Tories question Green Energy Act

Manitoba Hydro 3.5 Percent Rate Increase proposes a smaller electricity rate hike under Public Utilities Board oversight to bolster financial reserves, address debt and Bipole III costs, amid shifting export sales and water flow conditions.

Key Points

It is Manitoba Hydro's proposed 3.5% electricity rate hike for 2019-20 to shore up finances under PUB oversight.

✅ PUB review sought without lengthy hearing

✅ Revenue boost forecast at 59 million dollars

✅ Natural gas rates flat; class shifts adjust bills

Manitoba Hydro is scaling back its rate hike request for next year, instead of the annual 7.9 per cent hikes the Crown corporation previously said it would need until 2023-24 to address debt. 

Hydro is asking the Public Utilities Board for a 3.5 per cent rate increase next year, which would take effect on April 1.

In last week's application, Hydro said its new board is reviewing the corporation's financial picture. Once that is complete, the utility expects to submit a new multi-year rate plan in late 2019 that addresses the organization's long-term future.

"It's too speculative at this point to discuss any possible future rate increases," spokesperson Bruce Owen said in an email.

The proposed increase next year is similar to other jurisdictions and nearly in line with the Public Utilities Board's decision to allow an average 3.6 per cent jump in electricity rates in 2018-19, which began this summer.

"The requested 3.5 per cent rate increase … generates a modest level of net income under average water flow conditions that will assist in gradually building the revenue base and reduce the risk of the corporation incurring a loss" in 2019-20, the rate application said.

If approved, consumers would face their second rate increase from Hydro in under a year.

Crown Services Minister Colleen Mayer said she's sympathetic to customers bracing for another rate increase amid NL rate hike concerns that far exceeds the rate of inflation.

"I hear that, very clearly," she said. "The NDP left us with an insurmountable problem — we're trying to fix that."

Hydro goes to court over special rate class for First Nations residents in Manitoba

National Energy Board OK's Manitoba-Minnesota Transmission Project

Next year's rate increase is projected to bring in $59 million of revenue, boosting the Crown corporation's financial reserves by $31 million.

Without it, the utility would deal with a net loss, it said.

This time, Hydro officials are asking PUB to forgo a rate hearing, suggesting neither itself nor the board has the resources for a lengthy six- to nine-month process to review an application where not much has changed financially and would generate a "minimum level of net income," Hydro said in a letter to the board.

The short-term rate relief, the letter recommends, should be "awarded in a timely and cost-effective manner, recognizing that the corporation's long-term financial forecasts will be finalized and available for review" in late 2019.

Hydro's net income next year will be lower than projected, the rate application said, due to a reduction in export sales and increases in depreciation and financing costs from Bipole III.

"Even though they had a total implosion of their previous board, on this very issue, they haven't learned lessons and they continue to be cheerleaders for these rapid rate increases," Kinew said, referring to the exodus of every board member but one earlier this year.

Manitoba Hydro's burgeoning debt surpasses $19 billion

On natural gas, Manitoba Hydro is asking PUB for no rate increase for the next two years.

There will, however, be some changes in rates in different customer classes, Owen said, resulting in modest rate reductions for mainly residential customers and increases for customers who use a lot of natural gas.

The corporation also wants to stop collecting fees to support the furnace replacement program. The initiative will continue with existing fees.

Related News

• Electricity Forum News

• Energy Policy News

Summer Heatwave Electricity Shut-offs strain power grids as peak demand surges, prompting load shedding, customer alerts, and energy conservation. Vulnerable populations face higher risks, while cooling centers, efficiency upgrades, and renewables bolster resilience.

Key Points

Episodic power cuts during extreme heat to balance grid load, protect infrastructure, and manage peak demand.

✅ Causes: peak demand, heatwaves, aging grid, AC load spikes.

✅ Impacts: vulnerable households, health risks, economic losses.

✅ Solutions: load shedding, cooling centers, efficiency, renewables.

As temperatures soar across various regions, millions of households are facing the threat of U.S. blackouts due to strain on power grids and heightened demand for cooling during summer heatwaves. This article delves into the causes behind these potential shut-offs, the impact on affected communities, and strategies to mitigate such risks in the future.

Summer Heatwave Challenges

Summer heatwaves bring not only discomfort but also significant challenges to electrical grids, particularly in densely populated urban areas where air conditioning units and cooling systems, along with the data center demand boom, strain the capacity of infrastructure designed to meet peak demand. As temperatures rise, the demand for electricity peaks, pushing power grids to their limits and increasing the likelihood of disruptions.

Vulnerable Populations

The risk of electricity shut-offs disproportionately affects vulnerable populations, including low-income households, seniors, and individuals with medical conditions that require continuous access to electricity for cooling or medical devices. These groups are particularly susceptible to heat-related illnesses and discomfort when faced with more frequent outages during extreme heat events.

Utility Response and Management

Utility companies play a critical role in managing electricity demand and mitigating the risk of shut-offs during summer heatwaves. Strategies such as load shedding, where electricity is temporarily reduced in specific areas to balance supply and demand, and deploying AI for demand forecasting are often employed to prevent widespread outages. Additionally, utilities communicate with customers to provide updates on potential shut-offs and offer advice on energy conservation measures.

Community Resilience

Community resilience efforts are crucial in addressing the challenges posed by summer heatwaves and electricity shut-offs, especially as Canadian grids face harsher weather that heightens outage risks. Local governments, non-profit organizations, and community groups collaborate to establish cooling centers, distribute fans, and provide support services for vulnerable populations during heat emergencies. These initiatives help mitigate the health impacts of extreme heat and ensure that all residents have access to relief from oppressive temperatures.

Long-term Solutions

Investing in resilient infrastructure, enhancing energy efficiency, and promoting renewable energy sources are long-term solutions to reduce the risk of electricity shut-offs during summer heatwaves by addressing grid vulnerabilities that persist. By modernizing electrical grids, integrating smart technologies, and diversifying energy sources, communities can enhance their capacity to withstand extreme weather events and ensure reliable electricity supply year-round.

Public Awareness and Preparedness

Public awareness and preparedness are essential components of mitigating the impact of electricity shut-offs during summer heatwaves. Educating residents about energy conservation practices, encouraging the use of programmable thermostats, and promoting the importance of emergency preparedness plans empower individuals and families to navigate heat emergencies safely and effectively.

Conclusion

As summer heatwaves become more frequent and intense due to climate change impacts on the grid, the risk of electricity shut-offs poses significant challenges to communities across the globe. By implementing proactive measures, enhancing infrastructure resilience, and fostering community collaboration, stakeholders can mitigate the impact of extreme heat events and ensure that all residents have access to safe and reliable electricity during the hottest months of the year.

Related News

• Electricity Forum News

• Grid Technologies News

Hydro One Q2 Earnings show lower net income and EPS as mild weather curbed electricity demand; revenue missed Refinitiv estimates, while tree-trimming costs rose and the dividend remained unchanged for Ontario's grid operator.

Key Points

Hydro One Q2 earnings fell to $155M, EPS $0.26, revenue $1.41B; costs rose, demand eased, dividend held at $0.2415.

✅ Net income $155M; EPS $0.26 vs $0.34 prior year

✅ Revenue $1.41B; missed $1.44B estimate

✅ Dividend steady at $0.2415 per share

Hydro One Ltd.'s (H.TO 0.25%) second-quarter profit fell by nearly 23 per cent from last year to $155 million as the electricity utility reported spending more on tree-trimming work due to milder temperatures that also saw customers using less power, notwithstanding other periods where a one-time court ruling gain shaped quarterly results.

The Toronto-based company - which operates most of Ontario's power grid - and whose regulated rates are subject to an OEB decision, says its net earnings attributable to shareholders dropped to 26 cents per share from 34 cents per share when Hydro One had $200 million in net income.

Adjusted net income was also 26 cents per share, down from 33 cents per diluted share in the second quarter of 2018, while executive pay, including the CEO salary, drew public scrutiny during the period.

Revenue was $1.41 billion, down from $1.48 billion, while revenue net of purchased power was $760 million, down from $803 million, and across the sector, Manitoba Hydro's debt has surged as well.

Separately, Ontario introduced a subsidized hydro plan and tax breaks to support economic recovery from COVID-19, which could influence consumption patterns.

Analysts had estimated $1.44 billion of revenue and 27 cents per share of adjusted income, and some investors cite too many unknowns in evaluating the stock, according to financial markets data firm Refinitiv.

The publicly traded company, which saw a share-price drop after leadership changes and of which the Ontario government is the largest shareholder, says its quarterly dividend will remain at 24.15 cents per share for its next payment to shareholders in September.

Related News

• Electricity Forum News

• T&D Business News

COVID-19 Impact on U.S. Electricity Consumption shows commercial and industrial demand dropped as residential use rose, with flattened peak loads, weekday-weekend convergence, Texas hourly data, and energy demand as a real-time economic indicator.

Key Points

It reduced commercial and industrial demand while raising residential use, shifting peaks and weekday patterns.

✅ Commercial electricity down 12%; industrial down 14% in Q2 2020

✅ Residential use up 10% amid work-from-home and lockdowns

✅ Peaks flattened; weekday-weekend loads converged in Texas

This is an important turning point for the United States. We have a long road ahead. But one of the reasons I’m optimistic about Biden-Harris is that we will once again have an administration that believes in science.

To embrace this return to science, I want to write today about a fascinating new working paper by Tufts economist Steve Cicala.

Professor Cicala has been studying the effect of Covid on electricity consumption since back in March, when the Wall Street Journal picked up his work documenting an 18% decrease in electricity consumption in Italy.

The new work, focused on the United States, is particularly compelling because it uses data that allows him to distinguish between residential, commercial, and industrial sectors, against a backdrop of declining U.S. electricity sales over recent years.

Without further ado, here are four facts he uncovers about Covid and U.S. electricity demand during COVID-19 and consumption.

Fact #1: Firms Are Using Less
U.S. commercial electricity consumption fell 12% during the second quarter of 2020. U.S. industrial electricity consumption fell 14% over the same period.

This makes sense. The second quarter was by some measures, the worst quarter for the U.S. economy in over 145 years!

Economic activity shrank. Schools closed. Offices closed. Factories closed. Restaurants closed. Malls closed. Even health care offices closed as patients delayed going to the dentist and other routine care. All this means less heating and cooling, less lighting, less refrigeration, less power for computers and other office equipment, less everything.

The decrease in the industrial sector is a little more surprising. My impression had been that the industrial sector had not fallen as far as commercial, but amid broader disruptions in coal and nuclear power that strained parts of the energy economy, the patterns for both sectors are quite similar with the decline peaking in May and then partially rebounding by July. The paper also shows that areas with higher unemployment rates experienced larger declines in both sectors.

Fact #2: Households Are Using More
While firms are using less, households are using more. U.S. residential electricity consumption increased 10% during the second quarter of 2020. Consumption surged during March, April, and May, a reflection of the lockdown lifestyle many adopted, and then leveled off in June and July – with much less of the rebound observed on the commercial/industrial side.

This pattern makes sense, too. In Professor Cicala’s words, “people are spending an inordinate amount of time at home”. Many of us switched over to working from home almost immediately, and haven’t looked back. This means more air conditioning, more running the dishwasher, more CNN (especially last week), more Zoom, and so on.

The paper also examines the correlates of the decline. Areas in the U.S. where more people can work from home experienced larger increases. Unemployment rates, however, are almost completely uncorrelated with the increase.

Fact #3: Firms are Less Peaky
The paper next turns to a novel dataset from Texas, where Texas grid reliability is under active discussion, that makes it possible to measure hourly electricity consumption by sector.

As the figure above illustrates, the biggest declines in commercial/industrial electricity consumption have occurred Monday through Friday between 9AM and 5PM.

The dashed line shows the pattern during 2019. Notice the large spikes in electricity consumption during business hours. The solid line shows the pattern during 2020. Much smaller spikes during business hours.

Fact #4: Everyday is Like Sunday
Finally, we have what I would like to nominate as the “Energy Figure of the Year”.

Again, start with the pattern for 2019, reflected by the dashed line. Prior to Covid, Texas households used a lot more electricity on Saturdays and Sundays.

Then along comes Covid, and turned every day into the weekend. Residential electricity consumption in Texas during business hours Monday-Friday is up 16%(!).

In the pattern for 2020, it isn’t easy to distinguish weekends from weekdays. If you feel like weekdays and weekends are becoming a big blur – you are not alone.

Conclusion
Researchers are increasingly thinking about electricity consumption as a real-time indicator of economic activity, even as flat electricity demand complicates utility planning and investment. This is an intriguing idea, but Professor Cicala’s new paper shows that it is important to look sector-by-sector.

While commercial and industrial consumption indeed seem to measure the strength of an economy, residential consumption has been sharply countercylical – increasing exactly when people are not at work and not at school.

These large changes in behavior are specific to the pandemic. Still, with the increased blurring of home and non-home activities we may look back on 2020 as a key turning point in how we think about these three sectors of the economy.

More broadly, Professor Cicala’s paper highlights the value of social science research. We need facts, data, and yes, science, if we are to understand the economy and craft effective policies on energy insecurity and shut-offs as well.

Related News

• Electricity Forum News

• Energy Policy News

COVID-19 Impact on U.S. Wind Industry: disrupting wind power projects, tax credits, and construction timelines, risking rural revenues, jobs, and $35B investments; AWEA seeks Congressional flexibility as OEM shutdowns like Siemens Gamesa intensify delays.

Key Points

Pandemic disruptions threaten 25 GW of projects, $35B investment, rural revenues, jobs, and tax-credit timelines.

✅ 25 GW at risk; $35B investment jeopardized

✅ Rural taxes and land-lease payments may drop $8B

✅ AWEA seeks Congressional flexibility on tax-credit deadlines

In one of the latest examples of the havoc that the novel coronavirus is wreaking on the U.S. economy and the crisis hitting solar and wind sector alike, the American Wind Energy Association (AWEA) -- the national trade association for the U.S. wind industry -- yesterday stated its concerns that COVID-19 will "pose significant challenges to the American wind power industry." According to AWEA's calculations, the disease is jeopardizing the development of approximately 25 gigawatts of wind projects, representing $35 billion in investments, even as wind additions persist in some markets amid the pandemic.

Rural communities, where about 99% of wind projects are located, in particular, face considerable risk. The AWEA estimates that rural communities stand to lose about $8 billion in state and local tax payments and land-lease payments to private landowners. In addition, it's estimated that the pandemic threatens the loss of over 35,000 jobs, and the U.S. wind jobs outlook underscores the stakes, including wind turbine technicians, construction workers, and factory workers.

The development of wind projects is heavily reliant on the earning of tax credits, and debates over a Solar ITC extension highlight potential impacts on wind. However, in order to qualify for the current credits, project developers are bound to begin construction before Dec. 31, 2020. With local and state governments implementing various measures to stop the spread of the virus, the success of project developers' meeting this deadline is dubious, as utility-scale solar construction slows nationwide due to COVID-19. Addressing this and other challenges, the AWEA is turning to the government for help. In the trade association's press release, it states that "to protect the industry and these workers, AWEA is asking Congress for flexibility in allowing existing policies to continue working for the industry through this period of uncertainty."

Illustrating one of the ways in which COVID-19 is affecting the industry, Siemens Gamesa, a global leader in the manufacturing of wind turbines, closed a second Spanish factory this week after learning that a second of its employees had tested positive for the novel coronavirus.

Related News

• Electricity Forum News

• Renewable Energy News

Germany's Economic Downturn reflects an energy crisis, deindustrialization risks, export weakness, and manufacturing stress, amid Russia gas loss, IMF and EU recession forecasts, and debates over electricity price caps and green transition.

Key Points

An economic contraction from energy price shocks, export weakness, and bottlenecks in manufacturing and digitization.

✅ Energy shock after loss of cheap Russian gas

✅ Exports slump amid China slowdown and weak demand

✅ Policy gridlock on power price cap and permits

Germany went from envy of the world to the worst-performing major developed economy. What happened?

For most of this century, Germany racked up one economic success after another, dominating global markets for high-end products like luxury cars and industrial machinery, selling so much to the rest of the world that half the economy ran on exports.

Jobs were plentiful, the government’s financial coffers grew as other European countries drowned in debt, and books were written about what other countries could learn from Germany.

No longer. Now, Germany is the world’s worst-performing major developed economy, with both the International Monetary Fund and European Union expecting it to shrink this year.

It follows Russia’s invasion of Ukraine and the loss of Moscow’s cheap Russian gas that underpinned industry — an unprecedented shock to Germany’s energy-intensive industries, long the manufacturing powerhouse of Europe.

The sudden underperformance by Europe’s largest economy has set off a wave of criticism, handwringing and debate about the way forward.

Germany risks “deindustrialization” as high energy costs and government inaction on other chronic problems threaten to send new factories and high-paying jobs elsewhere, said Christian Kullmann, CEO of major German chemical company Evonik Industries AG.

From his 21st-floor office in the west German town of Essen, Kullmann points out the symbols of earlier success across the historic Ruhr Valley industrial region: smokestacks from metal plants, giant heaps of waste from now-shuttered coal mines, a massive BP oil refinery and Evonik’s sprawling chemical production facility.

These days, the former mining region, where coal dust once blackened hanging laundry, is a symbol of the energy transition, as the power sector’s balancing act continues with wind turbines and green space.

The loss of cheap Russian natural gas needed to power factories “painfully damaged the business model of the German economy,” Kullmann told The Associated Press. “We’re in a situation where we’re being strongly affected — damaged — by external factors.”

After Russia cut off most of its gas to the European Union, spurring an energy crisis in the 27-nation bloc that had sourced 40% of the fuel from Moscow, the German government asked Evonik to turn to coal by keeping its 1960s coal-fired power plant running a few months longer.

The company is shifting away from the plant — whose 40-story smokestack fuels production of plastics and other goods — to two gas-fired generators that can later run on hydrogen amid plans to become carbon neutral by 2030 and following the nuclear phase-out of recent years.

One hotly debated solution: a government-funded cap on industrial electricity prices to get the economy through the renewable energy transition, amid an energy crisis that even saw a temporary nuclear extension to stabilize supply.

The proposal from Vice Chancellor Robert Habeck of the Greens Party has faced resistance from Chancellor Olaf Scholz, a Social Democrat, and pro-business coalition partner the Free Democrats. Environmentalists say it would only prolong reliance on fossil fuels, while others advocate a nuclear option to meet climate goals.

Kullmann is for it: “It was mistaken political decisions that primarily developed and influenced these high energy costs. And it can’t now be that German industry, German workers should be stuck with the bill.”

The price of gas is roughly double what it was in 2021, with a senior official arguing nuclear would do little to solve that gas issue, hurting companies that need it to keep glass or metal red-hot and molten 24 hours a day to make glass, paper and metal coatings used in buildings and cars.

A second blow came as key trade partner China experiences a slowdown after several decades of strong economic growth.

These outside shocks have exposed cracks in Germany’s foundation that were ignored during years of success, including lagging use of digital technology in government and business and a lengthy process to get badly needed renewable energy projects approved.

Related News

• Electricity Forum News

• Power Generation News