Ontario Energy Minister Glenn Thibeault is pushing back on reports that his province is closing in on a massive, eight terawatt-hour-per-year power purchase agreement with Quebec, vowing not to accept the deal unless it translates into lower electricity costs for the province’s ratepayers.
La Presse reported yesterday that Hydro-Québec was getting ready to conclude an historic, 20-year contract that would quadruple the province’s sales to Ontario beginning in January 2018, supplying enough electricity to power 800,000 homes. But the draft agreement, dated June 22, would have set a power purchase price of 6.12 cents per kilowatt-hour, higher than Quebec’s average export price of 4.8¢. Thibeault’s office released a June 27 letter in which the minister pointed out to his counterpart, Pierre Arcand, that the plan would have cost the average Ontario power user C$30 per year, while requiring “significant” reductions in the province’s own solar, wind, and hydroelectric resources.
“Reducing costs for Ontario ratepayers is a foremost concern for me,” Thibeault wrote.
His office said it would continue negotiations with Quebec in search of a “cost-effective” arrangement that would lead to lower electricity costs, and enable the province to scale back its greenhouse gas emissions by cutting back on natural gas use. “While we haven’t yet received an offer that meets those core objectives, we look forward to continued discussions with our Quebec counterparts,” Thibeault’s statement noted.
But while Thibeault and Conservative energy critic Todd Smith cast the 6.12¢/kWh offer as a bad deal, the Ontario Clean Air Alliance hailed it as a breakthrough compared to the 9¢ Ontario would pay to extend the life of its aging Pickering nuclear station, or the 16.5¢/kWh that it would cost to rebuild the Darlington nuclear plant.
“This deal is still far from maxing out both Quebec’s supply of low-cost power and Ontario’s ability to import such clean, green power. But it is a big step and paves the way for expanded imports in the future,” wrote Outreach Director Angela Bischoff.
“With this agreement in place, there will be even less reason to keep the old and dangerous Pickering Nuclear Station operating in the heart of the Greater Toronto Area,” she added. “The government’s next step should be to order Ontario Power Generation to shut down North America’s fourth oldest nuclear plant in 2018 when its licence expires.”
Last fall, Premiers Kathleen Wynne and Philippe Couillard announced a seven-year, 14-TWh import-export agreement, which Ontario expected to reduce its electricity system costs by about $70 million.