Monday, January 20, 2014

December 2013: Ontario "donates" $120 million in power

Even kids would know this is a crazy business model

Ontario’s electricity ratepayers “donate” another $120 million to their neighbours

December 2013 was yet another month of generosity for Ontario’s 4.8 million ratepayers.   The Independent Electricity System Operator (IESO) just posted the December 2013 Monthly Market Report which demonstrated once again how nice we are in Ontario, subsidizing electricity exports to NewYork, Michigan and Quebec. This was also the month in which as many as 500,000 Ontario hydro customers were without power.

In fact, during December Ontario exported an average of 2,296 megawatts (MW) every hour; for 31 days that would represent almost 1.7 million MW hours (31 days X 24 hours X 2,296) or enough to power approximately 180,000 Ontario homes.    The power Ontario sold was at an average of $30.12 per MWh so it generated almost $53 million in revenue. 

While that sounds impressive on the surface and is a large enough number that our Energy Minister would refer to it as a “profit,” he would be stretching the truth.  The same Monthly Market Report indicates that each and every MW that Ontario produced in December cost ratepayers $102.70. What this means is, the production costs that will hit ratepayers’ electricity bills at the next price adjustment will reflect the cost of the sale of the almost 1.7 million MW hours was about $173 million. 

In other words, Ontario's ratepayers forked out $173 million in order to receive $53 million—the cost was $120 million for the month.  That subsidy represents approximately $27.00 for each household or as Minister Chiarelli would say, about 15 “Tim Horton's coffees.”

Quite the Christmas gift!

Parker Gallant©
January 20, 2014  
The views expressed here are those of the author and do not necessarily represent Wind Concerns Ontario policy.


  1. The numbers are quite striking. If exports continued at this rate for a year, it would mean a loss on export sales (i.e. a subsidy from Ontario ratepayers to American ratepayers) of $1.440 billion. Of course, it will not continue at that rate, but the cost per kilowatt hour exported will probably increase as the province continues its crazy contracting of expensive wind and solar generation. It may continue to cost ratepayers something in the range of $800 million to $1 billion per year. At that rate, we could buy Tim Horton's the company!

  2. Typically the focus is NOT on improved environments but on profits for wasted efforts. That's what the stupid Dragon's is all about. The rest is pure Partisan politics. Thanks Parker for your efforts.
    Retired Environmental Science Professor of 42 years.
    Ted Spicer.

  3. Buy Tim's - that's a great idea or even better The Leafs - I know they don't win but man do they bring in the cash from all the suckers.

  4. Another project posted yesterday...