This is comment I made on Parker Gallant's article on the Wind Concerns Ontario site.
Parker, your recent The Real Cost of Electricity and Who gets the BIG Money! cited some numbers in the 2011 Yearbook of Distributors that surprised, and troubled, me.
$10,361 million is an interesting number for “Cost of Power and Related Costs.” It’s interesting as the Independent Electricity System Operator (IESO) reported an average Hourly Ontario Energy Price (weighted) of $31.47/MWh on a total market of 154.3 million MWh, plus a total Global Adjustment of $5,309.6 million, which constitutes a total market value of only $10,149 million. I am of the impression the global adjustment contains all payments for conservation and supply, so it’s a little disconcerting that the figure you note in the OEB Yearbook is over $200 million higher than the IESO figures would indicate.
You reference the yearbook total of 126.2 TWh, and that is close to what the IESO 18-month outlook shows for LDC (local distribution company) consumption for 2011 (table 3.3.3 tab of this spreadsheet). That figure does include line losses and “generator consumption”, but not ~16TWh of ‘wholesale’ customer consumption, or the 12.8TWh of exports. The OEB Yearbook and IESO statistics don’t totally agree (due to billing cycles), but they are close and the total market (all generation plus all imports, or all consumption, line losses and exports) is ~28-29TWh greater than the LDC totals.
So the LDC figures you cite collect more than the value of the entire market ($10.36 billion of $10.15 billion), but the LDC’s are only about 82% of the total market.
I am confused.
Adding to the confusion are the export and import statistics that the Ministry of Energy uses in claiming exporting benefits Ontario. They show $418.9 million in revenue from exports. This would indicate that either we are paying wholesale customers (the only other group) over $600 million a year to consume electricity, or that the OEB yearbook’s “Power and Related Costs” includes significant charges that are either not for the electricity, or constitute a healthy mark-up on the commodity costs, indicating the cost of generation is not being treated as a flow-through charge.
Because I don’t think the starting point makes much sense, I won’t spend too much time investigating your methods in concluding non-OPG supply averaged 12.5 cents/kWh ($125/MWh), but I will note my calculations don’t yield drastically different figures. I estimate Bruce Power received ~$58.65/MWh for 36.6TWh of generation, and all other non-OPG generators received about $107.07/MWh for 28.9TWh of generation, or slightly more than double OPG’s rate. The difference between this $107 and your $125 figure would, I think, come from the transfer of cost of purchased powers from export, and wholesale, customers to those serviced by LDC’s (us).
While I am confused that the figures in the 2011 Yearbook of Distributors provide a “cost of power” for the LDC’s that exceeds the entire market value, I share your conclusions that payments were extracted from ratepayers to line the pockets of selected groups, I think those groups include LDC’s, who seem to be collecting a handler’s fee on the commodity.
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Reference workbook with IESO Table 3.3.3, Global Adjustment, 2011 totals and generation estimates is here
