Thursday, September 23, 2010

PROPOSED CHANGES TO OUR ENERGY SYSTEM REVISITED

I posted a simple version of this in the Spring. Time to revisit it and expand. I feel strongly that this is the only way we are going to get control of the entire energy sector, and out of the hands of government.


Ontario was once the powerhouse of industry with cheap power available to run that industry. Today we have the most expensive power in North America save two or three states in the US, and industry is leaving, or not setting roots here, because of that. The first priority of any next government is to restore Ontario to a cheap power regime and entice industry to return to the Province.

The claim is that energy prices will just keep going up. Maybe, maybe not. That depends on the ingenuity of those of us who think that Ontario’s future is in cheap power, not more expensive power.

Modern civilization runs on one main, core, aspect: lots of net energy available at a very cheap cost. Every aspect of this civilization is build, and requires, large net cheap energy.

A modern civilization requires that the cost of that net energy be cheap enough for everyone to afford. Not only is energy directly needed by people to power and heat their homes, but every item they buy has an energy cost in it.

Discretionary income, monies available to people to buy non-essential items, requires that energy not be a large component of the essential expenses. Increase the cost of energy, and people have less money for the "frivolous" items, such as going out for dinner, hobbies, charitable activities, traveling to visit family, or even vacations. Those in the lower income brackets, who have little or no discretionary income, will have to do with less of other necessities, like food, when energy prices increase.

With people spending less on food or "frivolous" items that means less of these items are purchased, that means less money for the companies and stores that provide those items, that means people laid off in those industries. Thus increasing energy costs to consumers means people lose their jobs, who then pay no taxes and must be supported by the government's IE benefits, which increases government expenses, which they either borrow or get from you in higher taxes, squeezing you even more.

Add to that when energy costs increase, industry pass those costs to the consumer. When retail outlets have higher energy costs they add even more onto the price of those items. This in turn puts more items out of reach, so fewer are sold, meaning layoffs.

To add salt to the wound, the Bank of Canada sees the increase in energy as core contributor of inflation, adding non-core item price increases due to the core energy price increase, and there is an over all increase in inflation. BoCs reaction is to increase interest rates in an attempt to throttle those increases.

Except it can't because energy increases are not curtailed by increases in interest rates because as people consume less energy to try and save on costs (where physically possible), the energy providers ask for more increases to compensate for the loss! (ie the Global Adjustment. In Germany when demand is low they PAY consumers to use more. Here we charge people more because the producers are losing. The GA does not force power producers to become efficient when demand is down, such as in this recession.)

What a mess increasing energy costs precipitate! It's a vicious positive feedback cycle.

But there is more.

Those who wish for us to get off, completely, from fossil fuels want us to move more to electrical power, specifically for heating (ground source heat pumps), and electric vehicles. Electric vehicles will put the biggest demand increase on power production. One can do the calculation and see that in order to replace the 15billion liters of gasoline Ontario consumes every year with electric vehicles would mean we would have to more than DOUBLE our nuclear capacity.

They want us to move to more electrical devices to curb fossil fuel use, but they want to charge more for that power. Quick way to kill the economy. If fossil fuel prices are poised to increase, electrical power must be as cheap as possible to be a viable alternative to FF use.

The bottom line is higher power costs, which increases prices to consumers, is the root of the problem. It was suggested in the meeting that we provide choices to consumers on what type of payment options they wish to buy into. Sounds good on paper, but that is just tinkering with prices. It does not fundamentally change the costs to provide power in the first place. No pricing options are going to stop prices from rising as costs to produce power keep rising.

We must take cost increases head on. We need a fundamental top down change in how power is produced, administered, and managed in this Province.

Thus this is what I propose should be done. The OPA should take over the role of the OEB, and incorporate the IESO as part of OPA (or some new agency). It should be funded from the sale of power, not the government, and an arm’s length organization. They implement and govern the power system of the province. They would be responsible for buying and selling of power in the province. They would do all billings of electrical use, not H1 (H1’s recent predatory nature to consumers makes them radioactive to a future new government, they have to lose billings).

They would also be responsible for funding of all energy production projects. The President of this organization is appointed by the Ontario Energy Board of Directors (see below), and reports only to that board, not the government.

A new board, Ontario Energy Board of Directors (OEBoD) would be created replacing the OEB, is to be restructured to be just a board, funded by the Provincial Government, but no one appointed by the government. The board members would consist of the following people in no specific order:
-- Minister of Energy (The minister not someone he/she appoints)
-- Chief Executive of the OPA
-- One appointee from the OPG
-- One appointee from H1
-- One appointee from retailers and municipal distributors

None of those positions can be Chair of the Board.

The rest of the board, some 8-12 seats, would be one appointee from various associations of consumer stakeholders only (no advocacy groups) including from industry, farming, home owners. Any organization of consumers only would be free to apply for a seat at the board approved by the board. A minimum of 8 people would be required. That Board of Directors reports to the Government, but not directed by the Government.

The Chair would be voted from that group only, with a maximum of 2 years in that position.

The Board's duties would be to set the goals and directions of future energy production and transmission in the province. They would set regulations and prices. They would be responsible for approving new production based on facts and evidence, not what is considered politically correct, or what some political or environmental advocacy group wishes to peddle.

Anyone would be able to present their case to the Board, including the suggestion of price options should the next government wish to go that route. Board sessions would be entirely public similar to how Congressional Hearings are done in the US. Cross-examination would be conducted, and expert witnesses called to testify.

Once all submissions are completed, the Board would vote requiring a super majority (75%) to confirm a plan. The Board would then order the OPA to carry out the plan.

This process would put the production of power in this province into the hands of the consumers of that power. This is what is required when producers of power have a monopoly and the political party in power has an agenda based not on science, but ideology.

Is this proposal workable and has a possibility of implementation? It would mean appending or repealing a few Provincial Acts. Thus it is up to the voters.

67 comments:

  1. Interesting proposal. I agree that electricity has been a political pawn for far too long and that it's far too important for the vitality of the province to leave to politicians who are more concerned about getting re-elected (see: Ernie Eves).

    Few things I'd like to see fleshed out in your proposal

    - "It should be funded from the sale of power". Explain this more. What is the funding model.
    - The proposal seems to be very Hydro One focused. Yes, they account for 25% of the customer base in Ontario, but what about the other utilities in Ontario? I would think Toronto Hydro (who is about 12.5% of the customers in the province) would want to have some say in this new organization.
    - If this new organization is responsible for billing, are you in essence saying that the LDCs should be done away with? If not, what is their role in this new structure?
    - Who looks after the maintenance and build of Transmission and Distribution projects? What about approval and funding?

    ReplyDelete
  2. Didn't see this comment until today. I'll answer the questions.

    1) The OPA would buy all power from all producers at specific rates according to the costs of producing that power. The goal would be to get as close as possible to not for profit and at cost power production. The OPA would then sell that power to consumers at a higher rate to cover their costs only.

    2) No, not Hydro One focused. If anything this removes all the teeth of H1, making them only a transmission component of the system. So would the other city owned utilities. Transmission only. OPA would do all the billings for all Ontario consumers.

    3) They would be responsible for their own distribution networks.

    4) H1 and city utilities would be responsible for everything structural from producer to consumer's meters. All approvals would be done through the OWBoD. Transmission funding would be a separate line item on your bills as it is now, but the rate would be approved by the OEBoD.

    ReplyDelete
  3. Hydro horror story 2
    Friday, February 11, 2011
    Re Here’s Another Hydro Horror Story, letter, Jan. 31:
    Here is my ripoff story (or is it a legal scam?) from the hydro bill for my summer cottage:
    Oct. 4 - Oct. 31, 2010 — 18 kw/h $1.17
    Nov. 1 - Jan. 11, 2011— 43 kw/h $2.76
    Total: $3.93
    Delivery and regulatory charges $70.11
    Debt retirement charge $0.40
    HST $9.68
    Total: $84.12
    Less Clean Energy Credit $0.40
    Total bill for 61 kw/h of electricity $83.72

    I only use my cottage during the summer months, and to pay these delivery and other rates and HST every month is ludicrous.

    Frank Brewer
    WW II Vet. - 86 yrs.
    Thunder Bay

    ReplyDelete
  4. nymous said...
    I have soo many hydro horror stories...I don't know where to begin...first off they are thieves and I am horrified with the bills ... my nerves are wrecked..I have also been cut off from hydro a couple of times.

    Three people in the home and my = billing was 500.00 a month..I don't know what for..new wiring in my home..not an old home..very compact..I don't us the dishwasher...most laundry hung outside..UNBELIEVABLE.

    I fought to not have this metre installed on my property..thought I had a choice...it is the friggin mark of the beast..evil. Yes, they can monitor our usage hourly etc..but what else do they monitor?

    The amount of money I spent on hydro the last three years..I could have been off the grid by now..NO lie....

    Everytime you turn around new frigging bill..unexplainable charges etc...

    They cut my service down to 15 amps one very cold northern ontario winter..They know I fight with the thieves so ... I am always prepared when the power goes....I didn't pay my bill for two months and managed find on 15 amps..it can be done...LOL

    It's a good thing noone comes on my property anymore to read my meter...that's all I am gonna say!
    I have signed petitions ... etc..

    What will it take to take these Global elites down once and for all!

    Last month my hydro bill...actual useage was 76.00 then of course delievery 171.00 and all the friggin crap attaced to it...486.00 later..

    THIEVES, THIEVES, THIEVES..LETS JOIN FORCES AND MARCH THESE BASTARDS OUT!!!

    NAME THE TIME AND DATE..!

    ReplyDelete
  5. I feel like Richard said that there has to be a complete change with the way energy is handled in Ontario, for private homes and business.

    Energy is essential to a business setting up in Ontario or indeed to someone deciding to make Ontario there home. This is the same with setting reasonable property taxes, availability of trained manpower, clean water, hospital facilities, schools, or any other essential needs.

    Raising the cost of electricity through the roof hurts everyone and this includes the business aspect that brings the jobs and employs people, without which we will be a dead province.

    Hydro One is known all across North America and in Europe for its high rates, might it not be better for Ontario to be known as a nice place to live and raise a family, perhaps retire and live in dignity rather than one room due to the cost of power.

    I wonder how many elderly people end up in hospital because of malnourishment or cold due to trying to save money on electricity or food. Further I wonder how much this costs the medical system or is it a plan to kill off the older people?

    Quebec looks better every day!

    ReplyDelete
  6. To answer your question about how the elderly or the disable in this province are managing we are't able to. My only income is a CPP disability pension of $1032.00 a moonth. My Hydro bill just came in this month and it has risen to $219.57 last months was $190.47.I do not have a dishwasher I do not use a clothes dryer anymore. I shut the heat off in April I could go on and on but there is no point. Our politicians DO NOT CARE they are only out for themselves. I am not sure society cares anymore but if they do they had better join together today and save what we have before it is all gone and their children have no future.

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