Elon Musk could help rebuild Puerto Rico with solar-powered electricity grid

Ontario COVID-19 Business Tax Relief outlines permanent Employer Health Tax exemptions, lower Business Education Tax rates, optional municipal property tax cuts, and hydro bill subsidies to support small businesses, industrial and commercial recovery.

Key Points

A provincial package of tax breaks and hydro subsidies to help small, industrial, and commercial businesses recover.

✅ Permanent Employer Health Tax exemption to $1M payroll

✅ Lower Business Education Tax rates for 94% of firms

✅ Hydro subsidies cut medium-large rates by 14-16%

The Ontario government's latest plan to help businesses survive and recover from the COVID-19 pandemic includes a suite of new tax breaks for small businesses and $1.3 billion to subsidize electricity bills for industrial and commercial operations.

The new measures were announced Thursday as part of Ontario's 2020 budget, which sets new provincial records for both spending and deficit projections.

The government of Premier Doug Ford says the budget will address barriers impeding long-term growth, ensuring the province forges a path to a full recovery from the pandemic.

"When the pandemic is over, Ontario will come back with a vengeance, stronger and more prosperous than ever before," Ford said at an afternoon news conference.

Small businesses with payrolls under $1 million will no longer have to pay the Employer Health Tax. The province temporarily raised the exemption from $490,000 to $1 million earlier this year, but the government is now making the change permanent.

The higher exemption means that about 90 per cent of Ontario businesses will no longer have to pay the tax, amounting to about $360 million by 2022, according to the province.

"We have heard from employers across Ontario that this measure helped them keep workers on the job during COVID-19," Finance Minister Rod Phillips told the legislature.

The 2020 budget lowers rates for the Business Education Tax (BET), a property tax earmarked for public education. More than 200,000 Ontario businesses, or 94 per cent, will see a lower rate.

"I believe this budget takes some significant initial steps to help stabilize the economy and help businesses, especially small businesses," said Toronto Mayor John Tory in a statement. Tory's office estimates that reductions to the BET will result in $117 million in lower taxes for commercial properties in Canada's largest city.

Municipal governments will also be permitted to reduce property taxes for small businesses, should they choose to do so. The province says it will "consider matching these reductions," which could amount to $385 million in tax relief by 2023.

Finance Minister Rod Phillips tabled the largest spending plan in Ontario history on Thursday afternoon. (Frank Gunn/The Canadian Press)
Municipalities currently have few options to provide targeted relief to local businesses. Guelph Mayor Cam Guthrie, chair of Ontario's Big City Mayors, said the prospect of lowering property taxes will likely be welcomed by local governments across the province.

"I really am looking forward to looking into that because it would give targeted relief to these businesses that have been asking for something from local governments for the past nine months," he said in an interview.

Tax cuts 'won't help a boarded up business,' NDP says
The 2020 budget does not contain any new direct funding for small businesses or their employees. NDP leader Andrea Horwath, who has proposed to make hydro public again, said those types of funding would help businesses more than potential tax reductions.

"A future hydro or tax cut won't help a boarded up business and it certainly won't help the folks that used to work there," Horwath said.

"Those measures are great if you're a company that's doing really well ... but let's face it, main streets across Ontario are crumbling."

Ontario did reveal on Thursday more details about a previously announced $300-million fund to support businesses in Toronto, Ottawa, Peel Region and York Region, which were placed under modified Stage 2 restrictions this fall. The money can be used to cover property taxes and energy bills for eligible businesses.

In a similar move, B.C. provided a three-month break on electricity bills for residents and businesses during the pandemic.

An undetermined amount of the $300 million will also be made available to businesses that are placed under "control" and "lockdown" rules, which are the two most severe restrictions in the province's updated reopening guidelines announced in October.

No regions are currently under these restrictions.

Elsewhere, B.C. saw commercial electricity consumption plummet during the COVID-19 pandemic.

Government to subsidize hydro bills for industrial businesses
The Ford government, which earlier oversaw a Hydro One leadership overhaul, is also taking aim at what it calls "job-killing electricity prices" in Ontario's industrial and commercial sectors.

The budget includes a $1.3 billion investment over three years to subsidize their hydro bills, a move praised by Canadian Manufacturers & Exporters as supportive of industry, which the province says have been inflated due to contracts signed by the previous Liberal government to purchase electricity generated by wind, solar and bioenergy.

"This is the legacy that is making our businesses uncompetitive," Phillips told reporters Thursday afternoon.

Ontario says its $1.3-billion investment to subsidize electricity bills will offset expensive contracts for green energy signed by the previous Liberal government. (Patrick Pleul/dpa via Associated Press)
The investment will lower rates for medium- and large-sized business by between 14 and 16 per cent, and follows an OEB decision on Hydro One rates that affects transmission and distribution costs, according to Ontario's calculations. Phillips said those rates will be among the lowest of any jurisdiction in the Great Lakes region.

The provincial government said the investment is necessary for Ontario to recover from the COVID-19 downturn. The Ford government expects that no further subsidies will be required by around 2040.

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Hydro One COVID-19 Rate Relief responds to time-of-use pricing, peak rates, and Ontario Energy Board rules as residents stay home, offering a Pandemic Relief Fund, flexible payments, and support for electricity bills amid off-peak adjustments.

Key Points

Hydro One's COVID-19 rate relief includes payment flexibility and hardship aid to ease time-of-use bill burdens.

✅ Advocates flexibility on time-of-use and peak rate impacts

✅ Pandemic Relief Fund offers aid and payment options

✅ OEB sets prices; utilities relay concerns and support

Hydro One says it is listening to requests by self-isolating residents for reduced kilowatt hour peak rates during the day when most people are home riding out the COVID-19 pandemic.

Peak rates of 20.8 cents per kw/h are twice as high from 7 a.m. to 7 p.m. – except weekends – than off-peak rates of 10.1 cents per kw/h and set by the Ontario Energy Board and not electricity providers such as Hydro One and Elexicon (formerly Veridian).

Frustrated electrical customers have signed their John Henry’s more than 50,000 times to a change.org petition demanding Hydro One temporarily slash rates for those already struggling with work closures and loss of income amid concerns about a potential recovery rate that could raise bills.

Alex Stewart, media relations spokesman for Hydro One, said the corporation is working toward a solution.

“While we are regulated to adhere to time-of-use pricing by the Ontario Energy Board, we’ve heard the concerns about time-of-use pricing and the idea of a fixed COVID-19 hydro rate as many of our customers will stay home to stop the spread of COVID-19,” Stewart told The Intelligencer.

“We continue to advocate for greater choice during this difficult time and are working with everyone in the electricity sector to ensure our customers are heard.”

Stewart said the electricity provider is reaching out to customers to help them during a difficult self-isolating and social distancing period in other ways to bring financial relief.

For example, new hardship measures are now in play by Hydro One to give customers some relief from ballooning electricity bills.

“This is a difficult time for everyone. Hydro One has launched a new Pandemic Relief Fund to support customers affected by the novel coronavirus COVID-19. As part of our commitment to customers, we will offer financial assistance, as well as increased payment flexibility, to customers experiencing hardship,” Stewart said.

“Hydro One is also extending its Winter Relief program to halt disconnections and reconnections to customers experiencing hardship during the coldest months of the year. This is about doing the right thing and offering flexibility to our customers so they have peace of mind and can concentrate on what matters most – keeping their loved ones safe.”

Stewart said customers having difficult times can visit the company’s website for more details at www.HydroOne.com/ReliefFund.

Elexicon Energy, meanwhile, said earlier the former Veridian company is passing along concerns to the OEB but otherwise can’t lower the rates unless directed to do so, as occurred when the province set off-peak pricing temporarily.

Chris Mace, Elexicon corporate communications spokesperson, said, “We don’t have the authority to do that.

“The Ontario Energy Board sets the energy prices. This is in the Ministry of Energy’s hands. We at Elexicon, along with other local distribution companies (LDC), have shared this feedback with the ministry and OEB to come up with some sort of solution or alternative. But this is out of our hands. We can’t shift anything.”

He suggested residents can shift the use of higher-drawing electrical appliances to early morning before 7 or in the evening after 7 p.m. when ultra-low overnight rates may apply.

Families may want to be “mindful whether it be cooking or laundry and so on and holding off on doing those until off-peak hours take effect. We are hearing customers and we have passed along those concerns to the ministry and the OEB.”

Hydro One power tips

Certain electrical uses in the home consumer more power than others, as reflected in Ontario’s electricity cost allocation approach:

62 per cent goes to space heating
19 per cent goes to water heaters
13 per cent goes to appliances
2 per cent goes to space cooling

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DOE RMUC Cybersecurity Program supports rural, municipal, and small investor-owned utilities with grants, technical assistance, grid resilience, incident response, workforce training, and threat intelligence sharing to harden energy systems and protect critical infrastructure.

Key Points

A $250M DOE program providing grants to boost rural and municipal utilities' cybersecurity and incident response.

✅ Grants and technical assistance for grid security

✅ Enhances incident response and threat intel sharing

✅ Builds cybersecurity workforce in rural utilities

The U.S. Department of Energy (DOE) today issued a Request for Information (RFI) seeking public input on a new $250 million program to strengthen the cybersecurity posture of rural, municipal, and small investor-owned electric utilities.

Funded by President Biden’s Bipartisan Infrastructure Law and broader clean energy funding initiatives, the Rural and Municipal Utility Advanced Cybersecurity Grant and Technical Assistance (RMUC) Program will help eligible utilities harden energy systems, processes, and assets; improve incident response capabilities; and increase cybersecurity skills in the utility workforce. Providing secure, reliable power to all Americans, with a focus on equity in electricity regulation across communities, will be a key focus on the pathway to achieving President Biden’s goal of a net-zero carbon economy by 2050. 

“Rural and municipal utilities provide power for a large portion of low- and moderate-income families across the nation and play a critical role in ensuring the economic security of our nation’s energy supply,” said U.S. Secretary of Energy Jennifer M. Granholm. “This new program reflects the Biden Administration's commitment to improving energy reliability and connecting our nation’s rural communities to resilient energy infrastructure and the transformative benefits that come with it.” 

Nearly one in six Americans live in a remote or rural community. Utilities in these communities face considerable obstacles, including difficulty recruiting top cybersecurity talent, inadequate infrastructure, as the aging U.S. power grid struggles to support new technologies, and lack of financial resources needed to modernize and harden their systems. 

The RMUC Program will provide financial and technical assistance to help rural, municipal, and small investor-owned electric utilities improve operational capabilities, increase access to cybersecurity services, deploy advanced cyber security technologies, and increase participation of eligible entities in cybersecurity threat information sharing programs and coordination with federal partners initiatives. Priority will be given to eligible utilities that have limited cybersecurity resources, are critical to the reliability of the bulk power system, or those that support our national defense infrastructure. 

The Office of Cybersecurity, Energy Security, and Emergency Response (CESER), which advances U.S. energy security objectives, will manage the RMUC Program, providing $250 million dollars in BIL funding over five years. To help inform Program implementation, DOE is seeking input from the cybersecurity community, including eligible utilities and representatives of third parties and organizations that support or interact with these utilities. The RFI seeks input on ways to improve cybersecurity incident preparedness, response, and threat information sharing; cybersecurity workforce challenges; risks associated with technologies deployed on the electric grid; national-scale initiatives to accelerate cybersecurity improvements in these utilities; opportunities to strengthen partnerships and energy security support efforts; the selection criteria and application process for funding awards; and more. 

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Hornsea One Offshore Wind Farm delivers first power to the UK grid, scaling renewable energy with 1.2GW capacity, giant offshore turbines, and Yorkshire coast infrastructure to replace delayed nuclear and cut fossil fuel emissions.

Key Points

Hornsea One Offshore Wind Farm is a 1.2GW UK project delivering offshore renewable power to about 1 million homes.

✅ 174 turbines over 407 km2; Siemens Gamesa supply chain in the UK

✅ 1.2GW capacity can power ~1m homes; phases scale with 10MW+ turbines

✅ Supports UK grid, replaces delayed nuclear, cuts fossil generation

An offshore windfarm on the Yorkshire coast that will dwarf the world’s largest when completed is to supply its first power to the UK electricity grid this week, mirroring advances in tidal electricity projects delivering to the grid as well.

The Danish developer Ørsted, which has installed the first of 174 turbines at Hornsea One, said it was ready to step up its plans and fill the gap left by failed nuclear power schemes.

The size of the project takes the burgeoning offshore wind power sector to a new scale, on a par with conventional fossil fuel-fired power stations.

Hornsea One will cover 407 square kilometres, five times the size of the nearby city of Hull. At 1.2GW of capacity it will power 1m homes, making it about twice as powerful as today’s biggest offshore windfarm once it is completed in the second half of this year.

“The ability to generate clean electricity offshore at this scale is a globally significant milestone at a time when urgent action needs to be taken to tackle climate change,” said Matthew Wright, UK managing director of Ørsted, the world’s biggest offshore windfarm builder.

The power station is only the first of four planned in the area, with a green light and subsidies already awarded to a second stage due for completion in the early 2020s, and interest from Japanese utilities underscoring growing investor appetite.

The first two phases will use 7MW turbines, which are taller than London’s Gherkin building.

But the latter stages of the Hornsea development could use even more powerful, 10MW-plus turbines. Bigger turbines will capture more of the energy from the wind and should lower costs by reducing the number of foundations and amount of cabling firms need to put into the water, with developers noting that offshore wind can compete with gas in the U.S. as costs fall.

Henrik Poulsen, Ørsted’s chief executive, said he was in close dialogue with major manufacturers to use the new generation of turbines, some of which are expected to approach the height of the Shard in London, the tallest building in the EU.

The UK has a great wind resource and shallow enough seabed to exploit it, and could even “power most of Europe if it [the UK] went to the extreme with offshore”, he said.

Offshore windfarms could help ministers fill the low carbon power gap created by Hitachi and Toshiba scrapping nuclear plants, the executive suggested. “If nuclear should play less of a role than expected, I believe offshore wind can step up,” he said.

New nuclear projects in Europe had been “dramatically delayed and over budget”, he added, in comparison to “the strong track record for delivering offshore [wind]”.

The UK and Germany installed 85% of new offshore wind power capacity in the EU last year, according to industry data, with wind leading power across several markets. The average power rating of the turbines is getting bigger too, up 15% in 2018.

The turbines for Hornsea One are built and shipped from Siemens Gamesa’s factory in Hull, part of a web of UK-based suppliers that has sprung up around the growing sector, such as Prysmian UK's land cables supporting grid connections.

Around half of the project’s transition pieces, the yellow part of the structure that connects the foundation to the tower, are made in Teeside. Many of the towers themselves are made by a firm in Campbeltown in the Scottish highlands. Altogether, about half of the components for the project are made in the UK.

Ørsted is not yet ready to bid for a share of a £60m pot of further offshore windfarm subsidies, to be auctioned by the government this summer, but expects the price to reach even more competitive levels than those seen in 2017.

Like other international energy companies, Ørsted has put in place contingency planning in event of a no-deal Brexit – but the hope is that will not come to pass. “We want a Brexit deal that will facilitate an orderly transition out of the union,” said Poulsen.

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Inventoried Energy Program pays ISO-NE generators for fuel security to boost winter reliability, with FERC approval, covering fossil, nuclear, hydropower, and batteries, complementing capacity markets to enhance grid resilience during severe cold snaps.

Key Points

ISO-NE program paying generators to hold fuel or energy reserves for emergencies, boosting winter reliability.

✅ FERC-approved stopgap for 2023 and 2024 winter seasons

✅ Pays for on-site fuel or stored energy during cold-trigger events

✅ Open to fossil, nuclear, hydro, batteries; limited gas participation

Electricity ratepayers in New England will pay tens of millions of dollars to fossil fuel and nuclear power plants later this decade under a program that proponents say is needed to keep the lights on during severe winters but which critics call a subsidy with little benefit to consumers or the grid, even as Connecticut is pushing a market overhaul across the region.

Last week the Federal Energy Regulatory Commission said ISO-New England, which runs the six-state power grid, can create what it calls the Inventoried Energy Program or IEP. This basically will pay certain power plants to stockpile of fuel for use in emergencies during two upcoming winters as longer-term solutions are developed.

The federal commission called it a reasonable short-term solution to avoid brownouts which doesn’t favor any given technology.

Not all agree, however, including FERC Commissioner Richard Glick, who wrote a fiery dissent to the other three commissioners.

“The program will hand out tens of millions of dollars to nuclear, coal and hydropower generators without any indication that those payments will cause the slightest change in those generators’ behavior,” Glick wrote. “Handing out money for nothing is a windfall, not a just and reasonable rate.”

The program is the latest reaction by ISO-NE to the winter of 2013-14 when New England almost saw brownouts because of a shortage of natural gas to create electricity during a pair of week-long deep freezes.

ISO-New England says the situation is more critical now because of the possible retirement of the gas-fired Mystic Generating Station in Massachusetts. As with closed nuclear plants such as Vermont Yankee and Pilgrim in Massachusetts, power plant owners say lower electricity prices, partly due to cheap renewables and partly to stagnant demand, means they can’t be profitable just by selling power.

Programs like the IEP are meant to subsidize such plants – “incentivize” is the industry term – even though some argue there is no need to subsidize nuclear in deregulated markets so they’ll stay open if they are needed.

The IEP approved last week will be applied to the winters of 2023 and 2024, after a different subsidy program expires. It sets prices, despite warnings about rushing pricing changes from industry groups, for stocking certain amounts of fuel and payments during any “trigger” event, defined as a day when the average of high and low temperatures at Bradley International Airport in Connecticut is no more than 17 degrees Fahrenheit.

These payments will be made on top of a complex system of grid auctions used to decide how much various plants get paid for generating electricity at which times.

ISO-NE estimates the new program will cost between $102 million and $148 million each winter, depending on weather and market conditions.

It says the payments are open to plants that burn oil, coal, nuclear fuel, wood chips or trash; utility-scale battery storage facilities; and hydropower dams “that store water in a pond or reservoir.” Natural gas plants can participate if they guarantee to have fuel available, but that seems less likely because of winter heating contracts.

A major complaint and groups that filed petitions opposing the project is that ISO-NE presented little supporting evidence of how prices, amount and overall cost were determined. ISO-NE argued that there wasn’t time for such analysis before the Mystic shutdown, and FERC agreed.

“The proposal is a step in the right direction … while ISO-NE finishes developing a long-term market solution,” the commission said in its ruling.

The program is the latest example of complexities facing the nation’s electricity system evolves in the face of solar and wind power, which produce electricity so cheaply that they can render traditional power uneconomic but which can’t always produce power on demand, prompting discussions of Texas grid improvements among policymakers. Another major factor is climate change, which has increased the pressure to support renewable alternatives to plants that burn fossil fuels, as well as stagnant electricity demand caused by increased efficiency.

Opponents, including many environmental groups, say electricity utilities and regulators are too quick to prop up existing systems, as the 145-mile Maine transmission line debate shows, built when electricity was sent one way from a few big plants to many customers. They argue that to combat climate change as well as limit cost, the emphasis must be on developing “non-wire alternatives” such as smart systems for controlling demand, in order to take advantage of the current system in which electricity goes two ways, such as from rooftop solar back into the grid.

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Heavy-Duty Truck Electrification is disrupting the aftermarket as diesel declines: fewer parts, regenerative braking, emissions rules, e-drives, gearboxes, and software engineering needs reshape service demand, while ICE fleets persist for years.

Key Points

Transition of heavy trucks to EV systems, reducing parts and emissions while reshaping aftermarket service and skills.

✅ 33% fewer parts; regenerative braking slashes brake wear

✅ Diesel share declines; EVs and natural gas slowly gain

✅ Aftermarket shifts to e-drives, gearboxes, software and service

Those who sell parts and repair trucks might feel uneasy when reports emerge about a coming generation of electric trucks.

There are reportedly about 33% fewer parts to consider when internal combustion engines and transmissions are replaced by electric motors. Features such as regenerative braking are expected to dramatically reduce brake wear. As for many of the fluids needed to keep components moving? They can remain in their tanks and drums.

Think of them as disruptors. But presenters during the annual Heavy Duty Aftermarket Dialogue are stressing that the changes are not coming overnight. Chris Patterson, a consultant and former Daimler Trucks North America CEO, noted that the Daimler electrification plan underscores the shift as he counts just 50 electrified heavy trucks in North America.

About 88% of today’s trucks run on diesel, with the remaining 12% mostly powered by gasoline, said John Blodgett, MacKay and Company’s vice-president of sales and marketing. Five years out, even amid talk of an EV inflection point, he expects 1% to be electric, 2% to be natural gas, 12% to be gasoline, and 84% on diesel.

But a decade from now, forecasts suggest a split of 76% diesel, 11% gasoline, 7% electric, and 5% natural gas, with a fraction of a percent relying on hydrogen-electric power. Existing internal combustion engines will still be in service, and need to be serviced, but aftermarket suppliers are now preparing for their roles in the mix, especially as Canada’s EV opportunity comes into focus for North American players.

“This is real, for sure,” said Delphi Technologies CEO Rick Dauch.

Aftermarket support is needed
“As programs are launched five to six years from now, what are the parts coming back?” he asked the crowd. “Braking and steering. The fuel injection business will go down, but not for 20-25 years.” The electric vehicles will also require a gear box and motor.

“You still have a business model,” he assured the crowd of aftermarket professionals.

Shifting emissions standards are largely responsible for the transformation that is occurring. In Europe, Volkswagen’s diesel emissions scandal and future emissions rules of Euro 7 will essentially sideline diesel-powered cars, even as electric buses have yet to take over transit systems. Delphi’s light-duty diesel business has dropped 70% in just five years, leading to plant closures in Spain, France and England.

“We’ve got a billion-dollar business in electrification, last year down $200 million because of the downturn in light-duty diesel controllers,” Dauch said. “We think we’re going to double our electrification business in five years.”

That has meant opening five new plants in Eastern European markets like Turkey, Romania and Poland alone.

Deciding when the market will emerge is no small task, however. One new plant in China offered manufacturing capacity in July 2019, but it has yet to make any electric vehicle parts, highlighting mainstream EV challenges tied to policy shifts, because the Chinese government changed the incentive plans for electric vehicles.

‘All in’ on electric vehicles
Dana has also gone “all in” on electrification, said chairman and CEO Jim Kamsickas, referring to Dana’s work on e-drives with Kenworth and Peterbilt. Its gasket business is focusing on the needs of battery cooling systems and enclosures.

But he also puts the demand for new electric vehicle systems in perspective. “The mechanical piece is still going to be there.”

The demand for the new components and systems, however, has both companies challenged to find enough capable software engineers. Delphi has 1,600 of them now, and it needs more.

“Just being a motor supplier, just being an inverter supplier, just being a gearbox supplier itself, yes you’ll get value out of that. But in the longhaul you’re going to need to have engineers,” Kamsickas said of the work to develop systems.

Dauch noted that Delphi will leave the capital-intensive work of producing batteries to other companies in markets like China and Korea. “We’re going to make the systems that are in between – inverters, chargers, battery management systems,” he said.

Difficult change
But people working for European companies that have been built around diesel components are facing difficult days. Dauch refers to one German village with a population of 1,200, about 800 of whom build diesel engine parts. That business is working furiously to shift to producing gasoline parts.

Electrification will face hurdles of its own, of course. Major cities around the world are looking to ban diesel-powered vehicles by 2050, but they still lack the infrastructure needed to charge all the cars and truck fleet charging at scale, he added.

Kamsickas welcomes the disruptive forces.

“This is great,” he said. “It’s making us all think a little differently. It’s just that business models have had to pivot – for you, for us, for everybody.”

They need to be balanced against other business demands, including evolving cross-border EV collaboration dynamics, too.

Said Kamsickas: “Working through the disruption of electrification, it’s how do you financially manage that? Oh, by the way, the last time I checked there are [company] shareholders and stakeholders you need to take care of.”

“It’s going to be tough,” Dauch agreed, referring to the changes for suppliers. “The next three to four years are really going to be game changes. “There’ll be some survivors and some losers, that’s for sure.”

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