Did you know that your Hydro payments are supporting cheap power in the U.S.A????

Posted: September 18, 2013 in Uncategorized

Talk about “rubbing salt in our wounds” when you have to “cough up” extraordinarily high electrical prices here in Ontario!

Not only do we pay for Wind Turbines to NOT produce any meaningful electricity but we also “subsidize” U.S. electrical customer’s low price of power being exported to Michigan and New York.

Of course that is the definition of being a good neighbour and helping fellow citizens afford a good quality of life, but give me a break!

When we here in Ontario are faced with energy poverty to support a foreign country’s power usage then something has gone terribly wrong with our energy sector and it’s manager’s objectives.

Not only are we paying inflated electrical bills but the high cost of electricity in Ontario is costing Ontario jobs and Industry while making competitors in a foreign market to attract that lost industry and jobs to their shores!

Sounds a bit Orwellian? That’s an understatement.

Here’s a great idea. Run some transmission lines from New York and Michigan back into Ontario so we consumers can sign up with some U.S. power suppliers and take advantage of our cheap power south of the border!

Parker Gallant and Scott Luft: Michigan and New York’s best friend–Ontario

(September 18, 2013) The press releases flowing from the Ministry of Energy’s offices have been many over the past several years and claim a variety of wonderful things despite the mundane attributes of the electricity sector.

One such release dated January 12, 2012 claimed Ontario earned $13 million by exporting its surplus power in December 2011 and that it “keeps costs down” for ratepayers. It also said 20,000 jobs had been created and that the GEA was on track to create 50,000 jobs by the end of 2012. Fast forward a year and a half to a press release dated June 20, 2013 about the revised Samsung contract which claimed that the GEA had created just 31,000 jobs.

The latter claim indicates that the target was missed by at least 19,000 jobs. We now know that most of those jobs were short-term construction jobs to erect wind turbines and install solar panels. We no longer see press releases that claim we earn money from selling our surplus power to the likes of Michigan and New York, perhaps because the Auditor General in his 2011 Annual Report stated that “from 2005 to the end of our audit in 2011, Ontario received $1.8 billion less for its electricity exports than what it actually cost electricity ratepayers of Ontario.” When you examine the Independent Electricity System Operator’s data you quickly learn why the Ministry no longer brags about earning revenue from exports or keeping costs down for ratepayers. The exporting of our surplus power was the subject of a joint article over two years ago but the impact at the time was at a lower dollar level.

Looking at data for the first eight months of 2013 and comparing it to the same period in 2012 discloses that while we are exporting more power (an increase of 23% year over year) it is costing Ontario’s ratepayers more. For the first eight months of 2012 we sold Michigan and New York 8.3 million megawatt hours (MWh) or enough to power over 800,000 homes and for the first eight months of 2013 Michigan and New York bought 10.1 million MWh or enough to power over one million Ontario homes. The market value (Hourly Ontario Energy Price) of power sold to NY and Michigan in 2012 indicates approximate revenues of $182 million and $262 million for 2013. On the surface it makes it appear that Ontario earned $80 million more but that sale price doesn’t include what we Ontario ratepayers refer to as the Global Adjustment (GA) which is described by IESO as:

“The Global Adjustment (GA) is the difference between the total payments made to certain contracted or regulated generators/demand management projects, and market revenues.”

The GA is the huge basket that picks up the difference between the guaranteed “contracted” generation and the market price (the amount we sold our power to Michigan and New York for). That basket has been growing at an incredible pace over the past few years as renewable energy (wind and solar) are added to the grid.


What that means is that Ontario’s ratepayers wound up subsidizing those export sales. We estimate that in the first eight months of 2012 Ontario’s ratepayers picked up the GA costs of $420 million and in 2013 the subsidy bill was $584 million or an increase of 39% for the same period. Put another way; for each kilowatt hour (kWh) of exports in 2012, Ontario subsidized GA costs of 5.1 cents per kWh and for the same period in 2013 that subsidy had jumped to 5.8 cents per kWh. At the time of the Auditor General’s report, only 20 months ago, the subsidy was estimated to be 3 to 4 cents per kWh.


  1. barbara says:

    What’s going on at OWR?

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