The
media has recently been focussing on higher electricity
rates in Ontario, supposedly as a result of implementing
green energy. This fear-mongering has been furthered by
the political agenda of some political parties for the purpose
of simply getting elected. Let’s look at a few facts.
First, we know that past and current electricity rates
have been subsidized through taxes, so the real
cost is not known to the average person. In addition
to the unrealized costs listed in the
first part of this series, are the costs of new nuclear
builds and refurbishing. In June 2006, the Ontario energy
minister announced $46 billion for re-builds.
The estimated cost to refurbish Bruce Nuclear was $2.4 billion
(for 2009 completion), and now stands at $5.9 billion,
with an estimated 2012 completion date. The average over-run
cost for nuclear projects is 150% of the estimated
cost. There is also talk about a possible $25 billion storage
facility for nuclear waste, with an annual operating cost
of $500 million. Then there’s the possible cost of
a nuclear accident. In 2008, the federal government contributed
$1.38 billion to the oil and gas industries.
Now let’s look at what happening with green energy.
The electrical power grid is outdated and not capable of
handling large sources of energy from new technologies.
It is basically set up for a few continuous power sources
such as hydroelectric and nuclear. A prime example
is the power outage that crippled Ontario a few years ago.
The blackout of 2003 was caused by a problem in Ohio since
there were no mechanisms in place to protect the
Ontario power grid. This is one of the reasons
why utilities and politicians want to have nuclear instead
of green energy: it's easy and they don’t have to
do anything. It is true that adding green energy will create
the need for improvements and upgrades to the grid, but
so will the increased demand as a result
of our insatiable appetite for electricity and the lack
of focus on conservation.
A recent article published in The Globe & Mail,
titled Ontario
energy regulator blamed for jump in hydro bills (Friday,
September 24, 2010) written by Karen Howlett, outlines how
the Ontario Energy Board (OEB) is now allowing Ontario Power
Generation (OPG), Hydro One, and Toronto Hydro to bill
consumers 100% of upfront costs for future building
of projects, and also allows for utilities to make a return
on equity of 9.85% for this year, while doing so. Costs
used to be spread out over a number of years after a project
or upgrade was completed; however, with this new plan, these
costs will show up immediately on the consumer’s utility
bill.
So before bashing green energy and spreading fear of higher
electricity prices, we need to realize that we are
already paying huge amounts of money for these
other sources of electricity because we are not using green
energy.
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