Sunday, March 11, 2012

What is Happening to Ontario Electricity Prices

A new report from an organization called Sustainable Prosperity has put out a background report "intended to de-mystify and explain the drivers of electricity cost increases in Ontario, with a view to contributing to a full and informed public debate on the subject."

The report, written by Donald N. Dewees, is titled "What Is Happening to Ontario Electricity Prices?"
It's terrible.
Here's why.

When Professor Dewees gets to breaking down costs, he opts to compromise between pricing forecasts from a study by junk study generator Clearsky Advisors, and one by Aegent Energy Advisors.

The justification for the compromise is poor.  Having conceded that renewable generation requires redundant sources, Mr. Dewees fails to recognize the alternative costs to new wind is simply the cost of the natural gas not used (exclusive of the plant itself, and the vast majority of the operating costs outside of fuel).  Furthermore, there is a cost to lower utilization rates if cleaner coal/natural gas plants are built, and there is a maintenance/plant life cost to more frequent stops, and starts, of the generators compensating for the variability of wind (and solar).

But that's all been ignored many times before, so this wasn't very shocking.
What is shocking is Mr. Dewees' report notes Aegent's figures as originating in "Ontario Electricity Total Bill Impact Analysis August 2011-July 2015" - noted as filed here, but much of the content being on Aegent's site here.

The Aegent figures were essentially later adopted by the government in stating where the costs were going to 2015 (Long term energy plan states 7.9% annually).  Written in March 2010, the Aegent report could not included the Ontario Clean Energy Benefit (OCEB) nonsense ... all other factors in it predicted residential rates would rise a little over 3 cents/kWh by the end of 2011.
Ignoring the OCEB, mine did.
How about yours?

Beyond the walls of the Economics department at the University of Toronto, being right should count for a lot more than being fashionably accredited.

There is one good thing about "What is Happening to Ontario Electricity Prices?"
You'll know to go to Aegent Advisors if you want to know the answer

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