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Parsing Ontario’s Electricity Supply Nightmare

The Ontario Conservatives’ pre-election freeze on Ontario consumer electrical rates just prior to the last Provincial election was a characteristic neo-conservative response to the sort of problems ideologically-driven government tends to create for itself. In this case, it was rising electrical rates caused by the botched sell-off of Ontario Hydro. The panicking Conservatives froze consumer rates at 4.7 cents per kilowatt hour, which means that if you leave a 100 watt bulb on for 10 hours, it costs you about a nickel. That doesn’t sound like much, but most of us use an awful lot of 100 watt bulbs and their equivalents. But the salient fact here was that they froze the rate well below what it was costing the utility to generate—or buy—power, and that what they were doing, in a politically egregious if familiar way, was bribing citizens with their own money.

The main benefit, touted to accrue to the poor or those on fixed incomes, actually went to power-sucking corporate industries, which got a whopping business subsidy paid out of general tax revenues. That’s cynical enough in itself, but what really spelled out the bankruptcy of the circling-the-drain Common Sense Revolution was that beyond the rate cap the Conservatives had no workable way of correcting the situation and were in fact removing the one tool in their toolbox with the rate cap. The political calculation Ernie Eves made likely went something like this: I’ll use the freeze to win the election and then stick the cost of the subsidy to everyone in further cuts to social services and education.

Cutting social services and education was what the Conservatives were most fond of doing even though it had become clear that it had become political suicide. The official plan after the August 2003 blackout to increase electrical supply—if you could call it a plan—was simply to continue wanking the ideological notion that the private sector is the source of all possible solutions.

Well, the private sector hadn’t exactly rushed forward to gain access to the power generation market when unrestricted deregulation was announced, and it treated after-rate-cap invitations to generate power with equal reticence. For this piece of cynical confusion alone the Conservatives deserved to be turfed out of office.

Now that Dalton McGuinty’s Liberals are running Ontario, things should have changed, right?

McGuinty, who’s in serious danger of having his name changed to “Daulton McGuilty”, has dumped the rate cap, sort of. But what he’s replaced it with is an almost-as-cynical graduated rate that will, among other things, penalize small business more than anyone. McGuinty is, in other words, still bribing Ontarians with their own money, and worse, he’s offering little more than the Conservatives did for long-term solutions. He’s going to refurbish the nuclear plants, and is offering not-very-enticing incentives to the one or two private sector wind generation consortiums that are lurking at the margins waiting for some really plush handouts before they make any moves.

In the meantime, McGuinty has several campaign promises (closing down the coal generators is the main one) to deal with, and a public prejudice against nuclear power generation to slither around that may involve trying to slither around common sense. That leaves him between a rock and a hard place, and the only generating technology open to him is to replace the coal plants with natural gas-burning plants—which isn’t a solution at all, except to tunnel-visioned oil industry environmentalists and other people who think that burning up clean-burning non-renewable resources instead of heavily-polluting non-renewable resources isn’t just smearing cosmetics on doomsday so we won’t see what’s coming.

Meanwhile, McGuinty wants everyone to conserve energy, which is sensible, but also depressingly unimaginative and Calvinist. It’s a little like responding to a crime wave by asking people to be nice. The nice people will do their best, but since they’re not the ones causing the crime wave in the first place, the request for niceness is just window dressing and ass-covering on the part of those responsible for dealing with the mobsters and the petty-thieves.

And anyway, weren’t the Liberals elected because they’re supposed to be smarter than the Conservatives, not merely less mean-spirited? How smart is it to be operating on the premise that “power consumption is bad, so let’s penalize heavy users, and maybe they’ll cut back”? This approach may be relatively fair for residential consumers, although families with members who have lung difficulties and therefore require air conditioning won’t think so. But it’s idiotically unfair to business, particularly to the small ones engaged in industrial production.

The new rate structure won’t distinguish between a small business that produces origami sculptures and one that, say, extrudes metal or plastic parts. The origami sculpture company’s activities—just in case you haven’t already figured out where I’m going with this—require about six 100 watt bulbs. The parts extruder—unavoidably—requires large, power-consuming machinery. The rate revamp reminds me of the worst sort of anti-industrial proposals of the left, which were partly responsible for the exodus of manufacturing from North America during the late 1970s and 1980s, a process that resulted in an onslaught of unregulated polluters setting up in countries where beating and starving workers before they’re ground up in poorly maintained machinery is still considered a rational practice and a legitimate road to big profits.

Some other things are wrong with McGuinty’s non-plan, and they may be more important. First, it doesn’t do a thing to promote the alternate sources of electricity we urgently need. Second, it doesn’t address the peak power capacity shortage, which is both more urgent and more easily solved than the overall capacity problem.

One of the reminders that Dalton McGuinty really isn’t much different than Ernie Eves is that he thinks inside the same profit-driven big business tunnel when it comes to “alternate sources of electricity”. He wants the corporations to come in, build big wind farms or natural gas-fired generators, and that’s as far as he can see. While these are all practical possibilities, he’d do well to remember that they’re unlikely to do it without guaranteed profits, and that formula will translate instantly into higher generation costs. I’m not sure why legislative solutions haven’t ever been looked into as a possible solution to the profligate history of public power generation, but since no one anywhere is willing to look that one in the eye, I won’t make an issue of it.

What’s a hell of a lot more important for him to remember is that none of the available large-scale technologies will offer a solution to the peak power demand/capacity gap, which in Ontario is seasonal and weather-specific. We consume the most electricity here during extremely hot, windless weather. Ordinary people crank up their air conditioners, and so do businesses. Refrigeration costs more under those conditions as well, and that ain’t going to change, particularly within the business sector.

None of McGuinty’s energy thinkers seem to have noticed that during periods where the weather is hot, humid, and still, wind turbines aren’t going to be turning, and that any dependence we develop on wind generated electricity is going to make our peak capacity problems worse than they are right now. What will help is solar generation, which generates power most effectively during, you guessed it, hot, sunny weather during the summer.

But there’s a problem with solar generation. It is limited in scale, unless you have vast tracts of desert lands you can take out of commission—which Ontario doesn’t really have. Solar generation is best suited for rooftops, or the upper stories of large buildings, where it could replace that flashy signature cladding that frankly does little more right now than display the egomania of the design architects, or make industry captains feel like their corporate dicks glow in the dark. Net metered solar systems, moderately but strategically scaled, can, as has been proven in California, lower commercial power consumption by up to 30 percent. Net metered small scale residential systems have accomplished similar reductions for individual households there. Arguably more important, such systems will also generate power most efficiently exactly when the power grid is most stressed in Ontario, and during the hours when McGuinty’s government currently has to buy power from the U.S. at astronomical cost.

Will this cost money? Yes, but nowhere near as much as rebuilding nuclear stations does, and likely not as much as creating an economic carrot attractive enough to lure the private sector into a regulated market. Will individuals and companies be willing to invest? They will if their peak power consumption costs start to reflect the actual costs more closely than they do now. I’d cheerfully borrow 10 grand to install a rooftop solar system, even without guarantees that it’ll kick back my investment directly. I’ve been looking—without success—for two years now to find a private company that knows how to do build them, because I understand that the governments we have aren’t willing to show us what the real cost of our peak power shortfall is.

I think a lot of other people feel the same way I do, and that McGuinty is underestimating both the general public’s common sense and its intelligence. That’s a sure road to political defeat in Ontario, as both the Eves Conservatives and the Bob Rae NDP found out.

If McGuinty could get his tongue out of the corporation’s asses, he’d see that there’s a solution right in front of him. But like Ernie Eves before him, he’s looking for a half-dozen solutions, not for the 15,000 solutions he needs. He also needs to wake up and recognize that the technology has arrived, and that the solution to his nightmare is simply to find ways to spread the solution around.

 

1645 w. February 14, 2005

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Brian Fawcett

Brian Fawcett

Brian Fawcett is a Toronto-based writer.

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