Ontario energy week: rural poverty and OEB ignorance

"The public policy objective of the Cap and Trade Program is to reduce GHG emissions"

I try to keep these posts dispassionate summaries of recent articles that interested me, but with requisite editorializing to connect the articles.

Let me start this post with what a statement that may be be more subjective than objective - and then I'll connect news and the reader can decide:

Rosemarie LeClair should be terminated, with cause, from employment at the Ontario Energy Board.

An example of the damage done by many entities, including the OEB, came this week from the United Way of Bruce Grey:

July 1 2015 – June 30 2016 Close to ¾ of a million dollars was spent by area social service agencies and charities helping people stay connected to their utilities as well as providing heat in the past 12 months. For the 2015-2016 winter (July 1-June 30) the United Way has gathered data from social services agencies and other charities who have provided support to people experiencing energy poverty...

The report notes monthly "delivery" charges associated with baseboard heating are $66/month.
The report also notes the impact of the global adjustment, without noting pricing has been so complex the system operator can't provide a coherent answer on the average rate they pay to generators. If they noted their third listed contributor to high costs in rural Ontario, conservation, would make more sense - if the IESO understood what was driving costs, and the "I" belonged in their name, they wouldn't be spending so much on conservation.

Killing Nuclear, ignoring emissions and avoiding carbon pricing

In Germany, where renewables have mostly replaced nuclear power, carbon emissions are rising, even as Germans pay the most expensive electricity rates in Europe. In South Australia, the all-wind strategy is taking its toll. And in California, the costs of renewables are also apparent. - Eduardo Porter - New York Times

Recently a multitude of exceptional articles have been written on the challenges facing nuclear power plants in the United States, mostly without mentioning an alternative to competing subsidies.

• A $30/tonne CO2 equivalent price would equate to adding $12-$15 per megawatt-hour on the most efficient natural gas-fired generators. $30 is a familiar figure thrown about in Canada.
• The United States Government's Interagency Working Group on Social Cost of Carbon has a complex methodology of working out values: using a 4% discount rate they provide a 2016 value of $38/metric ton CO2, but that's in 2007 dollars - it's about $44/t CO2e in 2016 dollars, putting the social cost  per megawatt-hour of natural gas-fired generation at $17.5-$22.5/megawatt hour.

now... to the news

A very educational read is Will Boisvert's Renewables Subsidies Are Killing Nuclear and Threatening Climate Progress, Bloomberg New Energy Finance Study Shows:

Why are nuclear plants going broke? The immediate reason is cheap gas. The plunge in natural gas prices caused a collapse in the price of natural gas-fueled electricity, which has slumped below the production costs of nuclear plants. Bloomberg predicts that in the sprawling PJM grid wholesale prices will be $28.50 per megawatt-hour in 2017, lower than average nuclear production costs of $35.50 per megawatt-hour. Facing losses like that, nuclear utilities are closing up shop.
But the impact of market forces has been worsened by public policy that neglects nuclear power and adds to the pressure it faces. Federal, state and local governments have massively intervened in energy markets to support renewable power with subsidies and mandates, but given virtually no support to existing nuclear plants. These biases tilt the playing field for commercial competitors of nuclear plants.
The $23 per megawatt-hour federal Production Tax Credit for wind farms, for example, can be larger than the total wholesale price nuclear plants get for their power in some regions, according to Bloomberg data. (It’s also larger than the $5-15 per megawatt-hour subsidies Bloomberg reckons nuclear plants need to break even.)

I'll read most anything by Will Boisvert -in English- but I don't see a link to the Bloomberg New Energy Finance Study (nor could I locate it), and there's no mention of carbon pricing.

New York bringing hope back to US nuclear operator

New York state is acting to keep existing nuclear generators operational in an important power play that's interesting for a number of reasons.

July 8th (Friday afternoon, as policy announced) NY regulators propose generous Upstate nuclear subsidies | Syracuse.com

SYRACUSE, N.Y. – State utility regulators today released a proposal to subsidize Upstate nuclear plants with annual payments totaling an estimated $482 million a year.
The proposal from the Public Service Commission staff seems likely to please nuclear plant operators, who say their facilities deserve subsidies for providing carbon-free power, and to infuriate anti-nuclear advocates who want more resources devoted to wind and solar.

The public has a brief opportunity to comment -- until July 18 – an indication that the PSC is likely to rule on the proposal at its Aug. 1 meeting.
Exelon Corp., which owns three of the four Upstate nuclear reactors, recently told the commission that the oldest two facilities might close unless subsidies were approved by September.

Exelon had said similar things about a proposal put to the Illinois legislature to incent existing nuclear units there by guaranteeing a $42/MWh rate for the generators. Illinois' legislature didn't act, and Exelon announced the closure of Illinois units.

The initial Syracuse.com story embedded Public Service Commission staff's recommendation - knows at POLITICO as Cuomo's nuclear subsidy plan. From the recommendation:

Replacement of the zero-emission attributes with equivalent amounts of fossil-fueled attributes would result in an increase of approximately 31 million metric tons of CO2 emitted into the atmosphere over the next two years, according to a report issued by The Brattle Group.
...
Staff is proposing to subsidize zero-emissions attributes from Zero Carbon Electric Generating Facilities when there is a public necessity to encourage their preservation. Payments for zero-emissions attributes would be based upon the U.S. Interagency Working Group’s (USIWG) projected social cost of carbon (SCC). This approach is consistent with the Commission’s approach in setting guidelines for Benefit-Cost Analysis. 

This may be the first payment scheme designed to price energy by the social cost of carbon. The formula is:

RGGI is the Regional Greenhouse Gas Initiative - so if it was trading carbon at what the USIWG considers the social cost of carbon the ZEC would be zero. If the combination of the RGGI credit costs, expected market pricing and capacity payments (in the "rest of state", or ROS zone) was equal to, or greater than, the USIWG's social cost of carbon, the price would be zero.