Energy (DRAFT)

Electric Energy in Ontario is supplied to customers primarily through government-mandated monopolies.  A few years ago we were threatened by or actually experienced rolling brown-outs due to lack of capacity.  (What other business asks you to NOT use so much of its product or service?)  In 2010 - 2011 we have a surplus which is being sold to energy traders at a discount who then sell it to other jurisdictions at a profit.  Low cost energy plants are shut down by the government in favour of high cost and unreliable "green" or "renewable" energy sources, increasing business costs and reducing job opportunities in Ontario. A libertarian government would remove energy production and distribution from government control and allow competitive free markets in energy.

The Problems

$30 billion "stranded debt" as a result of previously low rates mandated by government, must be paid off by current customers.

Very high cost energy from government mandated and subsidised wind and solar sources.

Power system managed by politics for other than economic reasons.

The Green Energy Act and the resulting government deals with "Green energy" companies.

The Cause

Government interference,
lack of competition
Low rates mandated by government which failed to recover fully amortized costs to, in effect, subsidize and attract manufacturing.
A focus on large power plants with high transmission costs instead of co-generation and smaller, local plants. 

The Solution

Private companies should be free to invest in power generation and energy transmission facilities. 
Customers (possibly at the condominium/subdivision level) should be free to choose any supplier.  Municipalities should not be able to grant exclusive charters to any company.  (See References below for an article in Reason magazine about competing electricity suppliers.)


Ontario's Green Dream - This editorial comment in the National Post reports that most of Ontario's green plan has been abandoned, wasting tens of millions of taxpayer dollars as well as the money invested by private landowners in solar panels.  One more example of why government shouldn't be in the business of business, including the energy business.

What price green energy in the National Post (April 27, 2011) is a report about the policy paper from the Frontier Centre for Public Policy titled Green Jobs.  It reports that "Green programs in Spain destroyed 2.2 jobs for every job created while the capital required for one green job in Italy could create five new jobs in the general economy."  The actual cost of each Spanish 'green job' was $791,597.

No relief in sight from rising costs  by Peter Gallant of National Post takes a critical look at the 2010 annual reports from Ontario Power Generation and Hydro One and finds a number of red flags.

Ontario's Power Trip is a series of articles written by Peter Gallant in early 2010.  He shows how Ontario is getting less and less electricity at higher and higher prices. Gross revenue is up 14.2%, Operations, Administration and Maintenance costs are up 44.9%, and the number of employees is up 32.9%, but generating capacity is down 15.8% and power sold is down 33.8%!  He claims it's only going to get worse.   

Ontario’s power users zapped in export deals: This article from the January 22/10 Toronto Star tells how Ontario electricity customers have subsidized power exports to the tune of $1 billion since 2006 — with most of the money ending up in the pockets of energy traders.

The Nuclear Liability Act (1976) requires the operator to pay all liability up to $75 million directly without any finding of negligence if there is an accident at a nuclear reactor.  It also authorizes the establishment of a government commissionto oversee the balance of claims above $75 billion.  A bill (Bill C-15) was introduced in 2007 to extend the liability limit to $650 million but has yet to pass.

Aldyen Donnelly: An in-depth look at Spain’s disastrous renewable energy policyThis article from Energy Probe looks at experience with high cost Feed In Tarrifs (FITs) in Germany and Spain.  It recommends  legally-binding renewable energy mandates (called Renewable Portfolio Standards, “RPSs” or Renewable Energy Standards, “RESs”, depending on the jurisdictions).  The RPS mechanism generally places an obligation on electricity supply companies to produce a specified fraction of their electricity from renewable energy sources.  Donnelly argues that FITs (like Ontario has) create investments which are unsustainable without perpetual subsidies at current levels.  Renewable Energy Standards, properly designed, can prove out as efficient and effective government mechanisms to attract risk-oriented investment in low impact renewable energy. 

Two Utilities are Better Than One: by Jan Bellamy in the October 1981 issue of Reason Magazine.  In Lubbock, Texas, two electric utilities are competing for people's business. How does it work? Could competition be the answer to rising electric bills?