Ontario lost between $732 million and $1.25 billion over the past two years selling surplus clean electricity outside the province, an analysis by the Ontario Society of Professional Engineers (OSPE) estimates.
That’s the difference between what Ontario agreed to pay to produce nuclear, water, wind and solar power, and the bargain basement price it sold it for on the international market.
Energy expert Paul Acchione, OSPE’s past president and chair, said excess clean electricity should be offered first to Ontario businesses and residents at that lower wholesale cost.
“This represents a year’s worth of power for more than a million homes that Ontario has sold to other jurisdictions for less than it costs us to produce,” Acchione said. “Ontario ratepayers are essentially subsidizing hydro bills in places like Michigan and New York to the tune of $500 million per year.”
Only after all possible domestic demand has been satisfied should the provincial electricity system try to sell off its extra clean power to other jurisdictions, he said.
Instead, Ontario has been directly exporting excess clean energy to adjoining power grids since 2014, the OSPE says.
“You don’t build clean capacity for export – that’s suicide because you can’t make enough money on the export market,” Acchione said Tuesday. “If you have some extra of the clean electricity you sure as hell don’t want to export it. You want to use it yourself.”
The OSPE report touched off a debate during Question Period Tuesday with Progressive Conservative MPP Todd Smith demanding if the Liberal government had actually lost almost $1.25 billion exporting power.
“The numbers from the engineers are staggering,” Smith said. “We’re subsidizing power for Michigan, New York and other neighbouring jurisdictions and to make matters worse, they’re poaching our jobs because they’re taking our electricity at a low cost.”
Premier Kathleen Wynne said the Independent Electricity System Operator (IESO) estimates that electricity exports save Ontarians hundreds of millions of dollars each year.
“This net benefit to Ontario was $236 million last year,” she said.
The provincial government number includes the export of natural gas generation, which is excluded from the engineers’ report.
A statement from Energy Minister Glenn Thibeault’s office says that the “net benefit” to Ontarians was $320 million in 2014 and $300 million in 2013.
“We are obligated as a province to produce enough electricity to meet North American reliability standards,” the minister’s office statement says. “Our electricity supply provides grid reliability and affordability which we lacked before 2005, when Ontario was a net importer of electricity. That lack of reliability was partially responsible for the province-wide blackout of 2003, which was an enormous economic hit.”
Acchione said the $236 million in net benefit the government estimates it earned last year does not represent profit to Ontario hydro customers, but rather is a reduction in the loss that the system is incurring by having that capacity idle, he said.
“That’s not the way you do accounting in Canada; you can’t say you’re making a profit unless you pay all your costs,” he said.
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