ONTARIO SPOTLIGHT
The Lines of Power
A high priority for large-volume power users has been what appears to be an escalation in electricity costs. The Association of Major Power Consumers in Ontario has surveyed its members on delivered costs of electricity at their plants in Ontario and elsewhere in North America.
"Ontario's rates have gone up relative to other Canadian provinces," says Mike Kuriychuk, an executive with Bowater who serves as AMPCO vice chair. "The message is clear -- Ontario has lost its advantage in electricity prices. Companies in those segments where electricity comprises a significant percentage of product costs are clearly concerned about adverse trends and are reviewing their investment intentions." That includes traditionally well-performing sectors like chemicals, oil and gas transmission and pulp and paper, as well as metals and the all-important automotive category.
One way to fix that is to offer up more, and more diverse, generating capacity. "We believe there is room for new nuclear, coal, natural gas, hydraulic, and renewable sources and all technologies should be allowed so long as they meet environmental standards at reasonable cost," says Kuriychuk.
AMPCO also has expressed concern that the new energy conservation measures being prepared by the McGuinty administration will further dis-incent corporate operations because of higher energy costs.
Cordiano reels off a list of generating projects in repl, while noting the importance of conservation measures on both the corporate and citizen fronts.
"We've taken measures to make sure we increase the supply," he says. "We're re-starting the two remaining units at Bruce Power, with 1540 megawatts. Ontario Power will refurbish its Pickering A unit, at 515 megawatts. A huge water pipe will help boost capacity of Niagara Falls stations, for 230 more megawatts. And there are proposals from the private sector to generate 300 megawatts using wind, solar or other renewable energy sources. And there are another two RFPs out for new generating stations."
In fact, in late September, it was revealed that 154 companies had submitted proposals for projects to fill the government's 2,500-megawatt requests. Meanwhile, there are signs that Ontario and Manitoba -- known for having the lowest-cost power in all of Canada -- may establish a "hydro corridor" for shared energy between the two provinces.
In a June 2004 interview with The Globe and Mail, Ontario Energy Minister Dwight Duncan said Ontario needed to refurbish, replace or conserve 25,000 megawatts of generating capacity by the year 2020, equal to 80 percent of current power supplies. He estimated that these investments would cost CA$25 billion to $40 billion Canadian dollars (US$18 billion to $29 billion).
"People are concerned, and should be concerned, but we have a very clear plan as to how to address these concerns," Cordiano says.
Another way to address the concerns is to offer a better-managed system, which is behind Hydro One's new US$99.3-million, 210-employee grid control center in Barrie, opened in August 2004.
"The energy decisions our government has made so far will go a long way towards a more sustainable and affordable supply of electricity," said Premier Dalton McGuinty at that facility's opening.
Colliers International's Wassmansdorf says a high-power-using customer in 2003 was considering Ontario and was very concerned about the changing regulatory and pricing environment for power. But even though other business factors resulted in no project, the company did not find the province's energy situation to be a deal-breaker, and found the overall cost of power "still relatively competitive."
"As in so many jurisdictions across North America, there's uncertainty as to how deregulation will be implemented," says Wassmansdorf. That touch-and-go process continues against a background of nuclear plant re-starts and the government's promised stand-down of coal-fired plants, as both the national and provincial governments take a stand on improving air quality.
"Ontario's rates have gone up relative to other Canadian provinces," says Mike Kuriychuk, an executive with Bowater who serves as AMPCO vice chair. "The message is clear -- Ontario has lost its advantage in electricity prices. Companies in those segments where electricity comprises a significant percentage of product costs are clearly concerned about adverse trends and are reviewing their investment intentions." That includes traditionally well-performing sectors like chemicals, oil and gas transmission and pulp and paper, as well as metals and the all-important automotive category.
Conference Board of Canada Association of Major Power Consumers in Ontario Canadian Manufacturers & Exporters Ontario Ministry of Economic Development and Trade Statistics Canada Canada's Technology Triangle |
One way to fix that is to offer up more, and more diverse, generating capacity. "We believe there is room for new nuclear, coal, natural gas, hydraulic, and renewable sources and all technologies should be allowed so long as they meet environmental standards at reasonable cost," says Kuriychuk.
AMPCO also has expressed concern that the new energy conservation measures being prepared by the McGuinty administration will further dis-incent corporate operations because of higher energy costs.
Cordiano reels off a list of generating projects in repl, while noting the importance of conservation measures on both the corporate and citizen fronts.
"We've taken measures to make sure we increase the supply," he says. "We're re-starting the two remaining units at Bruce Power, with 1540 megawatts. Ontario Power will refurbish its Pickering A unit, at 515 megawatts. A huge water pipe will help boost capacity of Niagara Falls stations, for 230 more megawatts. And there are proposals from the private sector to generate 300 megawatts using wind, solar or other renewable energy sources. And there are another two RFPs out for new generating stations."
In fact, in late September, it was revealed that 154 companies had submitted proposals for projects to fill the government's 2,500-megawatt requests. Meanwhile, there are signs that Ontario and Manitoba -- known for having the lowest-cost power in all of Canada -- may establish a "hydro corridor" for shared energy between the two provinces.
In a June 2004 interview with The Globe and Mail, Ontario Energy Minister Dwight Duncan said Ontario needed to refurbish, replace or conserve 25,000 megawatts of generating capacity by the year 2020, equal to 80 percent of current power supplies. He estimated that these investments would cost CA$25 billion to $40 billion Canadian dollars (US$18 billion to $29 billion).
"People are concerned, and should be concerned, but we have a very clear plan as to how to address these concerns," Cordiano says.
Another way to address the concerns is to offer a better-managed system, which is behind Hydro One's new US$99.3-million, 210-employee grid control center in Barrie, opened in August 2004.
"The energy decisions our government has made so far will go a long way towards a more sustainable and affordable supply of electricity," said Premier Dalton McGuinty at that facility's opening.
Colliers International's Wassmansdorf says a high-power-using customer in 2003 was considering Ontario and was very concerned about the changing regulatory and pricing environment for power. But even though other business factors resulted in no project, the company did not find the province's energy situation to be a deal-breaker, and found the overall cost of power "still relatively competitive."
"As in so many jurisdictions across North America, there's uncertainty as to how deregulation will be implemented," says Wassmansdorf. That touch-and-go process continues against a background of nuclear plant re-starts and the government's promised stand-down of coal-fired plants, as both the national and provincial governments take a stand on improving air quality.
