering unsustainable financial pressures.
     
  • The power system is vulnerable to acute disruptions, due to potential supply/import shortfalls or transmission problems.
     
  • In addition, all major governmental electricity institutions, both industrial and regulatory face governance challenges. By contrast, Ontario’s gas market is an oasis of efficiency, solvency and customer service. However,

     

  • The market does suffer from some illiquidity.
     
  • Consumers are currently challenged in dealing with volatile and historically high commodity prices.
     
  • Ontario customers are currently burdened by supporting excess transmission capacity into the province.  

    2. What should the OEB do to respond to these challenges?Electricity

    The OEB should encourage LDCs to facilitate customer adoption of interval metering where it is likely to be cost effective in future. There may be efficiencies to be gained through metering and meter data management services being facilitated or managed competitively.

    Energy Probe believes that the 2003 blackout demonstrates the need for utility regulators to pay attention to reliability:

     

  • First Energy, the U.S. utility at the center of the blackout investigation, is regulated by the Ohio Public Utility Commission. Energy Probe notes that the Ohio Public Utility Commission is not mentioned in the interim report of the US-Canada Power System Outage Task Force “Causes of the August 14th Blackout in the United States and Canada”, although, the report does highlight a significant number of First Energy’s deficiencies.
     
  • Energy Probe supports the National Energy Board’s recent initiative to review international transmission system reliability issues. Energy Probe urges other regulators, such as the Ontario Energy Board, to participate actively in grid reliability issues.
     
  • At a minimum, the OEB should require standardized reporting and publication of distribution utility delivery-related reliability and power quality data. Gas

     

  • The OEB should develop gas transmission and storage access rules. Unbundling system contracting for transmission capacity should be considered. Absence of such rules goes some of the way to explaining why gas in Ontario is relatively illiquid.
     
  • The OEB should provide strategic direction encouraging the development of a more competitively oriented storage sector while fairly allocating historic value as appropriate to shareholders and ratepayers.
     
  • The OEB should provide seasonally relevant advice to consumers on gas price trends, bill expectations, and conservation options.
     
  • The OEB might consider inviting the gas utilities to propose a common weather normalization method for forecasting and analytic purposes.  

    3. Are there existing activities in which the OEB is engaged that should be given greater or lesser priority? Implementing Electronic Regulatory Filing appears to have dropped off the OEB’s list of priorities but now should be reattached. ERF would promote public access and should also provide an avenue for efficiency improvements.

     

    4. What new initiatives should the OEB undertake and what priority should they be given? The OEB should work with the IMO to develop a workable program of locational marginal prices (LMP) for electricity that flows through to the retail electricity market. Wholesale LMP was strongly recommended by the Ontario Market Design Committee (Second Interim Report, Recommendation 3 – 4 Nodal Prices). Energy Probe believes that demonstrating progress on LMP would improve the efficiency of Ontario’s overall electricity market and help to restore investment confidence.

    The OEB should consider establishing the capability to undertake economic research on regulatory questions. For example:

     

  • The Board should be analyzing the benefits of separating electricity transmission and distribution.
     
  • There is a prima facie case that Ontario’s rate of efficiency enhancement for household gas usage is less than the rate of efficiency improvements in jurisdictions without utility subsidized conservation programs, not withstanding Ontario’s record of about 10 years of utility subsidized gas DSM. Is OEB-approved gas DSM impairing conservation? There is a widespread belief among some electricity policy professionals in Ontario that reducing the number of LDCs would enhance distribution efficiency. The largest consolidation of LDCs since 1998 was Hydro One’s MEU buying spree – a business strategy that appears to have significantly reduced Hydro One’s financial flexibility and does not appear to have enhanced shareholder value or reduce costs for consumers. Aside from Hydro One, the next largest LDC in Ontario is Toronto Hydro, which has among the highest distribution rates of any large urban utility in Ontario. Neither of these experiences suggests that size is an important determinant of efficiency. What are the factors that drive distribution utility efficiency?

    The Memorandum of Understanding between the OEB chair and the government should be published as it is updated.

    The OEB should not set up an ombudsman office to replace the role of public interest intervenors.

    5. What do you think our first priority should be?

    Energy Probe believes that the Board’s top priority should be to contribute to Ontario’s exit from Bill 210 and the host of problems it has exacerbated or created:

     

  • Developing a workable PBR formula for electric LDCs should be included in the scope of a Bill 210 exit strategy.  
  • Energy Probe suggests that a generic hearing be convened to consider formulaic approaches to LDC ratemaking.  
  • Energy Probe further suggests that, since the benefits associated with Bill 210 were not evenly spread among consumers, that the Board should propose appropriate guidelines to ensure that costs associated with Bill 210 are recovered from the customers associated with those costs, if the government deems it appropriate for Bill 210 related costs to be recovered from electricity consumers. Future of System Gas

    In addition to the questions identified by the Board, Energy Probe suggests that the Board consider providing guidance to the market place on its views about the future of system gas.

    In October, Enbridge circulated a paper among interested parties discussing the future of system gas (“The Need for System Gas” October 2003). The paper observes that system gas is a mechanism for providing valuable load balancing and backstopping services. Energy Probe supports this observation. Energy Probe also believes that system gas can facilitate customer mobility to, from and between marketers. Many customers prefer to use a non-contract service, perhaps because they prefer dealing with a recognized supplier, or because they anticipate that the short commodity market will outperform long markets over the long term, or because they would prefer to address themselves to other matters.

    Energy Probe does not necessarily agree with Enbridge’s assumption that it must continue to take long-term positions in pipeline capacity but that problem is not an immediate concern in any event. Except for potential future issues around pipeline contracting, Energy Probe supports continued utility provision of system gas.

    Energy Probe’s preference is that system gas be priced in a way that is as market-based as possible, with minimum risk to the utility. Energy Probe’s preferred model for system gas is one that is purely spot price pass-through, like the system recommended by the MDC for pricing default electricity service. However, whether system gas is hedged as Ontario’s major gas LDCs currently do, or not hedged as Energy Probe would prefer, system gas provides a valuable service to consumers and should be allowed to continue.

    Promoting Public Participation in OEB Consultations

    Energy Probe suggests that the Board consider developing a funding process to facilitate professional representation for customer groups and public interest intervenors in Board-initiated consultation processes. This will assist the Board in widening the response to its initiatives beyond those stakeholders with a concentrated commercial interest.

    Thank you.

Posted in Reforming Ontario's Local Electrical Distribution Sector | Leave a comment

Re: Going nuclear

Posted on November 10, 2003 by energyprbe

Tom Adams
Letter to the Editor
November 10, 2003


The Calgary Herald
Re: “Going nuclear,” November 6, 2003, and “Good night’s sleep,” November 12, 2003

The author of your editorial promoting nuclear power for Alberta should have checked the market evidence on nuclear economics before stating that “economics alone suggest that Alberta should not be ruling out the nuclear option.”

In the U.K., nuclear power and natural gas compete directly. British Energy, a privatized nuclear business, was given 15 reactors almost free, enjoyed very good management, and demonstrated significant productivity improvements. All of these advantages were not enough. British Energy is teetering on the edge of complete bankruptcy as the European Union investigates the government subsidies that are now keeping the nuclear plants running. The Bush administration in the US is trying to get billions in subsidies to stimulate new nuclear construction.

Your editorial bases its support for nuclear on studies done by the self-proclaimed “independent” think tank, Canadian Energy Research Institute. CERI’s advocacy of nuclear power is in fact funded by the Canadian Nuclear Association, which in turn gets much of its funding from Atomic Energy of Canada Limited, a federal crown corporation. AECL has already pumped many billions out of federal taxpayers and is using CERI’s “studies” as part of its lobbying campaign for further billions. Nuclear’s failed economics is proven by its reliance on taxpayer dollars.

On Wednesday Nov. 12, you published a letter from Jaro Franta urging people to not “lose any sleep over nuclear waste.” Mr. Franta did not disclose in that letter that he has been a long time employee of AECL, is currently working on a nuclear reactor in Quebec, and has been on the executive of the Canadian Nuclear Society. Stealth commentaries, apparently penned by members of the public but actually authored by paid nuclear industry insiders, is a strategy that industry has long employed in an effort to sway public opinion.

Tom Adams
Executive Director, Energy Probe, Toronto

 

Posted in Alberta Power Industry | 1 Comment

Power supply problems continue

Posted on October 31, 2003 by energyprbe

John Spears
Toronto Star
October 31, 2003

Are Ontario consumers ready to pay more for power?

If the August blackout taught Ontarians anything, it’s that the province’s electricity system isn’t as secure as they’d thought.

While a consumer revolt over rising electricity prices stampeded the former Tory government into freezing the energy component of the hydro bill, the blackout showed that having a secure supply is also vital.

A low price is useless if there’s no power in the system.

Perhaps that’s why the freshly minted Liberal government has broken its first promise by telling consumers it won’t keep the price frozen until 2006, as the party’s campaign platform had pledged.

The government is now facing up to the prospect of trying to build a power system that, first of all, has enough juice to keep everyone’s lights on.

At the moment, that’s not the case, and the math doesn’t look good for the future.

On a very hot or very cold day in Ontario, demand for power soars to about 25,000 megawatts – and up to 15 per cent, or close to 4,000 megawatts, has to be imported from our neighbours.

While imports aren’t necessarily evil, the blackout underscored the risk of overdependence.

But if the Liberals keep their promise to shut down every coal-fired generating station in the province by 2007, the supply could get even tighter.

Nanticoke and Lambton, the province’s two biggest coal plants, by themselves can churn out more than 20 per cent of the province’s power on a day of maximum consumption.

Replacing those plants won’t be easy.

The obvious answer: build more generating stations. But there are no simple ways of boosting generating capacity.

The Pickering A nuclear station, with about 2,000 megawatts of capacity, is supposed to be back in service at some point, but its future is uncertain due to mammoth cost overruns and delays.

The Liberals say there’s potential for nearly 4,800 megawatts of new gas-fired plants, but natural gas supplies are tight and natural gas plants may become increasingly expensive to operate.

A new transmission line that would carry 1.25 megawatts of power from Quebec is bogged down on the Quebec side of the border. There’s no certainty it will ever be built.

The province says there’s capacity to construct 6,000 megawatts of wind-powered generators in Ontario, but giant wind farms tend to attract opposition from local communities.

And because the wind blows fitfully, a windmill may deliver power less than 25 per cent of the time.

Conservation is another route to energy security, but the price freeze destroyed any financial incentive for householders and small businesses to cut back.

Lifting the freeze before its scheduled expiry in 2006 sends a better signal to consumers that they’ll have to pay for the privilege of being energy hogs.

The Liberal pledge to keep the freeze in place until 2006 is “one of the promises they never should have made in the first place,” said Tom Adams, executive director of Energy Probe.

“From a conservation and energy reliability point of view, the best thing to do is simply go back to the market price right away.”

Ending the freeze sends the right signal to potential private sector investors, says Julie Girvan, an independent consultant who often works for the Consumers Association of Canada.

“We need to stimulate in the power sector in Ontario,” she said.

“Removing the price freeze, or at least increasing the price, will hopefully do something to stimulate new power development.”

 

Posted in Reforming Ontario's Local Electrical Distribution Sector | Leave a comment

Liquefied natural gas (LNG) risks

Posted on October 24, 2003 by energyprbe

Tom Adams

October 24, 2003

Liquefied natural gas (LNG) is rapidly gaining in policy popularity and commercial interest in North America. Energy Probe believes that the potential for catastrophic explosions and the substantial financial risks associated with LNG need to be fully considered before making any decisions to expand our dependence on LNG.

Marine LNG off-loading terminals are proposed for sites near Saint John, New Brunswick and the Strait of Canso, Nova Scotia. Ontario has a small LNG facility, owned and operated by Union Gas east of Sudbury near the town of Hagar. (Almost all natural gas storage in Ontario uses underground storage in sealed natural cavities, a technology that has proven to be extremely safe.)

LNG and other liquefied flammable agents that are gaseous at normal atmospheric pressures and temperatures, such as propane, liquefied petroleum gas (LPG), and hydrogen, are capable of what are known as Boiling Liquid Expanding Vapor Explosions (BLEVEs).

An LNG release on water is particularly dangerous. If LNG contacts water, the LNG boils rapidly, sometimes called rapid phase transition (RPT). The result is that natural gas is released. The resulting gas expansion powers the dispersion of a “cloud” of liquid and gaseous natural gas. This cloud achieves a “super-fluid” effect similar to pyroclastic flows seen in some volcanic eruptions, where the rapid motion of the cloud is powered by the expansion of bubbles within it. Flammable vapor clouds can form if a spill does not ignite immediately.

LNG explosions have been relatively infrequent in Canada and the United States. In 1944, an LNG tank in Cleveland, Ohio exploded killing 135 people. In 1979, the failure of an electrical seal on an LNG pump permitted natural gas (not LNG) to enter an enclosed building. A spark of indeterminate origin caused the building to explode. As a result of this incident, the electrical code has been revised for the design of electrical seals used with all flammable fluids under pressure.

Japan relies heavily on LNG and has so far demonstrated a good safety record.

LNG spilled on or within the hull of a ship can cause brittle fracture of some common types of steel. There have been marine accidents where hull damage due to brittle fractures was incurred after LNG was spilled. Fortunately, LNG explosions did not occur in these instances.

Many proposed LNG terminals have been turned down over the years for reasons that often involve the combined effects of high cost and high risk. Examples include an LNG terminal on the Thames River in London, three LNG terminals that were proposed for California in the 1970s but cancelled, and a land-based LNG storage facility once proposed for Eastern Ontario by the former Consumers Gas Company (now Enbridge Gas Distribution).

LNG is usually thought to be cost effective only where natural gas prices average more than US$3.50 to US$4.00 per thousand cubic feet. Measured at the producer level, North American prices have only exceeded this level for two sustained periods over the last 20 years; however both periods of high prices occurred since June 2000.
(See http://tonto.eia.doe.gov/dnav/ng/hist/n9190us3M.htm)

For more information on LNG risks see:
www.thebulletin.org/issues/2003/ja03/ja03havens.html
www.timrileylaw.com/LNG.htm
www.lngwatch.com

 

Posted in Liquified Natural Gas | 1 Comment

Nuclear power can only survive with state aid

Posted on October 17, 2003 by energyprbe

Tom Adams
National Post
October 17, 2003

Tom Adams’ response to “Think tank predicts need for nuclear plants necessary to meet growing demand,” published by The Globe and Mail, October 17, 2003. The Globe and Mail article discussed a study conducted by the Canadian Energy Research Institute posted on the Canadian Nuclear Association’s Web site at: www.cna.ca/english/files/study/CNAStudySept16-03.pdf

Letter to the Editor
The Globe and Mail
(This response has not yet been published)

The Canadian nuclear industry’s latest lobby effort to secure government subsidies has arrived in the form of a report purporting to examine “the key economic dimensions of the nuclear industry.”

Like previous nuclear lobbying studies, the new study confuses costs with benefits. For example, nuclear power’s labour intensiveness relative to power sources like natural gas-fired generators, is reported as a benefit. The study ignores the most important issues in nuclear economics – investment risk, government handouts, cost overruns, production declines, and the perverse incentives flowing from federal legislation limiting nuclear liability in the event of accidents.

Reducing subsidies reveals that the costs of nuclear power outweigh its benefits. The clearest case is in the UK where power privatization and competition have revealed nuclear power to be a money pit. The private nuclear company, British Energy, cherry picked the best 15 reactors from a fleet of over 30 and paid only half the cost of construction of the 15th reactor. The government also extended to British Energy its legal shield protecting government nuclear operations from liability in the event of accidents. Despite these advantages, British Energy still failed to pay its bills and is now being renationalized.

As The Times of London noted earlier this month, nuclear power can only survive with “state aid – on a grand scale”.

 

Posted in Towards Shutdown | Leave a comment

British Energy’s restructuring deal

Posted on October 14, 2003 by energyprbe

Tom Adams

October 14, 2003

Under the deal, taxpayers take on responsibility for the company’s decommissioning liabilities. According to one report, this avoids the UK government from having to include the nuclear stockpile of debt in the public finances, an amount that might sum to £4 billion (British Energy nuclear stations could go for £1 each, By Michael Harrison, The Independent). (Government keeps its options open as nuclear is kept private By Jeremy Warner) A report in the Times (Business Editor’s Commentary: State aid — on a grand scale, By Patience Wheatcroft) suggests that the government’s reporting treatment for the liabilities it has acquired have not yet been determined.

The structure of the state aid is, in part, that taxpayers will be faced with a bill of up to £200 million a year for a decade, and then an unspecified amount after that. Lossmaking, state-owned British Nuclear Fuels will accept a lower price for reprocessing fuel for BE. In addition, the government has also agreed to take over BE¹s multi-billion pound clean-up liabilities – another hit to the taxpayer. (Scrutineer: Light at the end of the tunnel for BE – if Brussels agrees by Martin Flanagan, City Editor) In return, the government requires BE to surrender 65 per cent of its annual post-tax cash flow to the government’s new Nuclear Liabilities Fund. (Financial Times, LEADER: Tough bargaining on British Energy)

After the deal was announced, British Energy’s bombed-out shares, once on the FTSE 100 index of the UK¹s biggest companies, edged up slightly to close at 5.38p last night, having closed on Tuesday at 5.35p. That puts a £33 million value on the company, which was worth £5 billion at its peak. (British Energy debt swap leaves shareholders fuming By Angela Jameson, Industrial Correspondent)

The Times points to the British Government’s muted response to the French state rescue of Alsthom and suggested that British Energy provides the explanation. The Times called the BE rescue deal “semi-renationalisation” and points out that the company suffer another operating loss, this time of £40 million in the five months to the end of August. (Business Editor’s Commentary: State aid — on a grand scale, By Patience Wheatcroft)

The European Commission launched an investigation into the Government’s aid to the company, which it believes could contravene state-aid regulations. The investigation, which started after British Energy received a £650m state loan last autumn, is due to be completed next summer. If it judges that British Energy was being unfairly supported, the company could yet be re-nationalised. The Government repealed the 1989 Electricity Act earlier this year in case it has to re-nationalise the company. (* Daily Telegraph * “DEAL KEEPS LIGHTS ON AT BRITISH ENERGY” by Edmund Conway)

Under the deal, the government also has the right buy any of BE¹s power stations for £1 if the company decides to begin decommissioning work before previously agreed dates. (British Energy still on uncertain ground, by Iain Dey, Deputy Business Editor)

In commenting on the bailout, groups as disparate as Friends of the Earth and the Financial Times called for the end of spent fuel reprocessing. The Financial Times noted, “(The BE saga) has raised the question of whether the storing of spent fuel at reactor sites rather than expensively reprocessing it might not make cost as well as environmental sense.” (Financial Times LEADER: Tough bargaining on British Energy)

 

Posted in Towards Shutdown | Leave a comment

Safety deficiencies caused reactor shutdown

Posted on October 7, 2003 by Other News Sources

Tom Adams

October 7, 2003

Ms. Wells,

I enjoyed your analysis of some of Ontario’s problems with its aging nuclear reactor fleet (Toronto Star, Nuclear Fallout, September 27, 2003).

One note about Pickering A (PA) that I believe is significant but has received virtually no recognition on the record relates to the reasons for PA’s closure in 1997. From a time that dates back to before the original in-service of the station in the early 1970s, the federal nuclear safety regulator had been aware of deficiencies in the design of the fast shut down safety system used in each of the four reactors. After dithering for decades over what to do about the deficiency, the regulator in the early 1990s imposed a license condition on Ontario Hydro related to PA. The regulator ordered that if the safety systems were not upgraded by the end of 1997 following specific design guidelines, the station would not be allowed to operate. Through the mid 1990s, Ontario Hydro failed to make the necessary upgrades. By August of 1997, it was obvious that the upgrades to all units except unit 4 units 1, 2, and 3 could not be completed in time. The safety deficiencies of the PA station were what directly caused the closure in December 1997.

The official version of Pickering A’s “layup” from the nuclear industry always claims that safety had nothing to do with the closure. Your report claims that “the predominate issue was not safety.” In fact, the IIPA report that triggered the 7-reactor shutdown shows repeated explicit references to revelations that (e.g.) “safety margins were compromised” in Ontario Hydro’s reactors. Ontario Hydro’s failure to upgrade the shutdown systems as required in the license was on top of these other problems. The actual history of the Pickering A station proves that safety deficiencies were the real drive

Posted in Nuclear Safety | Leave a comment

Leave energy waste in the dust

Posted on October 5, 2003 by energyprbe

Ellen Roseman
Toronto Star
October 5, 2003

You did your best to conserve energy after the big blackout in August. But now the power is flowing again, you’re running your appliances at full speed.

Maybe it’s time to flip the switch back to energy conservation mode.

“Don’t assume your future bills will look anything like the present ones,” says Tom Adams, executive director of Energy Probe, a Toronto-based consumer group. “You should be thinking about how to save electricity in the future.”

We have a new Liberal government in Ontario, which needs money to fulfil its campaign promises and may scrap the cap on electricity before 2006. Freezing the price at 4.3 cents a kilowatt hour, when the average was closer to 5.9 cents, has already cost the provincial treasury about $1 billion.

And we’re going into a winter when natural gas for heating has risen substantially. Homeowners who signed fixed-price contracts at 10 to 15 cents a cubic metre are renewing them today at 29 to 32 cents.

Retrofitting your home for energy efficiency costs money and the payback doesn’t arrive for many years. That’s why homeowners wait for government incentives before going ahead.

But you can save energy without spending money on a new furnace, front-loading washing machine or double-paned windows.

The secret is to pay attention to dust buildup in three crucial areas of your home, says Adams (also known as Mr. Dusty).

1) The refrigerator. Pull it out from the wall – make sure to disconnect it first – and use your vacuum cleaner to remove the dust that has collected on the coils.

These coils get rid of the heat that has accumulated in the refrigerator. The heat acts as a magnet that attracts kitchen dust and grime, making the whole system work less efficiently.

“You want your attic insulated, not the coils on the back of your fridge,” says Adams.

To make the job easier, you can buy special appliance casters if your refrigerator doesn’t have wheels.

The refrigerator is the biggest energy user of all the appliances in your home, surpassed only by the furnace and hot water heater.

2) The furnace air filter. It should be cleaned or replaced every month to six weeks, especially if you have central air conditioning running all summer or pets that shed hair.

Dust collects here too and makes the furnace run less efficiently. Turn off the power to the furnace first before checking the filter.

“This is a safety issue,” says Adams. “You don’t want your heat exchanger heating up too much because of the fire hazard.”

3) The clothes dryer. You may be conscientious about cleaning the lint filter inside the machine before every load. But that’s not enough.

Check the connector, a rigid or flexible plastic pipe between the dryer and the outside vent. Take it apart and clean it periodically, Adams advises, or replace it if necessary.

Again, it’s a safety issue. Fires can flare in the dryer vent if the pipe isn’t cleaned often, particularly if you’re using a natural gas-powered machine.

Another area where big savings are possible is your water heater, which consumes about 20 per cent of your home’s energy costs. Check the thermostat setting, which most people keep at 160 degrees Fahrenheit.

You can turn down the temperature and still get hot showers and clean dishes. A lower temperature also poses less of a scalding hazard to young children or elderly residents, who can’t get away in time if the water is too hot.

Turn down the thermostat to 130 degrees, Adams suggests, or 140 degrees if your household uses lots of hot water.

Also, lower the temperature on the water heater when you go away for a weekend or longer vacation. This should be as automatic as locking the doors and turning down the themostat for your space heating.

You can insulate the pipes coming out of the water heater, at least the first couple of feet that are easily accessible. Hardware stores sell tubes that fit easily over the pipes.

Here are a few other tips on saving energy when operating appliances from Natural Resources Canada’s office of energy efficiency:

  • Turn off the dishwasher during the dry cycle. Air drying works just as well. 
  • Preheating your oven isn’t required unless you’re baking. Don’t preheat for more than 10 minutes. Also, turn off the oven before the food is completely cooked and let the built-up heat finish the job. 
  • Wash and rinse your clothes in cold water. Modern detergents will get them just as clean as if you’d used hot water. The next person using the shower will thank you, because one or two loads using a hot water wash and warm water rinse will come close to draining the hot water tank.Regular maintenance helps keep your heating appliances at peak efficiency. You can locate a contractor who’s a member of the Heating, Refrigeration and Air Conditioning Contractors of Canada by calling toll-free at 1-877-411-4722, seven days a week, 24 hours a day. (It pays to keep this number handy if there’s an emergency and you need something fixed in the middle of the night.)

    Next week, we look at how to choose an Internet service provider. This will be the last column in a series on cutting household costs that began last May. On Oct. 19, we launch a new series on student finances aimed both at post-secondary students and their parents.

 

Posted in Electricity | Leave a comment

Hydro prices take flight

Posted on October 3, 2003 by Other News Sources

Dana Flavelle
Toronto Star
October 3, 2003

Electricity prices in Ontario skyrocketed briefly after a major generator, possibly another nuclear unit, was unexpectedly shut down yesterday morning.

The shutdown, coming on top of ongoing problems at Ontario’s Pickering and Bruce nuclear power plants, raises concerns about how prepared the province is to meet peak demand in the winter months.

The wholesale price of electricity soared to just under $300 a megawatt-hour, seven times the government regulated retail price of $43 a megawatt-hour, by 10 a.m. yesterday, the Independent Electricity Market Operator (IMO) said on its Web site.

IMO spokesperson Terry Young said the price spike was the biggest he could recall seeing in recent weeks. The price quickly eased yesterday after the IMO secured alternate supply, Young added.

The increase affects only large electricity users, since residential and small-business rates are frozen at 4.3 cents a kilowatt-hour.

The wholesale price, which reflects how well supply is meeting demand, began skyrocketing after a major generating station shut down at 9:21 a.m., according to reports on the IMO Web site.

The identity of the troubled station would not be released until 4 p.m. today when the IMO issues its day-old 24-hour status report.

However, the size of the power loss – 850 megawatts in total – suggests it had to be one of the nuclear units at Bruce or Darlington power stations, said Tom Adams, executive director of advocacy group Energy Probe.

Ontario Power Generation declined to say whether the generator involved in yesterday’s shutdown belongs to its network, which supplies up to 70 per cent of the province’s power. OPG owns Darlington.

For competitive reasons, the company is required to release that data only to the IMO, which can’t make it public for 24 hours, OPG spokesperson John Earl explained.

A spokesperson for Bruce Power Inc., which owns the Bruce nuclear plant, could not be reached for comment.

The IMO would say only that the station, considered one of the bigger ones, is capable of generating at least 250 megawatts of electricity, which is sufficient to power at least 200,000 homes. (The largest unit in the province generates 900 megawatt-hours,)

Earlier problems on several transmission lines, most notably one that brings in electricity from Manitoba, contributed to the shortfall, Young said. Adams, however, discounted their importance, saying that transmission lines have problems all the time.

Altogether, Ontario had more than 10,000 megawatts of power unavailable to it yesterday morning between planned outages for maintenance and unexpected ones, Adams said.

“That’s an incredible amount,” he said, noting that Ontario’s total capacity is about 27,000 megawatts if everything is up and running. The province also imports power as needed.

Demand in Ontario yesterday hovered between 17,500 megawatts and 18,500 megawatts per hour, well below peak levels reached at the height of August’s heat wave, when a problem at an Ohio power station tripped the lights across much of the northeastern United States and Ontario.

Yesterday’s shutdown comes on the heels of Saturday’s closing of two nuclear reactors at Pickering and continuing re-start problems at two Bruce nuclear units.

Both the Pickering and Bruce units were still off line as of Tuesday, according to the IMO 24-hour update released at 4 p.m. yesterday.

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Bitor seeks to increase Orimulsion prices 50%

Posted on October 3, 2003 by Other News Sources

Business News Americas (BNamericas)
October 3, 2003

the Bitor subsidiary of Venezuela’s state oil company PDVSA is negotiating with its foreign clients to increase the price of orimulsion by about 50% to US$45 a ton, a Bitor source told

The Venezuelan government’s announcement in early September that it will not sign any more orimulsion contracts and absorb Bitor’s operations into PDVSA East has caused foreign power companies to worry that PDVSA could cut off their fuel supply. However, PDVSA intends to fulfill Bitor’s existing contract obligations, the source confirmed, albeit with substantial price increases. Bitor wants “to optimize the profitability of the business,” the source said. It’s “logical” that Venezuela’s government wants to negotiate the best price it can get for its heavy crude reserves, but that doesn’t mean it should abandon companies that have already converted their plants to use orimulsion, the president of the Anzoategui chapter of Venezuela’s oil chamber, Jose Antonio Perez told BNamericas.

Bitor is the world’s only producer of orimulsion, so has its clients over a barrel, as they have already invested heavily in converting coal-fired thermoelectric plants to burn orimulsion. Faced with the alternative of Bitor cutting supplies altogether, the clients have no choice but to negotiate.

“Once these plants have been converted to use orimulsion as fuel, you definitely can’t turn around and say that tomorrow we are not going to produce any more and leave you hanging with your plant already built,” Perez said. Orimulsion, a 70:30 mix of extra heavy crude and water, currently sells for about US$32-US$33 a ton, which analysts say is so cheap that it is undercutting crude oil prices. PDVSA realized that “in an environment of declining oil prices, the thought of competing against yourself and OPEC may be thought of unfavorably by other OPEC members,” Canadian research group Energy Probe‘s executive director Tom Adams told BNamericas. In addition, “there was an expectation that orimulsion would become a very popular fuel and that hasn’t materialized,” Adams added. Orimulsion is a “good business” for Venezuela owing to its large quantity of reserves, some 267 billion barrels, and the government should even consider using orimulsion to generate power at home, Perez said.

 

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