May 26, 2018
Ford and Wynne wrong on electricity costs
NDP and Greens have the right idea about closing Pickering for cheaper opportunities, writes Angela Bischoff
If provincial party leaders get their campaign pronouncements right, the next government at Queen’s Park will have a real shot at bringing electricity costs under control, with a least-cost energy strategy that saves ratepayers $1.1 billion per year.
But the path to that result is not what conventional wisdom would have predicted. Two weeks in, the party leader trying to claim the mantle of fiscal responsibility is going all-in on an unnecessary, multi-billion-dollar nuclear boondoggle. It’s the New Democrats and Greens — the two parties Doug Ford is scrambling to push back — that are advocating for a cost-effective strategy that involves closing the Pickering nuclear plant on schedule and replacing its expensive electricity with low-cost power imports from Quebec.
It’s inexplicable and sad to see Liberal leader Kathleen Wynne following Ford’s lead after her government opened the door to a long-term power purchase from Quebec. But stranger still is Ford’s apparent disinterest in lower-cost alternatives to propping up one of North America’s oldest nuclear stations.
With the highest operating costs in North America, Pickering has played a major role in driving up electricity rates and triggering high hydro bills as an election issue. Ford likes to tout his business experience as a qualification for the premier’s chair, but if this is the level of judgment and analysis he’ll bring to Queen’s Park, we should all be afraid, very afraid.
Of course, Ford’s allowed to make up his own opinions on the campaign trail, just like all the other party leaders. But nearly two years after another fraught election brought the terms “fake news” and “alternate facts” to the mainstream, he makes up his own data at his peril.
With all the facts and arguments supporting the Pickering shutdown, and the majority of Pickering residents supporting the move, the momentum in the campaign is leaning in that direction.
• The last few days have seen some wildly inflated estimates of the number of jobs affected by a Pickering shutdown. The actual head count at the facility is 1,900. Those jobs matter, but it’s a false sense of security to string those workers on for a few more months or years before the plant inevitably falls off the grid. Research by the Ontario Clean Air Alliance shows that a decision to begin decommissioning Pickering on schedule in August would sustain workers’ jobs until 2032 and match up with international best practices.
• Electricity from Pickering costs 10 times as much as recent supplies from Quebec. Pickering’s electricity costs 9.2¢ per kilowatt-hour, based on numbers from Ontario Energy Board hearings. In 2017, according to Ontario’s Financial Accountability Office, the province imported four billion kWh from Quebec at the low, low cost of 2.2¢ per kWh.
• Hydro-Quebec is offering Ontario a 20-year, firm supply of electricity at a cost of 5¢/kWh. That’s more than the 2017 price, since “spot markets” for electricity ricochet up and down. But it’s still 46 per cent less than continuing to run Pickering and offers the golden opportunity to lock in a low rate for two decades.
• Ontario consumers sell expensive Pickering electricity to the United States at a financial loss. In 2017, we paid $737 million for the privilege. During periods when power demand is low (at night and on weekends), an inflexible nuclear plant like Pickering can’t be ramped down, so the province ends up with a power surplus. We sell that electricity at just 1.6¢/kWh, less than one-fifth of what we pay to produce it.
The Canadian Manufacturers and Exporters had it right last year in a submission to the Ontario Energy Board. “OPG’s (Ontario Power Generation) plan to extend operations at Pickering is not economically feasible and, far from producing savings for ratepayers, may increase the price of electricity service in Ontario,” the association said.
It’s heartening to see Andrea Horwath’s New Democrats and Mike Schreiner’s Greens heeding the manufacturers’ call. It’s hard to understand why Doug Ford and Kathleen Wynne haven’t got the memo. But they still have two weeks to get on board with the decision that will shape a cost-effective electricity future for Ontario.
Angela Bischoff is Director of the Ontario Clean Air Alliance