November 19, 2014
Quebec electricity would save Ontario consumers $14 Billion
As the Ontario and Quebec provincial cabinets meet tomorrow to discuss energy, there is one natural topic of conversation: How can we better integrate our electricity systems to save a whack of cash?
Our neighbour in Quebec has a problem. Their electricity is fetching lower and lower prices in export markets. We have a need: A cost-effective source of power to replace the energy from our aging and expensive-to-rebuild nuclear reactors.
|The Darlington Re-Build project “carries enormous risks”
Ed Clark, Chair of the Advisory Council on Government Assets and former CEO, TD Bank
The solution is not exactly rocket science. We strike a deal for power at a price 30% below what we’ll pay in a best-case scenario for juice from a re-built Darlington Plant. Quebec sells us power at a price that is double what they are currently getting for the bulk of the power they sell to the U.S. Both provinces come out ahead by about $14 billion over a 20 year contract.
It would cost just $500 million to put in place the transmission system upgrades needed to take full advantage of Quebec’s power here in Ontario. That’s less than 4% of the cost of re-building Darlington (again, based on optimistic estimates of the re-build cost). The investment would pay for itself in less than one year.
In the Long Term Energy Plan released last year, the Ontario government said it will “pursue contractual arrangements for firm imports where cost effective and well matched to Ontario’s electricity needs.” We know our needs are well matched, with Quebec electricity demand peaking in winter and Ontario’s in summer, and we know a cost-effective deal is within reach. So we expect that Premier Wynne and Premier Couillard will be making this a top agenda item at their joint cabinet meeting.
Premier Wynne might also want to consider why her power agency is in secret negotiations with privately owned Bruce Power for a contract that could be worth up to $111 billion without first considering lower cost and more flexible options, like Quebec water power. Any deal with Bruce Power should be sent to the Ontario Energy Board for review to ensure it is actually in the best interests of Ontario consumers and ratepayers.
Please send Premier Wynne a message urging her to make a deal with Quebec instead of wasting billions of dollars on high-risk nuclear projects. It is the right thing to do for both provinces.
And read our new report, Ontario’s Long Term Energy Plan: A One Year Review for more on how we can make more rational choices when it comes to electricity in Ontario.