July 29, 2017
Wynne Liberals must top Hydro One’s U.S. coal plant purchase: report
The Kathleen Wynne government should put a stop to Hydro One’s purchase of a “dirty coal plant” in the United States, a new report by an environmental group says.
Setting Hydro One’s Priorities Straight, to be released Monday by the Ontario Clean Air Alliance, also calls for the government to force the massive utility to obtain approval from the Ontario Energy Board before pursuing more expansion in the United States.
Spokesman Jack Gibbons said Hydro One should focus on lowering greenhouse gas emissions and costs for its own 1.3 million customers.
“The purchase is totally inappropriate,” Gibbons said. “An Ontario public utility should not be buying a dirty U.S. coal-fired power plant.”
Hydro One has announced it has struck a deal to purchase Avista Corp for $6.7 billion.
The U.S. utility owns a 15% stake in two units of the Colstrip coal plant in eastern Montana, a significant source of greenhouse gas emissions and responsible for an 800-acre coal ash waste pond described by Sierra Club as “toxic soup.”
Colin Nekolaichuk, a spokesman for Ontario Energy Minister Glenn Thibeault has said in an email that the Avista purchase was “a business decision…the government is pleased at the benefits this will provide for all Ontarians.”
The rates Hydro One customers pay are set by the OEB, whose mandate is to protect customers and ensure those rates reflect the cost of servicing and maintaining their system, Nekolaichuk said.
Hydro One said in a statement that Avista has a strong environmental track record, and is ranked among the cleanest power producers in the U.S. for CO2 emissions.
The OCAA report says after phasing out its five coal-fired plants and passing the Ending Coal for Cleaner Air Act to prohibit this type of electricity generation in the province, Ontario as the single largest shareholder in Hydro One buys the second largest coal-fired plant west of the Mississippi and one of the nation’s top 20 greenhouse gas-producing power plants.
Instead, Hydro One should improve and expand its ability to import relatively low-cost hydro electricity from Quebec, the report says.
“According to a May 2017 IESO report, for a cost of approximately $220 million, Hydro One could upgrade its transmission system to boost our firm import capability to 2,050 MW,” the report says. “This would allow Quebec water power to meet our peak hour demands on hot summer days instead of using greenhouse gas emitting gas-fired power plants.”
Hydro One should also focus on conservation measures that would help its customers reduce their power use by as much as 31% by 2035, a potential savings of $1.4 billion on energy bills, the report says.
Under the status quo, electricity consumption in Ontario is expected to decline over that period by 12%, which would reduce customer bills by $649 million, the report says.
Hydro One should not be able to make any investments outside the country until it has implemented all possible measures to reduce costs for its customers, Gibbons said.
“Their first priority must be to do what’s best for their domestic customers,” he said. “Public utilities are not just like any other corporation — they get a monopoly from the government and in return they’re obliged to act in the public interest.”
Although the government has sold off a majority stake in Hydro One, it could still use its legislative and shareholder clout to keep the utility in line, Gibbons said.
1. Ending Coal for Cleaner Air Act be amended to prohibit Hydro One from purchasing coal-fired electricity generating stations anywhere.
2. Ontario government direct Hydro One to expand its capacity to import power from Quebec.
3. Ontario government direct Hydro One to pursue all energy conservation and efficiency opportunities that can cost-effectively reduce its customers’ electricity bills.
4. Ontario Energy Board Act be amended to require OEB’s approval for investments by Hydro One outside of Ontario, and be approved only if net benefit to Ontario consumers, utility already pursuing all domestic investments to lower energy bills.
(Source: OCAA’s Setting Hydro One’s Priorities Straight)