No turning back the clock on energy policy

ANALYSIS: This week the federal government announced it would be phasing out coal nationwide. But with cheap and dirty energy out of the picture, governments don’t have many options for generating energy, or bringing its cost down
By John Michael McGrath - Published on November 22, 2016
Lakeview Coal Plant in Mississauga, Ontario
Lakeview coal-fired electrical generating station in Mississauga. (J.P. Moczulski/Globe and Mail)

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As Patrick Brown’s Progressive Conservatives have roasted the Liberal government for months over Ontario’s electricity prices, Energy Minister Glenn Thibeault’s office has had a stock response to drop into reporters’ inboxes with thudding regularity. Brown, say the Liberals, wants to reopen Ontario’s shuttered coal plants and move Ontario away from renewable energy projects.

Brown endured some booing from some of his own party members earlier this year when he endorsed a revenue-neutral carbon tax to fight climate change, so he’s not outright denying we need to shift our energy-generation policies: he just disagrees with the Liberals on the solution. And now he's got some political cover from an unconventional corner: the Liberal government in Ottawa — the same one Premier Kathleen Wynne worked so hard to get elected.

Federal Environment Minister Catherine McKenna announced Monday that Canada is toughening its emissions rules for coal-fired power plants, amending a regulation originally passed under the Harper government in 2012 to apply to all coal-burning facilities, not just new plants or those at “the end of their useful life.”

It’s important that the feds are doing this in part to ensure Ontario's coal ban will remain in effect, no matter what happens in the next provincial election. The Liberal government prohibited the burning of coal for electricity a year ago  ( , but like any law there’s nothing keeping the next government from simply repealing it. Binding rules from a higher order of government are another matter entirely.

The long and short of it is that even if the Liberal nightmare of a Brown victory in 2018 materializes, Ontario’s coal-fired power plants aren’t going to be turned on again anytime soon — doing so would run right into the wall of federal opposition and would presumably be challenged in court. The province's coal plants would require costly refits to comply with the new federal rules, and even if that proved technically possible the prices might drive costs higher than what makes sense given Ontario’s other power options, nuclear and natural gas.

But if cheap, dirty coal isn’t on the table that still leaves voters — and the politicians seeking their favour — looking for some way to moderate increasing hydro prices, or even lower them outright. Wynne acknowledged the simmering anger in the province over hydro rates last weekend at the Liberal annual general meeting in Ottawa, calling her party’s years-long obliviousness on the file her “mistake” and promising more relief on hydro bills beyond the already-announced HST rebate.

The problem is that power planning rarely hinges on one major decision that can be easily reversed. Instead, Ontario’s status quo is the product of hundreds of decisions that have accumulated under the Liberal government going back all the way to 2003. Some of those decisions were undeniably necessary, such as in investments in both transmission and generation upgrades the system sorely needed. And while some critics will never make peace with the coal closures, the Liberals won four successive elections with that promise as part of their platform and record. (And that’s just the stuff for which they are directly responsible: the debt retirement charge they inherited from the Harris government was introduced in 1999 and would be old enough to vote in the 2018 election, except the Liberals are finally retiring it just before we go to the polls.)  Just as the province didn’t get here with one big decision, it’s not really credible that a new government of any party could fix things with some kind of big-bang reform.

The government’s signed agreements to refurbish the Bruce and Darlington nuclear stations mean that we already know where most of the province’s electricity is going to come from — and where our spending on electricity will go — out to the 2050s. The same is true of agreements signed with smaller renewable and natural gas generators: we’ll spend decades paying the bills for decisions that have already been made.

(Some green energy critics have argued that a provincial government could, in fact, blow up the renewable energy contracts the province has already signed to save money. Any government that tried would spend years in court — and it might not even lower prices much, though it could be fun to watch in a misery-loves-chaos kind of way.)

The absence of major policy options leaves accounting trickery, such as the HST rebate the government announced earlier this year. Shifting money from the provincial treasury to lower hydro bills is a kind of relief, but that money is coming from somewhere: either tax dollars or the province's ever-growing debt. There’s no actual savings here, just the appearance of it.

But who knows, maybe that will be enough to stanch ratepayer anger. There’s no sign of it lifting Liberal fortunes in the polls yet, but it’s a long way to June 2018.

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