This week the minority Liberals got hammered for not conserving enough electricity and for paying too much to make more of it.
Rookie Ontario Energy Minister Chris Bentley is probably he wishing he hadn’t picked up when Premier Dalton McGuinty called to offer him the job back in October. This week both the Ontario auditor-general and the environmental commissioner scolded the Liberal government for their mediocre performance in keeping Ontario clean, lit, and solvent.
In volume two of his 2010 Energy Conservation Progress Report, released yesterday, Environmental Commissioner Gord Miller takes the Grits to task for not delivering as promised on conservation efforts. Miller notes that Ontario has only achieved 65 per cent of its 2010 energy-conservation target, although he softens the blow by observing that the goals were awfully ambitious in the first place. Peak demand was reduced by 1,750 megawatts in 2010 (versus a goal of 2,700 megawatts) for an estimated saving to Joe and Jane Ratepayer of $3.8 billion on an investment of $1.7 billion.
The government won’t even meet targets for its own facilities, where it had committed to a 20 per cent reduction in energy use from 2003 levels by 2012. With 2012 looming, the report estimates the real reduction will be about 15 per cent (barring a possible apocalypse, in which case usage is expected to spike briefly before stopping altogether).
Smart meters, which allow for “time-of-use” pricing, were a target of Conservative bile during the election campaign when they conjured mental images of impoverished families forced to choose between doing their laundry at 3 in the morning or eating cat food. The good news is that the meters are being installed as planned; however, since the analysis of data on their use is only beginning, it’s not known what, if any, impact they’re having on the way we consume electricity. As a result, the time-of-use pricing model is based on guesswork and can’t yet be optimized to maximize conservation.
So, overall, Gord Miller tells us that Ontario isn’t meeting all its targets, but we’re getting there—we probably don’t deserve a gold star but certainly we could get a smiley face or a kitten sticker for our work.
More damning and correspondingly more useful to the political aims of the opposition is Auditor-General Jim McCarter’s assessment of the government’s energy policies and in particular its showcase Green Energy program.
The good news is that we’re on track to get 10,700 megawatts of renewable electricity online by 2018, as promised; the bad news is that the cost to you, me, and the lady doing her laundry at 3 a.m. was slightly underestimated. “In May 2009, when the Green Energy and Green Economy Act (Act) was passed, the Ministry said the Act would lead to modest incremental increases in electricity bills of about 1% annually—in November 2010, the Ministry forecast that a typical residential electricity bill would rise about 7.9% annually over the next five years, with 56% of the increase due to investments in renewable energy.”
The increased cost for juice-use seems to have been at least partially avoidable. The report notes that prices paid to renewable-energy producers under the Feed-In-Tariff program are notably higher than under the earlier and already successful Renewable Energy Standard Offer Program program, and the difference could set us back $4.4 billion more over 20 years. Other examples of what the McCarter deems unnecessarily high payments are expected to cost another $2–$3 billion over the same period.
Equally politically sensitive is the deal with a Korean consortium to build green-energy projects in Ontario. The group will invest $7 billion and in return will get not only higher-than-market-rate FIT prices for delivering electricity but bonuses of hundreds of millions if job creation targets are met. While it’s admirable to reduce dependency on fossil fuels, the auditor-general says that he can’t be sure if the deal is a good one—and neither can anyone else, because no analysis or business case was done.
To add insult to injury, the report notes that “Renewable energy sources such as wind and solar provide intermittent energy and require backup power from coal- or gas-fired generators to maintain a steady, reliable output.” In other words, renewable energy is available when the wind blows and the sun shines, not when we need it. Which is pretty obvious when you think about it.
Progressive Conservative leader Tim Hudak responded with gratification at being vindicated in some measure on his campaign claims about Liberal waste, and barely concealed resentment that the report didn’t come out before the election when it could have done him some good. He also accused the premier of “giving the finger” to the auditor by celebrating the release of the report with a trip to a wind-turbine plant in Windsor (Hudak withdrew the remark after a request by the Speaker).
The report should serve as a wake-up call to the Liberals, who got so excited about greentech that they didn’t plan properly or even listen to their own advisors, possibly costing us a few billion. It’s not enough just to do what looks like the right thing—you also have to do it the right way. Time to start doing your homework, Mr. McGuinty.