NOTL Hydro Board urges Minister of Energy to cancel FIT5

March 1, 2017

An Opportunity to Stop Adding Additional Costs to the Ontario Electricity System

March 1, 2017, Niagara-on-the-Lake –Niagara-on-the-Lake Hydro’s Board is calling on the Minister of Energy to cancel all new renewable generation projects in the FIT 5 program. The FIT (Feed-In Tariff) programs are a series of procurements of renewable energy and provide fixed rate contracts for 20 years and more at above market prices to successful applicants.  They were introduced as part of Ontario’s Green Energy Act of 2009 to facilitate the market transformation of renewable electricity generation.

An analysis of the last round of contracts (FIT 4), a total of 241 MW awarded in June 2016, shows that Ontario electricity consumers will be paying an estimated $27.4 million a year over and above the already high cost of electricity in Ontario and will contribute another $61 million to the Global Adjustment each year.  The generation being built under these contracts, predominately solar, will begin producing electricity in 2017 and 2018 and will continue to generate high-priced electricity over the 20 year life of these contracts.

“We are not against renewable generation, we are against the method of how the Province is procuring it”, said Jim Ryan, Chair of NOTL Hydro. “We cannot continue to add $30 million here and $20 million there to the overall cost and not realize that this is going to have a cumulative impact. Today’s high prices are evidence of this.  No FIT5 contracts have yet been awarded or signed so the Minister would have the right to cancel the process and save Ontario electricity consumers tens of millions of additional costs.”

NOTL Hydro believes renewable energy is the future of electricity, but that its procurement should be driven by market demand at commercially acceptable prices.  Many countries are seeing solar energy being offered at below market prices due to continued improvements in the technology.

In his December 16, 2016 directive to the Independent Electricity System Operator (IESO), the Minister of Energy cancelled the planned 2017 program (FIT 6) and scaled back the current FIT 5 program to 150 MW. The Board of Niagara-on-the-Lake (NOTL) Hydro congratulates the Minister on taking this important step towards containing the rising cost of electricity generation in Ontario but thinks the Minister can do more by cancelling the current call for projects.

The Board of NOTL Hydro has previously urged the Minister and the Premier to take steps to reduce the high cost of electricity in Ontario and has provided concrete suggestions.