Electricity rates and politics: how to pay for new nuclear plants

I spend a lot of time on this blog complaining about the high prices of Ontario’s allegedly “green” electricity sources—wind and solar, and their rarely mentioned but omnipresent sugar-daddy, natural gas. In case readers think I am unaware of the political risk the government has taken in its commitment to “green” energy, I am more than aware. That is a big part of why I am so strongly against the “green” sources. They are an obvious waste of money, and obviously little more than a public relations ploy to mask the fact that we have deliberately chosen a very expensive route to marginal emission reductions. I worry that if and when Ontario gets around to taking the only legitimate giant step to that goal, i.e. when we start to build new nuclear reactors as per the Long Term Energy Plan, the “green” fiasco will have so poisoned rate-payers against any rate increases that progress will be impossible.

On the other hand, I have faith in my fellow Ontarians. I believe that when the day comes that the province takes that serious giant step—by beginning to build the new reactors slated to go into the Darlington site—rate-payers will have differentiated between legitimate and phony ways of greening our power supply, and realized that nuclear energy is their friend and the foe only of the Green Act proponents whose favourite power sources cannot compete on any level with the atom. The straight facts of Ontario electricity are available to anyone with the time to look at his/her power bill and at the mix of generators that make up the provincial power supply.

I suspect that the average ratepayer views the manufactured furor over the Debt Retirement Charge as the trumped-up hyperbole that it is. The DRC is the portion of the debt of the old Ontario Hydro that was deemed, at the time of “deregulation,” to be non-serviceable through the normal operations of Ontario Hydro’s successor companies OPG and Hydro One. It is regularly attributed to the first Darlington nuclear project, which ended up costing twice the original estimate. That attribution is wrong, and politically motivated, but I won’t quibble with it.

The important thing is that the DRC adds 0.7 cents to every kilowatt-hour consumed by most Ontario ratepayers. It is trotted out by every anti-nuke as evidence that nuclear is too expensive. Meanwhile, the same crusaders applaud the astronomical feed-in tariff rate for wind power, which is 13.5 cents per kWh—nearly twenty times the DRC rate. They also applaud the micro-FIT rate for solar power, which is 80 cents—more than 114 times the DRC.

Aside from the ridiculous difference in the per-kWh rates, wind and solar energy don’t even reduce pollution emissions. They cannot survive on a grid without fossil backup.

Only an innumerate would say that wind/solar are preferential to nuclear. Yet this is what wind/solar advocates do regularly. That is how welded they are to their own financial interest.

As I said, I have faith that my fellow Ontarians recognize the innumeracy that underpins the Green Act.

I am also a student of reality. The current government is not anti-nuclear. As I have pointed out many times, the nuclear refurbishments that have rejuvenated the nuclear workforce, and repositioned it as a critical strategic component of Ontario’s and Canada’s energy future, have taken place mostly under the current government.

So how to reconcile nuclear with the Green Act? The Green Act’s aim was to “green” Ontario’s electricity supply. Ontario’s electricity supply is already extremely green: as I write this, the GHG emission intensity of Ontario grid electricity was less than 75 grams per kWh. Germany, in its heart of hearts, yearns for that kind of emission intensity, and has been sternly lecturing the world for the past decade on how to move to that kind of utopia. Germany’s own emission intensity is north of 600 grams—more than 8 times Ontario’s!

So the government should make the DRC a permanent line item on the Ontario power bill, but first change it from Debt Retirement Charge to Climate Change Contribution.

Nobody will argue with Climate Change Contribution. And Ontario will have the funds it needs to begin Darlington B.

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