Monday, April 27, 2015

Selling Hydro One and rate hike threats for Ontario

The government of Ontario recently announced it would try to sell off it's public transmission company, Hydro One. The rumours became fact as a Premier’s Advisory Council on Government Assets released its final report on this topic, which was quickly accepted verbally and is formally now recognized in the Ontario's 2015 Budget.

One of the concerns with the government's plans to sell off part of Hydro One is the impact on rates. I tend to think the pressure on rates will be slightly up, only initially, for Hydro One distribution customers, but actually downward for customers of Ontario's other local distribution companies. That will require some work to explain in a separate post, but I'll note the existing cost concerns with a list as I had been collecting stories on rate impacts prior to the announced plan to sell of 60% of the transmission and distribution assets:

Rates in Ontario are going up, and up.

Onto the debt.

Sunday, April 26, 2015

Ecomodermism: One new manifesto, one less blog

Earlier this month I read "A Farewell Post" from Keith Kloor regarding his Collide-a-Scape blog. Kloor and Brad Plumer are two writers that I enjoy because they feed biggish concepts succinctly but in a way that is digestible. Events the same week made this section of the farewell post notable:
...there are some ideas (or at least a term–eco-modernism) that germinated at my blog which I elaborated on elsewhere at Discover and atSlate several years ago, and which seems to have now been picked up on.
It's notable because the same week that was written a collective released An Ecomodernist Manifesto.

Reportedly Frank Lloyd Wright's Manifesto for his apprentices
Just by the gravitas of words, manifesto seems the opposite of blog;
The Communist Manifesto was the only other manifesto that came to mind upon seeing this one. Through googling I found many; Lulemon's is currently one of the more popular ones.

I'm inclined to support the Manifesto as it's signed by many people I've read or listened to: Barry Brook (who has written on it at his Brave New Climate blog), Stewart Brand, David Keith, Ted Nordhaus, Roger Pielke, Jr., Michael Shellenberger, and Robert Stone - as well as people I should get better acquainted with including Rachel Pritzker, Joyashree Roy, Christopher Foreman, Ruth Defries and John Asafu-Adjaye. Additionally, I'm "eco", having added a lot of insulation to my home and planted dozens and dozens of trees,and I exist right now, which is surely modern. Ecomodernism sounds like it might be me.

An Ecomodernist Manifesto is quite readable. I'll boil it down to 3 points:
  • people will continue to move to cities
  • affluence requires power and sustainable affluence require power that is "cheap, clean, dense, and abundant"
  • biodiversity, and related wild nature, are desirable and worthy of encouraging

Saturday, April 25, 2015

OEB panel notes gaming opportunities for traders and growing data deficiencies

The Market Surveillance Panel (the Panel) of the Ontario Energy Board (OEB) recently issued it's report for the period from November 2013 to April 2014. Having ripped into the the Panel for what I saw as poor and petty portions of its previous report, I thought I should comment on this one as it is a return to higher quality.

Perhaps the most important section of the new report notes the data deficiencies clouding all analysis on Ontario's electricity sector.
Market Surveillance Panel: April 2015 Monitoring Report on the IESO-Administered Electricity Markets for the period from November 2013 – April 2014
3.1 Data on Embedded Generation, Embedded Consumption, and Behind-the-Meter GenerationSeveral shifts in the electricity industry in Ontario have highlighted to the Panel that data in certain important categories is not readily available. The lack of data has made tracking changes to certain aspects of the market—and assessing outcomes in the market—more difficult. The Panel has identified three main categories of unavailable data that affect the accuracy of metrics that are important to understand several aspects of the industry. These categories are embedded generation, Embedded Class A consumption, and behind-the-meter generation. 

Friday, April 24, 2015

Negotiations slow on Bruce Power contracts: issues with Ontario's nuclear refurbishment scheduling

Shawn McCarthy wrote a column on slow-moving negotiations regarding the refurbishment of Ontario's nuclear reactors, primarily those operated by Bruce Power. In the week since it was written it inspired 0 comments - and here I am expanding on the topic!

Ontario news these days is on the sale of Hydro One and budgets and cap-and-trade, all of which I'll likely get to at some point, but most of those stories are simply about sleight of hand to hide debt, and grabbing funding for a favoured constituency from unfavoured ones.

The operation of Ontario's nuclear reactors is, in contrast, not simply a flavour-of-the-day story.

Negotiations delay TransCanada’s Bruce Power nuclear reactor updates | Globe and Mail
Bruce Power and the Ontario government are mired in negotiations for a $15-billion deal to refurbish six nuclear reactors, delaying the planned project past a self-imposed deadline and posing new questions about the province’s future energy mix.
The Liberal government insists it remains committed to refurbishing Ontario’s aging nuclear fleet. However, both sides have signalled they are concerned about potential cost over-runs, and Bruce and its shareholders worry about the province’s schedule, which would require the company to take units off-line before the end of their commercial life.
"TransCanada also wants to squeeze as much cash from the existing reactors as possible before having to invest in upgrading them" is the easy way to keep the article newspaper length, but a closer look might point the interest to OPG's Darlington, and question if they operate their reactors to maximize value as Bruce Power does.

Wednesday, April 8, 2015

Ontario Energy Board boldly moves to fixed distribution charges

“allocating common costs is like trying to find a black cat in a dark room. [pause] Where there is no cat.”
The Ontario Energy Board (OEB) released, on April 2nd, A New Distribution Rate Design for Residential Electricity Customers (.pdf), along with many documents from the period leading to the publication of the new Board policy.

It's notable beyond Ontario's borders as many jurisdictions are also attempting to cope with changing revenues and similarly looking to change pricing models.

From the OEB:
On April 2, 2015, the Ontario Energy Board (OEB) issued a new rate design policy that will change the way local distributors bill their residential customers. Distribution charges, currently a blend of fixed and variable (per kilowatt-hour) rates will be an entirely fixed monthly service charge by 2019. Fair billing, grid innovation and enabling customer uptake of new technologies are among the OEB’s objectives for this change. 
I agree with the change, although not without concerns  - some of which I noted when writing on the initial discussion document. I'll have more to say on the policy document on my Cold Air blog - because the OEB's documents are poor, which is almost certainly requisite for any document produced in Ontario's ridiculous electricity policy environment.

I'll try to keep my comments, and citations, in this short post relevant to a broader audience.

Utilities in many jurisdictions, including Ontario, are dealing with a need to maintain infrastructure while demand levels are dropping, and the problems are particularly acute where solar panels are being rapidly installed within distribution networks (often net metering jurisdictions).

Friday, April 3, 2015

Hydrogen's promise - and avoiding common mistakes about energy

Today, some information on hydrogen and the promise it has to power the future.

But first, the consistently lucid Brad Plumer has a post that leads into the space hydrogen promises to, at least partially, fill.

The most common mistake that news stories make about energy - Vox: "
Repeat it over and over: "electricity" is not the exact same thing as "energy."
Last week, I wrote about a nifty milestone in Costa Rica — the country had gone 75 days without using any fossil fuels to generate electricity. It was intriguing news, and lots of other outlets also covered it.
Except a number of stories featured headlines that were quite wrong, saying that Costa Rica was now running completely on renewable energy:
That's not true, and this subtle error pops up a lot in energy coverage. "Electricity" and "energy" aren't perfectly interchangeable.
Yes, Costa Rica's power plants were all running on renewables (mostly hydro) and delivering clean electricity through transmission lines. But the country still had plenty of cars running on old-fashioned gasoline. There were still airline flights in and out of Costa Rica powered by jet fuel. The country has two large cement plants that were still burning coal in their kilns. It simply wasn't true that, as one outlet put it, Costa Rica had "eschewed fossil fuels completely."
I suggest people read this entire article, and Plumer's other work.

image from Student's Guide to Alternative Fuels
I received an e-mail noting work posted to the site of the "Auto Insurance Centre." I'm not sure I would have opened the link if it had not cited a work of mine that I enjoyed compiling/writing (Exporting more U.S. Coal can lower global emissions?)
I'm glad I did, as it summarizes a number of alternatives for powering transportation; I was particularly interested in the section on hydrogen.

Students Guide to Alternative Fuels