Proof Government Should Do Only What It Does Best–Whatever That Is

   Do not think about, write about or deal with  human behavior without determining the effects of incentives.

   Wherein we see, once again, why politicians should never be in charge of anything. Ontario has an electricity generating system which pretends not to be a government agency but is. It has all the earmarks of modern liberal governments, high pay, redundant staff, rich benefits, jobs for life, increasing costs, low efficiency and etc., all the earmarks of government in action. This is annoying to households, but deadly to industry as real enterprise moves to jurisdictions with lower costs. The liberal dance of death.

    In addition, the government electricity program has the usual nonsense with solar, wind, biomass and other eco-hysteria foolishness sucking up taxpayer money. I could do this poorly for a lot less money.

National Post – (Latest Edition)

68% rate hike not progress 5
Little for Liberals to tout in 20-year energy plan

There is a distinct whiff of futility in trying to assess the impact of Ontario’s LongTerm Energy Plan, if only because the governing Liberals have released 20-year forecasts for the province’s electricity demand, supply and costs in 2007, 2010 and again on Monday, three years after the last one.


    I pay little attention to government forecasts. They remind me of the earnest entreaties of prisoners. When they say they will not sin again, do not believe them. When they say they will, believe them. Here, the politicians are saying rates will rise significantly. Believe them.

Suggested slogan: This Time We Mean It.

But, to the extent that the government has released this version of the LTEP to celebrate all that has taken place in the energy sector in the past few years, with an eye toward championing those accomplishments during an expected spring election campaign, it is worth examining what the Liberals have to be triumphant about. Short answer: Not much. The document released by Energy Minister Bob Chiarelli makes conservation the government’s central energy goal, a position that is dramatically undermined by the fact the province’s regulated time-of-use residential electricity rates just jumped by 7.5% for the off-peak hours of the day. The rates increased the most, in fact, for off-peak times, which sends a strange signal when trying to convince consumers to switch their energy use to periods of low demand.

The other main thrust of the new-new plan, which expects total energy production in Ontario to increase not much at all over the next 20 years, is that consumers will continue to see electricity bills rise steadily — although, as the Liberals say, not as sharply as they were expected to increase. This counts as progress. At a time when energy demand is on the decline due to the collapse of the manufacturing industry, and when market forces have driven electricity prices down in other jurisdictions, Ontario residents will see their bills rise by 42% over the next five years, 54% over the next 10, and 68% over the next 20 years. (Those numbers assume that the Ontario Clean Energy Benefit, a 10% rebate for consumers, is eliminated as scheduled in 2016.) That the Liberals are now patting themselves on the back over this is because the 2010 forecasts had Ontarians paying, in 2030, 82% more than they are today. “We are saving ratepayers money,” is how the energy minister characterized it on Monday. That’s code for “they were going to be extraordinarily gouged, but now they will only be really gouged.”


    We could have screwed up more. Be happy we didn’t.

But even that accomplishment deserves a closer look. Some of the reduction in forecasted costs between the 2013 plan and the one issued in 2010 is tied directly to measures related to the much-maligned Green Energy Act. The province in July announced that it had revised its signature sole-source, wind-power deal with Samsung to $6-billion from $9.7-billion, with resulting savings to be passed onto electricity ratepayers — although the province is also receiving less investment from Samsung in return. Ontario also lost a WTO trade ruling that outlawed the made-in-Ontario part of the Green Energy Act, which was intended to keep investment in renewables inside the province.


   We’re not wasting as much money on wind power as we were. You have to be pleased about that!  We fixed the deal with Samsung—They don’t say it was our government which made to first stupid deal Be thankful we made the deal less stupid.

Now that green-energy investors can bid internationally, the province expects lower costs — but in exchange will have less investment in Ontario. And the government also won a court ruling that allowed it to “dispatch” surplus wind energy from the grid at times when it isn’t needed — so now instead of having highly subsidized wind energy added to the mix at times of steady demand, which happens a lot since the wind often blows when it isn’t needed, the province will instead pay wind producers not to produce energy. It is the lesser of two evils. On Monday afternoon, as Mr. Chiarelli was unveiling the energy plan in the Ontario legislature, wind turbines were producing about 0.2% of the province’s electricity.

The lower costs being touted in the new energy plan are, in other words, partly a result of the province receiving less green-energy investment and an admission that wind energy is too unreliable to be of consistent use to the electricity system. Take a bow, everyone. Stellar work.

Some of this could be overlooked as the natural consequence of managing a highly complex and fluid system, but it’s hard to make excuses for a government that has made energy a highly politicized file. It jumped into the green-energy sector enthusiastically in 2009, and vowed that it would not stand for NIMBYISM if local objections to proposed energy facilities sprouted up. It stuck by that argument for long enough to cause countless rural communities to fruitlessly argue against windturbine developments, in a part of the province that was not seen as key to their electoral fortunes, but when the wind opponents turned up in Toronto to protest plans for offshore development, the Liberals folded and put in an offshore moratorium, even as turbines were erected in fields all over non-Liberal ridings. Meanwhile, there is this business of the gas plants you might have heard something about.


  The government cancelled plans for two gas-turbine generation plants for political reasons. This only cost  1.2$ billion.

Otherwise on Tuesday, the government touted an initiative to allow upfront financing of energy-efficient retrofits, with homeowners to pay them off through adjustments to their electricity bills. But the Liberals had no explanation for how such projects would work, saying those details would be sorted out later. The energy minister told reporters that the particulars would hopefully be known by the middle of next year. So, six months from now. Maybe longer. Better hold off on that solar-panel purchase for a while. Vague promises, with the details to be sorted out later. It sounds an awful lot like the Liberal transit strategy. At least they are consistent.


    These pathetic, overpaid fools couldn’t organize a one-car funeral. This is a real-life, textbook example of why politicians should never run anything. In addition to the outrages outlined above, the province exports electricity produced by wind and solar in off-peak hours. The goods news is that the taxpayers only lose $1.6 billion per year.

   It’s not that we have the wrong politicians running things. The problem is we have politicians running things.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies


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