Ontario customers paid $52.8 million last month to subsidize electricity users in the United States and Quebec.

By Don Butler,

Postmedia News January 11, 2011


Ontario producers sold a record amount of electricity to neighbouring jurisdictions in December. But if you think that's good news, think again.

What it really means is that Ontario has so much surplus power, it has to unload it at whatever price it can get. And lately, market prices have been well below what Ontario residents pay for the same electricity.

Because wholesale electricity prices are in the basement, "we're losing money on every kilowatt hour that crosses the border," says energy consultant Tom Adams. He calculates that Ontario customers paid $52.8 million last month to subsidize electricity users in the United States and Quebec.

There was so much surplus electricity flooding the market, Ontario generators even had to pay users as much as 13 cents a kilowatt hour to take surplus power off their hands at times.
Typically, those negative prices only apply to a few isolated hours. But on New Year's Day, the hourly Ontario energy price for the whole day was negative, averaging -$20.29 per megawatt hour -- the lowest daily average since records began.

As a result, Ontario power generators paid $1.46 million to external markets to rid themselves of power on Jan. 1, according to the province's Independent Electricity System Operator.
In theory, Ontario businesses and residents also benefit from low or negative wholesale power rates.

But those savings are offset by something called the global adjustment charge.
Global adjustment, formerly known as the provincial benefit, accounts for the difference between the spot market price and the minimum rates paid to regulated and contracted electricity generators.

Those rates vary widely, depending on the generation source. But right now, they're higher -- sometimes much higher -- than the wholesale price, which averaged 3.79 cents per kilowatt hour last year.

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