Ontario's revamped energy plan has an ag focus

Wednesday, December 4, 2013

by SUSAN MANN

Some long-standing farm industry energy related requests have found their way into Ontario’s updated energy plan and will likely benefit Ontario’s farmers, but escalating electricity rates are taking the shine off the new plan, say industry spokespeople.

The provincial government’s Long Term Energy Plan, released Monday, contains proposals to:

• Bring natural gas infrastructure to more rural and northern Ontario communities.
• Introduce a new combined heat and power program targeted at greenhouse operations.
• Source additional bioenergy as part of a competitive process for renewable energy.
• Build a new transmission line and station for the Windsor-Essex area to address growth anticipated to come mainly from the greenhouse industry. Hydro One is in the early stages of planning for the new line and cost recovery for transmission expansion will be established during the approvals process.

The plan balances five principles to guide future decisions – cost effectiveness, reliability, clean energy, community engagement, and an emphasis on conservation and demand management before building new generation, the government says in a Dec. 2 press release.

George Gilvesy, general manager of Greenhouse Growers of Ontario, says the government’s plan contains a number of positive elements, including the combined heat and power program for greenhouse growers. “We’re looking forward to working with the government on the details surrounding that potential opportunity and other energy initiatives that will contribute to a healthier greenhouse sector.”

He adds the greenhouse industry has been talking to the Ontario government about a combined heat and power program for the sector for “quite some time.”

Similarly, the greenhouse sector has been talking to the government for a long time about upgrading the transmission line in the Windsor-Essex area, which has the largest concentration of greenhouse vegetable production in North America. Inadequate transmission capacity has hampered greenhouse growers’ ability to expand their operations and “that’s been problematic,” he explains.

“This area has been underdeveloped from an infrastructure point of view and the fact that they’re addressing it is excellent. It’s just that four or five years in the future is a long way away,” he notes.

But as greenhouse growers look to increase production to supplying vegetables for 12 months of the year “they’re looking at regimes of growing that include lights” and they’re very concerned about where electricity rates are headed, he says.

Ontario Federation of Agriculture president Mark Wales says “the problem part” of the government’s long-term energy plan is the rising electricity rates. Some federation members are able to generate electricity through various methods and the government plans contain real opportunities but “electricity rates are going to continue to climb and all of our members are hydro users.”

The federation’s lead lobby item has been the need for more natural gas infrastructure for rural Ontario and it will continue pushing that request up to the next provincial election. It’s good to see the government planning to work with gas distributors and municipalities to expand gas infrastructure, he says.

Ontario lags behind the western Canadian provinces in providing natural gas infrastructure to rural areas. Wales says Alberta started a program 20 years ago to install natural gas everywhere and is now at 100 per cent service for rural Alberta, while Saskatchewan is at 92 per cent and will be at 100 per cent in a year or two and Manitoba is at 30 per cent but moving to 100 per cent. In comparison, less than 20 per cent of rural Ontarians have access to natural gas and that means people in those areas are paying “double and triple what they should to heat their homes, dry crops, heat barns, make hot water and do everything we have to do in rural Ontario.”

Christian Farmers Federation of Ontario president Lorne Small was unimpressed by the government’s plan, particularly the green energy portion. The government’s 2013 plan to phase in wind, solar and bioenergy energy generation for three more years than estimated in the 2010 plan isn’t going to make much difference as by the end of that time “80 per cent of the (green energy program) will be rolled out anyway.”

When the program was first unveiled, many people were enthusiastic about the concept but no one anticipated what was coming down the pipe, he says. “The intent was gallant but in reality the roll out and administration have been real disappointments, particularly in rural Ontario,” he says, noting large, international organizations grabbed the bulk of money with their wind power systems instead of the program benefiting many farmers. The government should have rolled the green energy program out slower and allowed community-based systems to be installed.

But it’s good the government is looking at the program and “making some changes,” he says.

Ontario Energy Minister Bob Chiarelli agrees ensuring electricity is affordable in Ontario has been a challenge because of the government’s efforts to make the system reliable and clean during the past 10 years. “When we came into government, the system was broken. We had brownouts and there was a deficit of electricity. We were purchasing close to $1 billion a year in energy.”

The government has invested $31 billion during the past 10 years in transmission and generation to fix the problems, he said during a telephone press conference this afternoon. The government’s work to make energy generation cleaner has resulted in a massive reduction in smog days for large urban areas, such as Toronto and Ottawa, to two annually from 50 to 60.

Chiarelli says “this plan going forward has an ongoing spike in rates for the next several years” with the average increase over the next 20 years of 2.8 per cent annually. But to offset the electricity cost increases, the government introduced a number of programs.

Ontario electricity rate increases are in line with other provinces, he says, noting Alberta’s average increase over 20 years is 3.7 per cent annually; British Columbia’s is three per cent; Manitoba’s is 3.2 per cent; Quebec’s is three per cent and Saskatchewan’s is 3.3 per cent.  

To keep the rate increases down, he says the government has deferred building two new nuclear reactors and taken $15 billion out of the system, renegotiated the Samsung energy renewable energy purchase to save another $3.7 billion over 20 years along with other energy infrastructure decisions.

Oxford MPP Ernie Hardeman, the Progressive Conservative agriculture critic, says the plan shows the government’s energy policy “is presently in disarray. As we’ve said in the past, energy should be an economic policy.” Electricity providers should make it a priority to source power for the best deal possible and provide it to people at the lowest possible price. BF