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How to Prevent Electrical Blackouts and Budgetary Red Ink

The solution to Ontario’s electric power supply crisis is right in front of the Ontario and Federal governments’ noses, but they’re so blinded by ideological bias they don’t recognize that it’s there.

Capping Ontario’s kilowatt hour rates may have seemed like a good idea to Ontario Premier Ernie Eves while he was trying to clean up the mess his predecessor made in privatizing Ontario Hydro, but the consequences have been disastrous for a government committed to reducing public debt and to fast-tracking private sector solutions to public problems. Privatizing a market that has a long history as a public monopoly and by definition has to be highly regulated has had about the same chance of succeeding as inviting African lions to a salad buffet. Capping rates amounted to removing all the lettuce.

A large part of Ontario’s problem, aside from the long-range environmental implications of using non-renewable fuels to generate electricity, is that peak period consumption occurs during the afternoon hours in summer, when nearly every other producer on the North East Power Grid is also short on generating capacity.

That peak period happens to be precisely when solar energy levels, which also happen to be completely untapped, are highest. The solution lies in the recent legalization of net metering, which allows microscale power generating systems into the grid as producers.

An office building partially clad in solar panels may not turn the building’s owners into net generators of electric power, but it will cut its consumption, particularly during the daylight hours when the weather is hot. Small scale residential solar systems have the same potential.

The main stumbling block, of course, is that microsystems are expensive, few businesses or private individuals have the necessary capital to invest, and even fewer have enough information about small-scale generation to take it seriously. Until net metering arrived, only a few motivated entrepreneurs (like the one in Toronto’s Beaches area who uses solar panels to heat water for his laundromat) along with some ecologically-obsessed survivalists had the motivation or the expertise to install the systems. Until the grid went down, no one had an urgent incentive.

No government today wants to embark on the kind of retrofit programs we saw in the 1970s, even though these programs were successful. Governments don’t want to because, in spite of past successes, the programs were costly, bureaucratic, and prone to swindles by the unscrupulous. Luckily, in the present situation things don’t have to work like they did, and a model for making programs financially palatable already exists in California, which faced a similar situation several years ago and found ways to cut peak demand by almost 23 percent. Among the successful measures used there was a 20 percent rebate to customers who cut their electricity use by 20 percent.

Ontario could achieve similar results by instituting two simple programs. One would promote net metering, and make installation free of charge to anyone willing to shell out the cash to install a microsystem able to seriously cut peak period consumption. The other program would mirror California’s 20 percent rebate to customers willing to cut consumption by 20 percent. This would permit businesses and families to finance the systems on their own and become peak period producers of electricity instead of consumers. And if the Federal and Provincial governments were really serious about supporting entrepreneurial activity and job creation, they’d also supply startup capital so the net metering and small-scale generating technology could be built in Ontario—something that would be necessary to create the industrial critical mass to make the installation and maintenance sub-industries efficient and viable.

If governments are looking for a way to make the Kyoto Protocol work in Canada, and I’m still not convinced any of them are, net metering could save the environment and stimulate the economy. In other words, it’s a political goldmine that has yet to be tapped. Right now, you can’t find anyone in Ontario able to sell you a system who doesn’t also want to sell you squash pie and a lot of messy storage batteries while they talk you into joining their back-to-the-land commune. But it doesn’t need to be that way.

Policing the changed system would be easy and simple: a programming change in the hydro sellers’ billing system will do most of it. In practical terms the logical benchmark billing point would be 2002’s hot summer. To obtain and stay on the rebate system, users would have to stay below 80 percent of that summer’s consumption.

The beauty of all this is that the small scale systems—commercial or residential—will be the most productive precisely when they’re needed: during hot summers, and during the daylight hours. If enough are built and installed, they could save Ontario the need to build another costly megaproject, or (more likely) a dozen hyper-costly gas-fired peak generators. They’d also head off the ultra-costly peak hour buys that are currently inflating the public debt. If the recent blackout teaches us anything, it ought to be that the US system clearly isn’t reliable enough to save us, and shouldn’t be used as a model for rejigging ours.

Ontario’s artificially-capped power rates, due to run out in a couple of years, are merely an expedient transfer of costs from one public budget to another, less-scrutinized one. We’re all paying the cost of subsidizing rates, and no one in their right mind thinks those costs aren’t going to rise. When the subsidy ends, the necessity of cutting consumption is likely to be extremely painful, in both political and personal terms, as we all just found out, if only for a week.

The technology for small scale generation and net metering exists. What doesn’t exist is the political will and the leadership to make it happen. Ontario needs someone who can get things done to pull this together—a lateral thinker with a head for business. Someone like, say, Dennis Mills. The alternatives are ugly and irresponsible, and will be much more expensive in the long term: gas and oil-fired generators, wildly inflated electricity bills, and more blackouts.

August 29th, 2003 1014 words

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Brian Fawcett

Brian Fawcett

Brian Fawcett is a Toronto-based writer.

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