In early May I wrote about the efforts of the Ontario government to entice an American mining company to start a major operation in northern Ontario. The company, Cliffs Natural Resources, would be a major electricity user: it wants to mine chromite, and modern chromite mining requires big electric arc furnaces. I predicted at the time that Cliffs would not be required to pay the same price for electricity that most Ontario residents pay; if it were, it would refuse to open shop in Ontario. The provincial government needs more economic development, not less. Turns out I was right. Three days ago, the Toronto Star reported that Cliffs, and other major power users, would pay a rate of 5.5 cents per kilowatt-hour.
Those who follow Ontario electricity know that 5.5 cents is one-tenth of a cent cheaper than the regulated rate for the nuclear-generated electricity from the plants of the provincially-owned electric utility Ontario Power Generation. The rate for big industrial users was announced by energy minister Chris Bentley, who a month ago reminded a legislative committee—on which his governing party does not hold a majority—about the central importance of nuclear energy to Ontario.
In other words, Bentley is basing a major industrial kick-start on power rates made possible by the atom.
Good for him, that is the way it should be.
Now, how will this shake out when it comes to actually implementing the industrial power rate? Don’t forget that the 5.5 cents is effectively a proposal from a minority government. And don’t forget that the government’s budget was “altered”—against the government’s will—by the combined opposition only yesterday. (The premier is so furious that he has threatened to call an election.) So if the opposition doesn’t like the 5.5 cent proposal, then conceivably that proposal might not come into effect. But it is very encouraging that the government has acknowledged that the regulated rate for nuclear energy, under which OPG turns a profit, is the benchmark price for industrial development.
It is also very encouraging that even the government, whose Feed-In Tariff program forces ordinary rate-payers to pay ridiculously high prices for useless wind power, didn’t even talk up FIT when it announced the the industrial deal. What’s the point?
They know that FIT is a job killer, not a job creator.
You want jobs and economic development? Then go nuclear. The government Liberals and opposition Conservatives appear to agree at least on that.