Dumb Epilogue

In this post just last week I took the Canadian Press to task for not asking questions about the possibility that Doug Ford might cut off electricity to three US States in response to Trump’s threatened tariffs on Canadian imports to the US.

The questions were not revolutionary: Can Ford do this? Are there legal contracts in place?

Well, an organization called The Globe and Mail thought those were good questions, and put someone on the job of finding answers to them. You can read the resulting article here if you’re a subscriber. If you’re not, why not? I don’t work for them, but the G&M seems to be the only org in Canada that still tries to do some reporting.

The gist of this ‘Explainer’ article is that there are no actual contracts under which Ontario supplies power to the US. Rather, the electric grid in the Northeast and Northern Midwest of the US is highly intertwined with that of Ontario.

Here are three key paragraphs from the piece.

“Before 2005, Ontario had a relatively balanced electricity swapping arrangement with its American neighbours. It subsequently became a substantial net exporter, but its international transfers peaked around 2015 and have been on a gradual downward trend since then.

The Ford government places little value in those exports. Ontario’s nuclear power plants and hydro dams often produce more power than the province needs, typically overnight during the spring and fall. This forces the Independent Electricity System Operator (IESO) to export some of that surplus power, typically at low or even negative prices.

“The former government set up a process where we do a lot of exporting at a loss,” Mr. Lecce said last week.”

Well, now. It turns out Ontario is selling that power to the US at a loss, sometimes even paying the US to take the electricity (that’s what is meant by a negative price) because Ontario is producing more than it can use.

What to make then of Ford’s threat to ‘stop selling electricity to the US’??

More ‘I’ll shoot my puppy’ threats from Ford, it would seem. No, Ontario does not make a profit on these sales generally, in fact they seem to often sell at a loss, which might seem to indicate that Ontario is not hurting itself if it cuts this electricity to the US off.

But, but, but – it’s not that simple. One cannot forget that Ontario is doing this as the currently easiest way to deal with its own over-production during certain times. So, what’s it gonna do if it does not send this unneeded-in-Ontario power to the US at bargain rates? Light up Queens Park? Send it to Mexico instead?

The electricity exports from Ontario to the US are the easiest way for Ontario’s hydro producers to get rid of excess production, which happens because they cannot shut nuclear and hydro-electric generation facilities down quickly. Or, rather, it is highly costly to do so, so they send the extra power to the US. Even if they have to pay the US users to take it, this is less expensive than the alternative of shutting down production.

More puppy-shooting threats by Ford, then, but a tip of my hat to the Globe for digging into this. Nice to see journalists being journalists rather than click-baiters.

I admit that I do wonder, though: why do those US states want Ontario’s excess electricity if it is available overnight in Spring and Fall? What’s their story?

Well, not our problem, and one cannot answer every question in a single post.