Uncertainty and Unknowns: Ontario's LTEP challenges assessed at APPrO 2016

By Sean Mallen

 

At a conference filled with all manner of learned power point presentations, one single slide may have most tellingly illustrated the outlook for energy planning in Ontario. 

 

It was a picture of a notice board jammed with a riot of overlapping papers—an image of chaos that drew knowing laughter from an roomful of energy professionals.  

 

It came from Robyn Gray of Sussex Strategies as she was speaking about the overlapping of the Long Term Energy Plan (LTEP), the Climate Change Action Plan (CCAP) and the new Cap and Trade regime in Ontario.   Gray admitted that it was a struggle to explain how they all came together. 

 

“I tried to find an answer for you, but I couldn’t,” she said.

 

“There’s a lack of coordination between CCAP and LTEP.   In my short life, I’ve never seen anything so huge that covers so many government departments,” said Gray. 

 

The theme of the APPrO 2016 conference was Challenge + Change, but it could have easily been Uncertainty + Unknowns.  

 

Climate change measures may well result in increasing electrification in Ontario, even as the cabinet of the Wynne government considers a 20-year plan for power, due to be rolled out in the next year. Meanwhile, the IESO is simultaneously seeking input on how best to renew the market. 

 

“I think of it as one big ball of uncertainty,” said Jason Chee-Aloy of Power Advisory LLP.  “I’m a baseball guy and I can’t tell which inning we’re in.”

 

Ontario’s new Environmental Commissioner, Dianne Saxe, was even blunter in her assessment.  “Our energy planning doesn’t make any sense in terms of our climate targets,” she said.  “There are calls for more electricity at a time when headlines say there’s a revolt against the price of electricity.”

 

Saxe believes the provincial government’s targets for carbon reduction are not nearly ambitious enough.  The electricity sector is a relatively small contributor to greenhouse gas emissions, much smaller than transportation or buildings. But she says there is not enough attention being paid to improving efficiency and conservation.  

 

In his speech to the conference, Energy Minister Glenn Thibeault encouraged everyone in the sector to take part in the consultations on the LTEP.  But some wonder about the openness of the process.  

 

Michael Reid, Assistant Deputy Minister in the Energy Ministry, faced a pointed question in a panel discussion on the LTEP.  How, he was asked, can it be transparent when the final document will be approved in cabinet, where all discussions are confidential? 

 

“We intend to have an open, transparent conversation about choices,” Reid responded.  And, like the minister, he urged everyone with an interest to submit comments. 

 

Nevertheless, APPrO President Dave Butters said there is a concern about transparency.  Long term energy planning is notoriously complex, even for the experts.  Now, the final decisions about Ontario’s energy future will be in the hands of politicians and bureaucrats and will be taken behind closed doors. 

 

“We have no idea what the discussion (in cabinet) will be,” he said. Butters noted the LTEP will be unveiled almost exactly one year before the Ontario election, in an atmosphere where ratepayers are angry over high electricity prices. 

 

“The temptation to make it a political document for the 2018 election will be powerful.” 

 

Speaking in a nearly empty room, after the 500+ conference participants had departed Butters reflected on the two days of discussions and came up with two words. 

 

“Uncertainty and politics dominated,” he said. “There’s a big question mark about where we’re going.” 

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The Politics of Energy - First blog from APPrO 2016

By Sean Mallen

 

 

The subject was energy, the theme was “Challenge + Change”, but the conversations throughout APPrO’s 2016 conference were dominated by the political earthquake in the United States.

 

Dan Dolan, President of the New England Power Generators Association, put it out early in the first panel discussion of the first day.  

 

“Not sure if you heard, but we had a little election,” he said wryly.  

 

The upset victory by Donald Trump in the presidential election meant that the White House would soon be occupied by a man who once tweeted that climate change was a fraud dreamed up by the Chinese.  

 

Dolan and other American speakers agreed, however, that Trump’s impact on climate change initiatives could be limited, given that most of them are being driven at the state level.  Dolan’s region, New England, is taking some of the most aggressive measures to cut carbon emissions. 

 

“It may be naïve to say, but the presidential results are not going to dramatically change what happens in the local markets,” he said. 

 

Similarly, he noted that opposition to new projects is almost invariably local, as are the political pressures.  Dolan said that many politicians observe their own version of NIMBY (not in my backyard), which is NIMTO— “not in my term of office”.  

 

The impact of political calculations also weighed heavily in discussions about Ontario’s energy future.  Just a week before the conference it was revealed that the Liberal government’s internal polling has shown that 94% of Ontarians want relief on their electricity bills.  The poll was done over the summer, and explains why the government announced a rebate on the provincial portion of the HST on power bills, and why it cancelled an array of green energy projects, saving approximately $3.2 billion. 

 

Ratepayer outrage over prices was clearly reflected in Energy Minister Glenn Thibeault’s keynote speech to the conference.  He repeatedly stressed the need to reduce costs.  The Liberal government is trailing badly in the polls, and energy is seen as a key reason for its unpopularity. 

 

“We are focused on delivering costs savings for consumers and businesses.  Keep this goal in mind,” said Thibeault. 

 

When Opposition Leader Patrick Brown spoke to the conference the following morning, he was ready with his retorts. 

 

“The energy file has been terribly mismanaged by the government,” he said, saying that Ontario has the highest industrial rates in all North America, even while the province has a large surplus of electricity.  

 

He pledged: “a PC government would do everything it could to de-politicize” energy planning.

 

The Ontario NDP was also represented at the APPrO Conference.   In a panel discussion on the politics of electricity, MPP Peter Tabuns slammed the Liberal government for what he sees as an over-reliance on nuclear and fossil fuel.

 

“Unless they put efficiency and conservation at the centre, they’re going to have trouble,” said Tabuns.  “This is going to be an extremely stormy file for anyone.”

 

Moderating the Tabuns panel was former Energy Minister Dwight Duncan, who drew spontaneous applause when he observed bluntly: “our parties have been bullshitting about energy for 30 years.”

 

“All of us face some responsibility”, he said for what he described as a failure to deal with the central problems of energy planning.  

 

But Duncan is no longer running for office.  Those who are still in the Ontario political arena face an election in a year and a half and panellists in the politics session agreed that electricity pricing looms as the number one issue—which causes concern in the industry.

 

“I don’t think either the electricity sector or the government have done a good job explaining why prices are where they are,” said APPrO President Dave Butters.  

 

“We should all be concerned about that.”

 

Butters has seen past Ontario governments lurch into questionable action when faced with consumer outrage.  In 2002, former PC Premier Ernie Eves froze prices at artificially low levels, a measure that drew much criticism. 

 

“I’ve been around long enough to know when electricity prices are a political issue, governments react.  And not always in a helpful way.”

 

Speakers predicted that the 2018 Ontario campaign would shed more heat than light on energy.

 

Mike Van Soelen, a former political advisor who is now a consultant at Navigator Limited, predicted that the two opposition parties “will develop policies but equally are hoping that they don’t have to speak about it much.”

 

Van Soelen believes that the PCs and New Democrats will focus on criticism of the Liberal government’s record, hoping to capitalize on voter fatigue with a party that has held power since 2003. 

 

“They have to just be ‘the other guys’ and not say anything stupid or ridiculous.”

 

It is an old axiom of political campaigns:  they are more often lost than won.  

 

 

Ontario’s Power Producers Comment on Plan to Lower Electricity Prices

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Ontario’s Power Producers Comment on Plan to Lower Electricity Prices

 

 

TORONTO, March 2, 2017:

 

Ontario's power producers commented on the announcement today by Premier Kathleen Wynne that the government would be acting shortly to lower electricity bills for residential consumers.

 

“We are pleased that today’s announcement preserves the integrity of Ontario’s electricity market and acknowledges that the investments Ontario has made in generation can continue to provide good value to the electricity system well into the future”, said APPrO president & CEO David Butters.

 

APPrO members will continue to work with the Government and the Independent Electricity System Operator (IESO) as well as other agencies to ensure that Ontario’s power supply needs are met at the best cost, today and in the future.

 

APPrO is a non-profit organization representing more than 20 independent power producers in Ontario, and over 100 suppliers of services, equipment and consulting services. APPrO members produce power from co-generation, hydro, gas, nuclear, wind energy, waste wood, solar and other sources. APPrO’s members currently produce about 50% of the electricity made in Ontario.

 

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For further information contact:

 

David Butters, President & CEO

Association of Power Producers of Ontario (APPrO)

(416) 322-6549, ext. 231

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

 

 

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