Expensive Experiments

The Liberal government has belatedly pulled the plug on small-scale projects for renewable electricity generation. For ratepayers, those projects will cause an expensive addition to their power bills.

The community feed-in tariff (COMFIT) program facilitated the development of small, inefficient power projects, most of which were wind. For the smallest of these, the price paid by customers—guaranteed to producers for 20 years—is more than six times the rate paid for large-scale commercial wind generation projects.

There are more slightly larger community-based projects, for which the electricity costs close to twice as much as the commercial wind projects.

It should be added that it would be even cheaper to generate electricity from the coal-burning plants that rate-payers will be charged for whether or not they are used. Fuel-based electricity is environmentally unfriendly, but is also more valuable than wind because it is always available when wanted. Nevertheless, for the purpose of this article, we will just compare COMFIT projects with commercial wind projects.

The original plan was to have COMFIT projects provide 100 megawatts (MW) of power. By the end of this year, the total will reach 125 MW.

The government has not had any process to keep the amount of COMFIT power within the original goal. More projects will come on stream in 2016 and after. If all the projects in the pipeline are completed, the total will eventually reach 215 MW.

In 2016, the cost to customers of COMFIT power is estimated to be $84 million. If a few of the incomplete projects drop off so that the total reaches 200 MW, the eventual cost of total power from COMFIT projects will approach $120 million. In both cases, electricity from the COMFIT projects costs about twice what it would have if provided by commercial wind projects.

So, ratepayers will pay $42 million extra for electricity in 2016, growing to $60 million extra in a couple of years, and lasting for a total of twenty years. That is a 3% rate hike in 2016, growing to more than 4% in 2018. The total added cost exceeds $1 billion.

There is no environmental benefit from generating power from inefficient small projects instead of large commercial ones. Many of those living close to the COMFIT projects would be much happier if they were somewhere else.

Meanwhile, a great deal of effort has been spent trying to conceal the cost of conservation efforts from customers, and arguing before the Utility and Review Board that the $33.2 million budget in 2016 for conservation efforts should be reduced.

Energy Minister Michel Samson said that the COMFIT program was a success, having surpassed its goal—as if that were a good thing. A more accurate assessment would be something like:

“The COMFIT program is costing customers a lot of money. Its environmental benefits could have been duplicated by commercial wind projects at half the cost. It was never a good idea.

The program was introduced by the previous NDP government. We are stopping it now, and should have done so much earlier.”

Perhaps that is what they are saying around the cabinet table. Or maybe not. Energy developers say they are hopeful for a smaller replacement program in the fall. Ideally, saner minds will prevail.

The whole COMFIT process has been an expensive experiment with great cost to ratepayers, and no corresponding benefit.


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Reference Material

Power Plays

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