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Wind, solar contracts could cost Ontarians $58 billion, resident says  

Credit:  By Valerie MacDonald, Northumberland Today | Wednesday, February 13, 2013 | www.northumberlandtoday.com ~~

The Ontario government’s 20-year contracts for wind and solar power under the Ontario Green Energy Act will cost Ontarians $58 billion more than it should for green power, says Hamilton Township resident Stuart Henry, a retired security chief administrative officer. This will add $600 to the amount people will pay on their electric bills each year for the next two decades, he says.

“Over 20 years, Ontario residents will pay $58 billion more for the purchase of an identical amount of green energy than the New England states who buy green energy hydro power from Quebec at the real market rate of 8.1 cents per kilowatt-hour,” Henry states in a summary of his financial analysis.

Henry is so concerned at the financial provisions of the provincial Green Energy Act and the consequences to Ontario’s industrial sector, and its residents, that he has contacted the Ontario Auditor General and is urging others to do the same.

Now is the time Ontario should be making a long-term deal with Quebec when that province has an abundance of hydro and the best terms can be struck, Henry asserts.

“My concern about green projects is economics and it’s not the NIMBY (not-in-my-back-yard) issue,” said the man who lives several kilometres from a proposed wind turbine project in the Centreton area.

His actions relate to the financial burden he said he believes the Green Energy Act will strap onto Ontarians – and his concerns go back several years.

Not only does Henry say he and a lawyer met with the Ontario Power Authority (OPA) in 2010 to get more clarification about the Green Energy Act contracts that would be made with companies and individuals, but within the past month or so he has contacted Ontario Auditor General Jim McCarter. He has provided his rationale and financial figures about how Ontario’s debt will grow and how it will affect Ontario’s financial rating.

As of the end of 2012, the Ontario government debt was $273.5 billion. Henry’s estimated $58 billion more from green-energy contracts is a significant addition.

“That’s why the Attorney General should initiate an inquiry to find out how this occurred; what was the approval process all the way through,” he said during an interview this week.

Henry’s financial analysis is based on the Feed In Tariff (FIT) and the Act’s goal of creating 10,700 megawatts of green power over the next 20 years, he said. Taking what he believes is a realistic overview, he estimates that the Act’s goal would be achieved with wind power creating 80% of that and solar power 20%. His formula includes a wind power pay out at 13.5 cents per kW-h and solar at 44.3 cents per kW-h, and a rate of conservative power generation from each source. He then compares that amount of power generated through FIT and buying the same amount of green (water) power from Quebec Hydro at 8.1 cents per kW-h to come up with the estimated $58 billion extra he believes will be paid by Ontarians for green power from FIT compared to buying it from Quebec Hydro.

Henry has another concern, too.

Because contracts with OPA and the Ontario government can be “flipped” to a third party or are “assignable,” Henry believes there is a significant chance of Ontario being left holding the bag if a project doesn’t work out. If there are punitive clauses in the contracts that provide a financial penalty to financial backers putting up the capital for green energy projects if they don’t proceed, money will be spent whether power is generated or not, he argues.

This is another aspect he wants the Attorney General to investigate.

Ontario politicians really don’t know what is important to know about our energy needs, trends and the impact of the Act, Henry stressed. They should know.

That’s one of the reasons he is asking people to contact members of municipal councils to urge them not to endorse “future local wind and solar projects.”

Asked about the government’s intention to nurture a green manufacturing industry, research, expertise and jobs through the provisions of the Green Energy Act, Henry said the high rate of return to green energy producers here, “is not designed to minimize production costs” and ultimately will not allow Ontario’s green industry products to be competitive abroad. There needs to be “source parity” for that to happen, he said. While Ontario is paying 80 cents per kW-h for some smaller sources of solar power and about 40 cents for solar farm installations, Florida is paying only 10 cents, Henry noted.

The debt that is being created under the Green Energy Act is “unconscionable” and there must be an inquiry into it, he summed up.

Some of the arguments Henry makes have been discussed around council tables in Northumberland but frequently the result is local councillors agreeing it is a provincial policy direction and one for which they are not responsible.

Source:  By Valerie MacDonald, Northumberland Today | Wednesday, February 13, 2013 | www.northumberlandtoday.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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