Final Global Adjustment of 2013 is, appropriately, bad

The final global adjustment estimate of the year is now on the IESO's site, and it's not good.

I wrote on the Global Adjustment/Ontario Roulette earlier this month;
Currently, a customer who escaped November's record rates by getting the benefit of the $62.28 rate for most of the month will be looking at a December Global Adjustment rate of $78.55 - even though that's not a sane estimate for what would actually be reflective of costs incurred in December.

The second estimate for December is much lower than the first - from $78.55/MWh to $42.69 (46%).

I call that bad not only because different consumers may be paying far different prices for the same electricity depending on their billing date, but because the total dollar value of the December global adjustment is now estimated to be  $603 million (which is about what I expected).  If you divide $603 million by the estimate, $42.69, you would get 14,125,088 - which is for more electricity than Ontario will consume in December.

So it's a bad estimate because it doesn't make any sense.

My estimates are more complicated than that - accounting for class A customers I'd expect the final global adjustment for the month to be closer to $52/MWh - with a monthly HOEP averaging $31.15, that would be about the same Class B commodity rate as experienced in the summer, and as recently as October  - but steeply down from November's inexplicably high rate.

On the other hand, December 2012 also finished with an inexplicably low global adjustment.

Maybe the rate is dependent only on somebody's mood, and in December they feel like knocking off some of the price.

Comments

Post a Comment

Popular posts from this blog

Hurting Michigan

Image
Parker Gallant has called for the Ontario government to "shutdown the intertie line with Michigan" - in an article that notes some of my work. I feel I should offer some support as Michigan is being a lousy neighbour and it would feel therapeutic, if nothing else, to respond. I'll try to stick to data. The system operator in Ontario (IESO) data indicates the Michigan intertie is the most lucrative for exports - but that's not saying much: exports at that intertie were bought in Ontario for an average of just 1.2 cents/kWh ($12/MWh) in 2020 - but were in such high demand another 0.9 cents/kWh of congestion rent was paid. Over the past 5 years congestion rents comprise 46% of the revenue on the Michigan intertie. The IESO's insiders' committees are considering how much of  this revenue to share with the exporters instead allowing it to solely benefit internal Ontario consumers. Action #1: hell no. Issue a ministerial directive that congestion rents will only b...
Read more

Ontario's electricity system has not yet passed gas

Image
Ontario’s electricity system includes generators fueled by natural gas. This is suddenly a hot topic as a campaign lobbying councils to say no to this type of generation moves through municipalities. The “no gas” lobbying appeals to a desire to reduce greenhouse gas emissions, exploiting predictions of increased use of natural gas in generating electricity in the province. This article will explore what entities have been the key drivers of emissions in Ontario’s electricity system, the credibility of the body being cited predicting increased generation fueled by natural gas and, if all goes well, convince the reader they are not willing to decrease global carbon emissions at any cost. Background on the IESO’s pretend market My previous post reconstructed a method to estimate losses on electricity exports out of Ontario. The measure does not indicate Ontario would be better off if it didn’t export its excess, but that Ontario would be better off with data discipline and consistent me...
Read more