[cdn-nucl-l] Fw: Fw: Deregulation in Ontario

["Jerry Cuttler" <jerrycuttler@home.com>]

Interesting comment!
J

----- Original Message -----
From: Al Tschaeche <antatnsu@pacbell.net>
To: Multiple recipients of list ans-pie <ans-pie@nuke-ans.org>
Sent: Saturday, January 20, 2001 6:28 PM
Subject: Re: Fw: Deregulation in Ontario


> Oh for heaven's sake.  Why do Canadians have to spend millions of dollars
on new
> equipment to monitor minute to minute use of electricity?  What was wrong
with
> the old system of building enough generation plants to supply the demand
with
> some extra for maintenance?  Seems to me everyone is trying to make
utilities
> more and more complex and complicated.  Let's go back to keep it simple
stupid.
>
> Why should consumers need to make decisions about when to use electricity?
> There are already too many things to make decisions about now.  Why do
there
> need to be middle men between the consumer and the power generator?  All
the
> middle men do is soak up more money.  Simplicity is what we need not more
> complexity.  Complexity always costs more than simplicity.
>
> We've spent billions on duplicating the phone system with cell phones and
> duplicate phone companies.  We still have no real competition for cable
TV.
> Natural gas prices are high because there is no system to ensure adequate
> supplies, except the market, which only reacts to shortages or over supply
so we
> have huge price swings.  Airline deregulation created hubs and crowding
and now
> there will be two airlines cornering 50% of the American flying market.
Some
> things just shouldn't be deregulated.
>
> Enough ranting for today.  Al Tschaeche antatnsu@pacbell.net
>
> Jerry Cuttler wrote:
>
> > How does this plan stack up?
> > J. Cuttler
> >
> > ----- Original Message -----
> > From: Brown, Morgan
> > To: Cuttler Jerry (home) (E-mail) et al
> > Sent: Friday, January 19, 2001 9:53 AM
> > Subject: Deregulation in Ontario
> >
> > > How Ontario's electricity deregulation will work in 2001
> > > JOHN GRANT
> > >
> > > The Globe & Mail, Thursday, January 18, 2001
> >
> > > Although Ontario's version of electricity deregulation has experienced
> > > difficulties and delays, it's generally on track to open a combined
> > > wholesale and retail market in 2001. But that's not the end of the
story.
> >
> > > When the evolution is complete, users -- including residential
> > customers --
> > > will be able to install "smart" appliances that can evaluate
electricity
> > and
> > > gas prices from hour to hour and decide, under programmed control,
whether
> > > to reduce demand in response. For its part, the Independent
Electricity
> > > Market Operator (IMO) will be posting electricity prices on the
Internet
> > > every hour right from the start, and industrial and commercial users
will
> > > probably respond quickly to their new options.
> >
> > > Many retailers, including financial institutions and merchants, will
offer
> > > electricity -- "green" if the consumer wants it -- often combined with
> > other
> > > products such as gas, long distance, Internet and home security on a
> > variety
> > > of terms, including fixed prices. The customer who doesn't choose a
> > retailer
> > > will just pay the going wholesale hourly rate, passed through by the
local
> > > distributor. Some will prefer to deal with retailers who offer fixed
> > prices
> > > for a year or more; others will prefer retailers who help them install
> > > interval meters to take full advantage of hourly prices by shifting
their
> > > larger loads, such as the washer and dryer, to the cheaper off-peak
hours.
> >
> > > So will prices be as volatile as in California? In that state, the
problem
> > > arose primarily because new generation had not been built in a timely
> > manner
> > > to keep pace with burgeoning demand. Market design is partly to blame,
but
> > > generator siting and environmental restrictions are also major
factors. In
> > > Ontario, the situation is much better. If the nuclear station in
Pickering
> > > is reopened on schedule between 2001 and 2003, if already announced
> > > independent merchant generation projects go ahead without unnecessary
> > > regulatory delay, and if announced interconnection enhancements with
> > Quebec
> > > and Michigan proceed in a timely manner, electricity price volatility
is
> > > likely to be subdued. (Admittedly, there are a lot of "ifs" here.
> >
> > > Ultimately, the adequacy of supply will depend on sellers' confidence
that
> > > the rules are stable, fair and appropriate. Fortunately, there has
been
> > > lengthy stakeholder consultation in the development process.)
> > > Ontario Power Generation (OPG), the successor to Ontario Hydro that
> > > inherited all its generating stations, is committed to selling or
leasing
> > > out enough capacity that no single supplier will control more than 35
per
> > > cent of the electricity available to Ontario. For the first years
after
> > > market opening, OPG is also committed to rebating revenues in excess
of a
> > > defined cap back to consumers through the IMO. Exports and imports of
> > > electricity will go in and come out of Ontario under essentially the
same
> > > rules as domestic electricity, so Ontario will be a contestable market
> > with
> > > prices similar to those in the contiguous U.S. states.
> >
> > > Do consumers understand enough to make informed choices? I'd wager
that
> > most
> > > consumers don't understand the terms of "Standard Supply," or the deal
> > that
> > > they will automatically get from their distributor if they don't
choose a
> > > retailer's offer. Standard Supply will essentially simply pass through
the
> > > wholesale price of energy, and will also entitle the consumer to the
OPG
> > > rebate if there is one. Although it will vary over time, this is
> > potentially
> > > a very good deal.
> >
> > > If consumers sign up to a retailer's fixed price offer and sign away
their
> > > right to the rebate, do they know what they have given up? The
Ministry of
> > > Energy and the OEB should take immediate and effective steps to remedy
> > this
> > > information gap.
> >
> > > The bottom line is, we'll probably avoid the excessive price
volatility
> > > experienced elsewhere. But consumers will have more responsibility,
since
> > > empowerment brings choices.
> >
> > > John Grant served on the Macdonald Committee and the Market Design
> > > Committee, and is currently an independent member of the board of
> > directors
> > > of the IMO. The above views are solely his own.
> > >
> > >
>