What is with Ontario’s extremely cold winter (and when will it end)?
Tuesday, 11 March 2014 15:07

The recent period of low temperatures, high electricity demand, and higher-than-normal market prices have
caused many customers to call the IESO to inquire about what factors have led these market outcomes.
To assist, the IESO has created a document for customers to help explain what we are seeing:

http://www.ieso.ca/Documents/Pages/Ontario%27s-Power-System/IESO-Market-Update_Winter2014.pdf


 
Ontario Distribution Consolidation: What is Missing? How can the Ministry of Finance Help?
Friday, 17 January 2014 09:38

Ontario Distribution Consolidation: What is Missing?

How can the Ministry of Finance Help?

Respectfully Submitted by Ray Tracey, President & C.E.O, Essex Power Corp.

To

Minister of Finance

Waterfront Hotel Downtown Windsor, Ontario Room
277 Riverside Drive West, Windsor
January 16, 2014, 11:00 a.m. - 1:00 p.m.


Preface to the current LDC Sector status as it relates to Consolidation:
The Sector review panel issued on Dec. 12, 2013, clearly had one main theme. More rationalization through consolidation was required in the Distribution Sector with a vision of 6- 8 regional LDCs to replace the current 70 plus that exist in the Province today.

Even though many proponents that participated in the Sector Review data collection and market outreach processes presented a number of quantifiable “value” opportunities to lower electricity costs and increase efficiencies in the sector, all seemed to have been ignored except for the main focus on consolidation. It is important to remember that savings that occur across the distribution sector affect only 20% of the average electricity ratepayer’s monthly bill. The graph below demonstrates that Essex Powerlines’ distribution rates have kept in line with inflation while Provincial costs have skyrocketed more than 120% since 2005.



A consistent concern expressed by many on the report’s findings and its credibleness was the “pick and choose” data comparisons it used to defend its position that the small the medium size LDCs were less efficient from large ones as it ignored the inclusion of data for Hydro One and Toronto in those comparisons. Interesting that these two LDCs benchmarked below most small and medium sized LDCs with regard to LDC efficiency and as such the data would have clearly contradicted the panel recommendation that “bigger will be better”.

To move away from the contentious recommendations of the report and focus on what is needed to support sector rationalization requires a clear answer from the “Government of Ontario”: What are you willing to do to support Distribution rationalization and a “fair market” for ALL to participate in?

Up to now all we have is a letter issued by Minister of Energy, Bob Chiarelli stating that the government supports a volunteer process towards consolidation and that it would like to see market activity happen sooner versus later. Additionally it seems to indicate that if market activity towards rationalization was slow than it may need to revisit its position regarding a “voluntary” process.

What the government failed to do since issuing this letter, is provide any tools and incentives for these 70 plus LDCs to establish sound investment and business plans to move forward to facilitate rationalization through consolidation. Remember the mandate is to eliminate 9 out of every 10 LDC entities that exist today through some type of Win-Win scenario that respects the rights of the corporations, their Shareholders and most importantly customer rate interests.

In this process of consolidation there will be buyers, sellers and new partners. Since the industry had already experienced massive rationalization from 300 plus when the market was restructured in early 2000, it is safe to assume that most remaining LDC market participants exist today for good reasons. They have satisfied owners, customers and provided solid business plan to support their existence. Clearly incentives and  tools will be needed to convince a viable LDC and its Shareholders to join a “massive” rationalization desire of the Government when their current business plans don’t have that as a mandate or objective.

Do we have a current market construct for rationalization that even allows most of the LDCs to participate other than to become a SELLER? Market premiums have already jumped to the highest levels seen in the market place since the unregulated market was established. LDCs are significantly restricted from raising new Capital that would be required to establish regional entities. Our current municipal Shareholders are not permitted to insert new equity and we have severe limitations restricting the opportunity for private sector involvement as potential partners.

Only the largest of the large LDCs in Ontario has the real access to the capital needed to result in massive rationalization. Today’s market is totally superficial; there are NO real competitors when it comes to a Buy/Sell marketplace. Market values and purchasing premiums are being established by only ONE buyer. Partnership unless done at scale level that involves hundreds of thousands of customers is being viewed as avoidance to the Sell option rather than as progressive.

Are Ontarians being well served when provincially controlled agencies under the Government’s authorization enter into significant transactions within any given sector that will amount to billions of dollars spent in acquisitions and do so without real competition and the discipline of private sector is left out of the Market construct?

Specifically, are Ontarians and Electricity rate payers being well served when provincially controlled electricity agencies that time after time are being publicly audited and then chastised from the findings for over spending and generous employee compensation packages are given preferential treatment in a marketplace? Is this prudent provincial financial policy?

How can the Minister of Finance help towards Distribution Rationalization desired by this Government for the Sector?



Lessen restrictions on private sector investment in distribution sector to 49% (minority share);

  • Allows all distributors to gain access to new capital
  • Levels playing field between large and small distributors
  • Premiums paid for sale/transfer of assets would be driven by prudent, private sector investment and not borne by Provincial taxpayers/Ontario electricity ratepayers
  • Distributors would not need to carry large consolidation premiums which frees up capital to respond to emergency situations (ie Toronto Ice Storm)

Facilitate the fair sale of Hydro One distribution assets where such sale will create shoulder to shoulder, regional distributors

  • Encourages consolidation/collaboration to occur across multiple distributors;
  • Does not force Municipal shareholders/stakeholders out of LDCs
  • Accountability of LDC kept local/regionalized

 

TO DOWNLOAD A PDF COPY OF THS SPEECH CLICK HERE

 

 
NOTICE OF APPLICATION 2014
Thursday, 02 January 2014 00:00

NOTICE OF APPLICATION AND HEARING FOR AN 
ELECTRICITY DISTRIBUTION RATE CHANGE 
Essex Powerlines Corporation

Essex Powerlines Corporation (“EPLC”) has applied to the Ontario Energy Board for
approval to change its delivery charges beginning May 1, 2014.

For additional information on billing items visit the Consumer page of the Board’s
website at http://www.ontarioenergyboard.ca.

CLICK HERE TO DOWNLOAD THE RATE APPLICATION

 

 

 

 

 

 

 

 

 

FOR IMMEDIATE RELEASE FROM ESSEX POWERLINES CORPORATION

December 6, 2013

Essex Powerlines Corporation Update on momentary outages affecting customers in Amherstburg


Essex Powerlines and Hydro One are continuing to work together to determine the cause of the momentary outages that affected customers in the Town of Amherstburg. Since Essex Powerlines moved the Monopoly subdivision and Crown Ridge customers from the 24M7 feeder to the 23M3 feeder on November 14th, we have had no recorded customer momentary outage power problems from that area. A small number of Essex Powerlines customers do remain on the 24M7 feeder though and we would request those customers continue to report momentary outages to our office. We require the date and times for these outages if they are still occurring.


The fault current created by this problem is difficult to find because it is intermittent, not sustained, and small enough that most of our detection equipment cannot detect it. Intermittent faults are very time consuming to determine and locate. We have, however, concluded that this fault is outside of Essex Powerlines distribution system so we are working with Hydro One to detect and resolve the problem. The transfer of the Monopoly and Crown Ridge customers from the M7 to the M3 feeder will remain in place until further notice.


The public meeting that was originally planned for December will be delayed until the New Year as Essex Powerlines and Hydro One continue to collect data and come up with a permanent plan to resolve this issue.

Click here to download a PDF copy of this release

 

 
Friday, 06 December 2013 09:00

Click here to download a PDF copy of the press release

 

 

Essex Powerlines Corporation responds to Ontario’s Liberal Government recently released Long Term Energy Plan

 

The Ontario Liberal Government Long Term Energy Plan (“LTEP”) released on December 2, 2013 indicates that electricity rates will need to increase 33% over the next three years and 42% in the next five years.

Many of our customers are continuing to struggle as the Ontario economy, especially in Windsor/Essex, continues to rebound. While local industry has recently shown signs of moderate recovery, we are still feeling the impact of a weak economy and the challenges of globalization.

Essex Powerlines Corporation would therefore like to bring clarity to our customers on where these increases are coming from on their electricity bill and what Essex Powerlines is trying to do by working with customers in order to mitigate these anticipated price increases.

As your local distribution company we have absolutely no control over these recently announced cost increases as they represent the Provincially controlled portion of the electricity bill. While these increased costs will appear on your Essex Powerlines bill, it is important to understand that these are pass-through costs that flow back to the various government energy agencies such as Hydro One, IESO, OEFC, OPG and others.

 

Today, Essex Powerlines represents approximately 21% of a customer’s electricity bill and we are quite satisfied that our portion of the electricity bill costs has stayed relative flat since 2005. However, the impacts of the proposed Provincial increases are alarming. As indicated in Figure 1 above, by 2016 we will only represent 19% of the overall electricity bill as Essex Powerlines continues to hold the line on cost and rates all the while Provincial charges grow at double digit rates.

The chart below tracks the cost related to the local service provided by Essex Powerlines versus the Provincial charges on the electricity bill since 2005 and projects out to 2016 based on the recent LTEP.

While the local distribution charges have remained stable over this entire period the Provincial charges increases should clearly be a concern to consumers.

Essex Powerlines is locally owned and controlled by four local municipalities in the areas that it serves and therefore has a higher degree of accountability to the type and cost of service it provides. Our Shareholders would simply not accept increases in our cost structure such as those that are being proposed in the LTEP for the Provincial charges.

As a further illustration of yearly percentage rate changes, Figure 3 below provides a comparison of inflation rates to the increases that consumers are seeing to the various portions of their electricity bill.

Essex Powerlines was pleased, however to hear that as part of the LTEP our role in Conservation programs will be expanding and we will be able provide a more customized set of offerings to our customers. Consumers will need to be engaged in these programs to mitigate future rate increases. Essex Powerlines will continue to work at the ground level as we have done in the past in order to find ways for our consumers to reduce their energy costs.

The recent announcement of the closing of Heinz in our Leamington service area, eliminating approximately 700 permanent jobs is a clear sign that we need to be as diligent as ever in order to maintain lower and reasonable costs for all our customers. While Essex Powerlines is committed to finding additional efficiencies in the distribution sector, the Provincial government must also focus on controlling the escalating costs on the remaining 80% of the electricity bill through stringent review of all Provincially owned agencies and policies.

-30-


For more information contact:
Name: Joe Barile
Title: Legal, Human Resources, Regulatory Advisor
Tel number: 226-252-6258
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

 
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