Thibeault urged to kill costly wind and solar energy program

TORONTO - An Ontario hydro distribution company is saying enough already with the high-priced wind and solar energy the province keeps buying despite a glut of electricity in the system.

The board of Niagara-on-the-Lake Hydro (NOTL) released a statement Wednesday that asked Ontario Energy Minister Glenn Thibeault to kill the Feed-in-Tariff (FIT) 5 program — the latest round of renewable energy procurement — arguing it will further drive up already expensive electricity rates.

“We are not against renewable generation, we are against the method of how the province is procuring it,” Jim Ryan, chairman of NOTL Hydro, said in the statement. “We cannot continue to add $30 million here and $20 million there to the overall cost and not realize that this is going to have a cumulative impact. Today’s high prices are evidence of this.”

Prices being offered for the latest renewable energy purchases as of Jan. 1 ranged from 12.5 cents/kWh to 31.1 cents/kWh.

The average weighted market price for electricity this month is 2.11 cents/kWh, and at one point Wednesday was selling for 0.0 cents/kWh.

NOTL Hydro president Tim Curtis said that as the money collector for the whole system — though their share is only one part of the bill — distribution companies really hear it from customers.

“Everything from the just swearing at us and saying we’re crooks to people who understand the logic behind it but are very unhappy with it,” he said. “Why even continue with FIT 5; no contracts have been signed.”

Thibeault’s office issued a statement in reply to NOTL Hydro’s concerns, confirming its intention to go ahead with the purchase of more renewable energy.

“Generation planned through Feed-In Tariff (FIT) 5 is part of a supply mix necessary to ensure Ontario maintains a clean and reliable electricity supply through the coming decades, and is included in the planning forecast provided by the Independent Electricity System Operator in September 2016,” the minister’s office statement says. “Our government has made reducing rates for Ontarians a top priority. For example, by mandating annual price reviews of FIT prices, we have seen a significant reduction in the price we pay for renewables, saving ratepayers at least $1.9 billion over the life of the contracts.”

NOTL Hydro analyzed the financial impact on customer bills of FIT 4, the last round of renewable procurements completed last June.

Ontario hydro customers will pay an estimated $88.4 million more a year for electricity through direct rate increases and the global adjustment fee beginning in 2017-18 and continuing for 20 years, NOTL Hydro says.

The government has said that FIT 5 is the last round of this type of procurement, and prices are slightly lower than previous versions, but not a lot lower, Curtis said.