Electricity prices should level off, IESO rep says
By Chad Ingram
Published Oct. 20, 2016
The cost of electricity for Ontarians should level off in coming years, says a representative from the province's Independent Electricity System Operator (IESO).
Chuck Farmer, director of stakeholder relations and public affairs for the IESO, visited Minden Hills councillors during their Oct. 13 committee-of-the-whole meeting.
While consumer electricity prices in Ontario have about doubled in the past decade, according to Farmer, this has been due to the increasing cost to the province of producing electricity.
Between 2006 and 2015, he said the total cost of electricity service in Ontario grew from $15.5 billion to $20.5 billion.
“Most of that increase is the result of building generation infrastructure,” Farmer said. He said the elimination of coal-fired power plants, which the provincial government completed in 2014, contributed to the need for the construction of more power generation infrastructure.
“We do expect the cost increases to moderate,” Farmer said, indicating this should be the case during the next 20 or so years. “We're expecting costs to be relatively flat, adjusted for inflation.”
Reeve Brent Devolin pointed to the province's recent announcement it would cancel some $3.8 billion worth of renewable energy projects in order to save Ontarians an average of $2.45 off their monthly electricity bills.
“Is cancellation saying, in terms of capacity . . . we have what we need to meet capacity?” asked Devolin, who sits on the Parry Sound/Muskoka advisory committee to the IESO.
“That doesn't mean there won't be a need to do more renewable energy,” Farmer said, adding that the province should have adequate capacity for at least the next six to eight years.
Councillor Pam Sayne told Farmer she was concerned the province's feed-in tariff (FIT) program seemed to benefit certain companies.
She asked Farmer if the IESO was tracking the number of Ontarians who are choosing to get off the grid all together, powering their own homes with self-sufficient setups.
“I wonder if that's something that's being measured by the IESO, people who want off the grid completely,” Sayne said. “We have people who are weighing between paying their electricity bills and heating, and winter's coming up again.”
Farmer said the IESO is conducting micro-grid pilot projects with a number of municipalities.
“As far as grid defection itself, we see this trend coming,” he said. “This is a very significant issue for the province to deal with.”
Chief administrative officer Lorrie Blanchard wanted to know what happened to the infrastructure of FIT projects when their life spans were up. Contracts are typically for 20-year periods.
“Is the IESO considering what might be done with this equipment at the end of the day?” Blanchard asked.
“Generally, all generation contracts put a requirement on the owner of the facility to decommission,” Farmer said. “So everybody is accountable for what they do. At the end of 20 years, they may still be a useful facility, it just doesn't have a contract.”
Devolin, who's said repeatedly that municipalities should reap some benefit of FIT projects within their borders, said it would be unfair for the facilitation of that decommissioning process to fall to townships.
“The benefits do not accrue to us, so the costs should not accrue to us,” he said.