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