Friday, November 9, 2012

Ontario's IESO Abandons Consumers, and the Market

Ontario's Invalid Electricity System Operator (IESO) had a surprising conclusion to the stakeholder initiative they tagged SE-91.
They ignored everything, abdicated any responsibility they may have had to ratepayers, and pandered to the politicians that have been paying them extremely well during the collapse of market pricing in Ontario; the most recent 12 month period has seen an average HOEP market price drop below $25/MWh while Ontario's residents pay about $80.
The System's Operator 
The appropriateness of the wind and solar floor price values and the need for a separation between those prices and the prices set for flexible nuclear generation. 

At this time the IESO Board is being asked to set ONLY the flexible nuclear floor prices... Other considerations, such as Ontario Power Authority contract negotiation advancement, may also be considered in determining the floor  price values and the separation for wind and solar relative to the flexible nuclear floor. 

Floor price values should represent the true avoidable/marginal cost.
Wind and solar cost considerations will be taken into account during the 6 month review process noted  above. With respect to the flexible nuclear floor price, the IESO continues to recommend $-5... it is  the IESO position that -$5 is reasonable given the operational impacts of maneuvering the units and the wear and tear on Condenser Steam Discharge Valves.  
It is unnecessary, and unhelpful, for the overseers of Ontario's collapsed market pricing to have opinions on the engineering at nuclear generating stations.

Market solutions for curtailment could be found (see C.D. Howe paper) - if the IESO were interested in pursuing market-based solutions (they aren't - see their response to C.D. Howe paper).

The consideration of the OPA negotiating contracts refers to the IESO's expectation that the IESO will retroactively agree to pay renewable suppliers for curtailed generation. Their hope must be that ratepayers be robbed of $1 billion, annually, so as they don't create any waves in running a market like a market (meaning the highest cost supply is the first curtailed).


Renewable power targets at risk, Samsung consultant warns:  This Toronto Star article does not note the "Samsung consultant" wrote many of the contracts held by entities such as Samsung while working for the government's OPA - and in fact likely knows full well they should be curtailed, and not be paid, when the system cannot accept their output.

Billions at Stake In Feed-In Tariff Contract Fine Print: My forecast of what is at stake ... a forecast that has not been disputed and that may have helped to delay a nonsensical continuation of the feed-in tariff program (no contracts have been offered in 2012 aside from the smaller solar projects that purchase the maximum number of votes for each dollar confiscated from ratepayers).

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