February 17, 2012
Drummond Drops the Ball
Don Drummond’s recently released report is all about pursuing efficiencies in public services. Can’t argue with that. But while Mr. Drummond does make a number of good electricity sector recommendations (e.g., eliminate the very wasteful 10% electricity rebate, lower the feed-in-tariff prices for solar energy, and consolidate Ontario’s municipally-owned distribution utilities) he misses the two biggest and easiest opportunities to lower our electricity bills and save taxpayers billions:
1. Cancel the Coal Subsidies
Ontario’s dirty coal-fired power plants are now on financial and operational life support. During the first nine months of 2011 the Ontario Electricity Financial Corporation (an agency of the Government of Ontario) gave Ontario Power Generation a $28.8 million per month subsidy to cover the operating losses of its coal plants. Cancelling this subsidy by putting the coal plants on standby reserve and only operating them when absolutely necessary would save Ontario $979.2 million between now and December 2014 (when the coal plants are legally required to cease operations). In his 362 recommendations, Mr. Drummond found few savings that were as large and painless as this one.
2. Cancel the High-Cost Nuclear Re-Investment Plan
Between now and 2030 the Government of Ontario is proposing to re-build the Darlington and Bruce B Nuclear Generating Stations and build two new nuclear reactors at Darlington despite the fact that our electricity needs could be met at a much lower cost by importing water power from Quebec and investing in energy efficiency and combined heat and power systems.
If you accept Ontario Power Generation’s estimate that the cost of re-building Darlington will be up to 8 cents per kWh, then the annual savings of replacing the Government’s nuclear plan with lower cost options will be up to $1.7 billion per year. More realistically, taking into account that every nuclear project in Ontario’s history has gone massively over budget – on average by 2.5 times – we estimate that the annual savings of pursuing the lower cost options could rise to $9.1 billion per year or greater. Imagine all the things we could do with $9 billion!
These are real and substantial savings for the taking. What is Premier McGuinty waiting for?
Please send Mr. McGuinty a short email (and cc me). Ask him to cancel his billion dollar subsidy for the dirty coal plants and his uneconomic nuclear expansion plan. Cleaner and more cost-effective alternatives are available now!
Ontario Clean Air Alliance
160 John Street, Suite 300, Toronto, Ont. M5V 2E5
Phone 416-260-2080 ext. 1
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