02 August 2012

If Ontarians jumped off the wharf… #nlpoli

Ontarians subsidized electricity exports from their province to the tune of about $2.50 a kilowatt hour according to a recent report by the Council for Clean and Reliable Energy and covered by thestar.com.

The total works out to about $1.2 billion annually.

About 80% of Ontario’s electricity generation comes from contracts with producers that exceed the current market price for electricity.  Ontario consumers pay a surcharge to make up the difference.  Customers outside Ontario don;t pay the charge even though the electric comes from generators inside Ontario.

Accord to The Star:

…The average market price for energy so far this year has been 2.06 cents a kilowatt hour; the global adjustment has been 5.34 cents a kilowatt hour.

Two take-aways for people in Newfoundland and Labrador:

  1. The Conservative/Nalcor plan for Muskrat Falls hatched during Danny Williams’ tenure and continued by Kathy Dunderdale is to make consumers in this province pay full price for Muskrat Falls plus profit.  Nova Scotians will get electricity for free.  Nalcor doesn’t have any other customers for the power.
  2. If Nalcor does wind up selling any Muskrat Falls electricity on the “spot market”, a subject Steve Kent loves to tweet about, you can bet that Steve’s plan is for ratepayers in places like Mount Pearl and Paradise to subsidize the sales.  Someone should ask Steve  - and all his pals - to chirp a cheery explanation as to why they want to do that. 

And if they deny it, you know they are just full of it.  You see, Muskrat Falls electricity will cost at least 7.7 cents per kilowatt to make, according to Nalcor’s creative accounting approach.  if you use the usual method for pricing consumer electricity the cost is triple that.

Anyway,  if electricity is wholesaling for two cents per kilowatt hour, then Muskrat Falls is already more than triple that, again using Nalcor’s optimistic price of 7.7 cents a kilowatt hour.

But there’s more.

Someone will also have to pay to get the electricity across Quebec. Double that 7.7 cents and you would get a decent approximation of what MF electricity would cost to get to Ontario. Since consumers in Ontario don’t pay those kinds of prices wholesale, you can bet someone is going to have to shoulder the burden.  That burden could work out to be something like what you  currently pay for your own electricity!

If subsidising exports of electricity is good enough for Ontario, apparently politicians in this province seem to think it’s a good idea for us to do it as well.

Truly amazing.