Opinion: OPA and Hydro One are falling down on the job

Monday, February 3, 2014

Present policies of our utilities are not serving rural customers well and are encouraging large energy users to move away or set up their own generating facilities. And OPA's off-peak rate increase is just a money-grab from consumers

by RALPH WINFIELD

Some of us remember the home farm being electrified. It saved us carrying lanterns, pumping water and hand-milking cows, as well as cranking the cream separator manually. Electrical energy (or hydro, as we did and still do call it in Ontario) made life a lot easier on the farm.

Ontario Hydro got the water-related name because virtually all of the early electrical energy was generated by falling water – primarily at Niagara Falls. Sir Adam Beck, the father of Ontario Hydro, ensured that electrical energy was supplied to all customers "at cost." As late as the 1960s, that philosophy was maintained all across Ontario.

By the 1960s, electrical energy was also being supplied by nuclear and coal-fired plants to meet the increasing need, as well as "peak demand" created at specific times of day and times of year. Some gas-fired peaking plants, as well as the reversal of water flow at Niagara Falls, was being used to meet the short-time peak demands.

Short-time peak demands started to be an issue with Ontario Hydro and the electrical utilities serving customers in localized built-up areas. Farm customers were not charged for demands under 50 kilowatts.

However, when a demand over 50 kilowatts was exceeded at any time during the month – a 30-day billing period – a charge was applied. Thus, farm customers started to use discretion and stage some work activities to eliminate or minimize demand charges. For example, gutter cleaners and silo unloaders were not operated at the same time.

Similarly, electrical utilities which purchased bulk power from Ontario Hydro were also demand-conscious. For example, when we lived in Don Mills and purchased electrical power from North York Hydro, they provided a water-heating special. You could sign up for a flat rate per month for hot water produced by a 40-gallon water heater with standard-sized heating elements. The water heater leads bypassed the hydro meter. At any time of day or night, the utility could shed a peak load by electronically dumping many of those water heaters for a few minutes or a couple of hours. It was a win-win arrangement for both parties.

I have personally mimicked that arrangement by putting my electrical water heater on a 24-hour time clock. The time clock is set for off-peak time only. On Saturdays, Sundays and holidays, flipping the switch in the time clock can activate the water heater.

Generation capacity and peak demand issues have and will continue to be problematic for electrical generators and suppliers.

Not great in practice
Our present Ontario Power Authority (OPA) and Hydro One, which supply power to most rural customers, do not seem to have gotten all their ducks in line.

Green energy is good in theory, but not really great in practice. The wind does not always blow and the sun does not always shine. Paying a significant premium for these two sources of electrical energy will often be in contradiction of the real needs of Ontario customers.

There is no doubt that demand for air-conditioning on hot summer days has created system peaks. In the 1960s, the yearly peak demand for Ontario Hydro was always on the Monday prior to Christmas day. This was the shortest, coldest day of the year when people were shopping and all the Christmas lights were on.

Many major industrial power users would extend their Christmas shut-down period to include that day and save a significant amount of money in demand charges.

Unfortunately, industrial and commercial customers are both in full production during the day and during the hot weather summer days when peak electrical charges are imposed. These peak charges are one of the primary reasons why commercial and industrial customers are closing up shop and moving their production facilities to jurisdictions that do not penalize them.

Some commercial customers are taking action by generating their own power on site. A number of large grain-drying facilities with access to relatively cheap natural gas are generating their own electrical energy and using all the waste heat from the engine – including the exhaust – to dry corn. What is especially significant is that they are also saving the cost of line extensions and additional demand charges.

Many equipment manufacturers are also taking action to use more efficient electrical motors and refrigeration or air-conditioning systems. This has eliminated a tremendous number of older, less efficient heating and refrigeration systems.

However, it is still a case of buyer beware. I exchanged an old refrigerator/freezer in my shop for a new larger, energy-efficient unit, only to find that it did not operate as expected in a cooler environment. An experienced service representative told me how to trick it when the ambient temperature went below 12.7 C.

Newer lighting systems have permitted a significant reduction in wattage required to produce the same lighting levels. Initially, some of us objected to a slight colour change, but most of us have learned to accept that change.

Failing on methane/biogas
Why isn't OPA promoting a greater use of methane/biogas as fuel to generate electricity? I understand that it is being used extensively in Europe. It can be cost-effective if the biogas is scrubbed to remove the corrosion components. This source, available on-farm and at other locations, could be used 24/7.

A recent trip to Germany, where they reportedly use significant wind energy, did not show a lot of "ugly" wind turbines rearing their heads on the skyline. Visits to a couple of other countries with wind turbines also support this idea. The wind turbines are grouped close to the seaside and, in one case, are actually located in rows out in the water near the location of high demand – Copenhagen.

Gas-fired turbines are an essential part of a generation/distribution system. They can be spun up rather quickly as peaking plants. But it only makes sense to locate them close to the major-use points to minimize the cost of distribution. They could also be located adjacent to major landfill sites, thus permitting the blending of methane/biogas with natural gas.

It has been reported that very cheap electrical energy has been supplied to adjacent power suppliers to get rid of excess power when the sun is shining and the wind is blowing. This does not make the OPA look good in the eyes of consumers who are paying high-tiered rates based on time-of-day use.

Many large energy users are folding their tents and moving their production facilities out of Ontario. These include: Ford Talbotville, Sterling Truck, Navistar, the former Stelco and, last but not least, the H. J. Heinz Company. The job bleed will only stop when OPA offers competitive rates.

Back in November 2009, I received a personalized letter from Hydro One telling me that it had proudly supported the provincial government goal of installing a smart meter in every Ontario home and small business by 2010. The letter went on to list the "three smart things your new meter will do in the future."  I made the assumptions – as I was supposed to – that it would save money for both Hydro One and myself.

Well, guess what? I recently received a Summer 2013 issue of "Connected – Hydro One & Your Community." Under "What's New," I have just been told that they will be applying a "New smart metering entity charge." My question is "Why?" What happened to the savings to Hydro One of not having to pay the wages of a meter reader and supply him or her with a vehicle? Did this cost saving evaporate into outer space?

Most of us do not totally disagree with the three-part utilization rate scheme, as we can move some energy uses into the off-peak period by using newer appliances, such as a dishwasher with a four-hour time delay.

However, many commercial customers cannot shift time-of-day usage. Most retail stores require lighting and refrigeration during the peak hours. There is no chance for major reductions except by changing lighting systems or switching to closed freezer cabinets. Both are, however, worthwhile energy reducers.

But, very recently, OPA announced a rate increase for off-peak nighttime and weekend usage. Let's get real. This is another money grab from all customers, especially those who are attempting to shift power usage.

Why a tax on electricity?
First of all, let us get away from the political aspects of a 10 per cent "Ontario Clean Energy Benefit" that is deducted after the Hated Sales Tax (HST) has been applied to the total bill at 13 per cent!

Electricity, like food, is a necessary commodity for every person in Ontario and elsewhere. Why is it taxed at all?

To attempt to shed further light on this, I went to the Ontario Power Authority (OPA) website: www.saveonenergy.ca/agriculture. While it does provide some useful comparative data, it does not allow most farm/rural customers to use the information directly. Most of the information needs to be interpreted by an energy advisor or a well-qualified electrician. However, it is also very short on the many opportunities for saving energy, except by changing lighting fixtures/systems.

More information should be available to the customer on energy-saving techniques applicable to livestock/poultry housing units as well as grain drying/handling/storing facilities. What has impressed me the most is the number of large commercial facilities that are going totally or partially off the grid by generating electrical energy, using a large natural gas or even a diesel engine.

Rural customers do need reliable advice and an incentive to be individually successful in reducing or shifting their electrical power usage off the grid or to off-peak use times.

Energy audits can be great, but are there a significant number of competent auditors or advisors available? I do not think so. Ontario presently has a good system of certifying crop advisors, but to the best of my knowledge we do not have any such certified group able to give advice, in an unbiased manner, about energy use on most commercial farms in Ontario.

Before I finish, I must admit that I worked for Ontario Hydro from 1969 to 1974. I was employed as an agricultural applications engineer in Toronto, working with individuals and groups of farm-class customers to help them use electrical energy wisely and efficiently. I had support staff at both the regional and area level. BF

Agricultural engineer Ralph Winfield farms at Belmont in Elgin County.