A story from CANOE about the socialist premier of Ontario, Dalton McGuinty.
Dalton McGuinty constantly extols the virtues of so-called green energy.
One North Bay company, however, is sounding the alarm that the costs of this expensive program are forcing companies to lay off staff — and will eventually force many of them to leave the province.
John Spencer is an executive with Fabrene Inc., a company that makes industrial fabrics.
The Liberal government’s green energy plan has added $1 million a year to his hydro bill — an amount he says will eventually force his company out of this province.
There’s a line on corporate energy bills called the Global Adjustment.” It’s that line that pays for renewable energy projects.
Spencer’s seen the GA soar over the past few years — from 5% of his bill to 42%.
In his most recent report, provincial auditor general Jim McCarter warned by 2014, the Global Adjustment is expected to be six cents per kilowatt hour — nearly two-thirds of the total electricity charge
The GA is expected to increase tenfold province-wide, from about $700 million in 2006 to $8.1 billion in 2014, when the last of the province’s coal-fired plants is phased out.
Almost one-third of this $8.1 billion is attributable to costly green energy contracts.
That will sound the death knell for his company in this province, Spencer said.
“My company won’t make it that far.”
The cost of hydro itself is competitive, he said. It’s the GA — and the $1 million it’s adding to his bill that’s killing jobs.
Electricity is now his third biggest cost — after raw materials and labour.
He has to explain that non-competitive rate to plants in the U.S., South America, China and Europe.
“It’s a very bleak outlook,” he says.
“It’s a runaway freight train. We’ve got to stop it in its tracks or we’re going to kill a great majority of small and medium sized companies,” Pearson said.
Ironically, at least 42 of the largest companies in the province are exempt from the GA.
It’s important to learn from other countries what works and what doesn’t work.
Green energy and the Ontario economy
The National Post wrote about how the Ontario government wastes taxpayer money to subsidize big corporations who experiment with unproven, expensive energy programs, like solar power.
The Swedish retail giant IKEA announced yesterday it will invest $4.6-million to install 3,790 solar panels on three Toronto area stores, giving IKEA the electric-power-producing capacity of 960,000 kilowatt hours (kWh) per year. According to IKEA, that’s enough electricity to power 100 homes. Amazing development. Even more amazing is the economics of this project. Under the Ontario government’s feed-in-tariff solar power scheme, IKEA will receive 71.3¢ for each kilowatt of power produced, which works out to about $6,800 a year for each of the 100 hypothetical homes. Since the average Toronto home currently pays about $1,200 for the same quantity of electricity, that implies that IKEA is being overpaid by $5,400 per home equivalent.
Welcome to the wonderful world of green economics and the magical business of carbon emission reduction. Each year, IKEA will receive $684,408 under Premier Dalton McGuinty’s green energy monster — for power that today retails for about $115,000. At that rate, IKEA will recoup $4.6-million in less than seven years — not bad for an investment that can be amortized over 20.
No wonder solar power is such a hot industry. No wonder, too, that the province of Ontario is in a headlong rush into a likely economic crisis brought on by skyrocketing electricity prices. To make up the money paid to IKEA to promote itself as a carbon-free zone, Ontario consumers and industries are on their way to experiencing the highest electricity rates in North America, if not most of the world.
The government’s regulator, the Ontario Energy Board, has prepared secret forecasts of how much Ontario consumers are going to have to pay for electricity over the next five years. The government won’t allow the report to be released. The next best estimate comes from Aegent Energy Advisors Inc., in a study it did for the Canadian Manufactures and Exporters group. Residential rates are expected to jump by 60% between 2010 and 2015. Industrial customers will be looking at a 55% increase.
Going back to 2003, based on numbers dug up by consultant Tom Adams, the price of residential electricity in Ontario hovered around 8.5¢ a kWh in 2003 — the first year of the McGuinty Liberal regime. By 2015, Aegent Energy estimates the price will be up to 21¢, an increase of 135%. Doubling the price of electricity in a decade is no way to spur growth and investment.
Messing around with green energy doesn’t just hurt businesses – it hurts consumers, too.