There is a lot of discussion and debate about electricity bills and it has become a top-of-mind issue for Ontarians.
What the discussion is often missing is a focus on real solutions to ensure a long-term supply of low-cost electricity, which is critical to our families, businesses and communities. Solutions are what the people at Bruce Power are focused on every day, and what our role in Ontario’s Long-Term Energy Plan (LTEP) is all about. However, when putting these issues in perspective, it’s important we look at this through the eyes of the customer and their electricity bill. Bruce Power is part of this solution.
There are three elements to an electricity bill – distribution and transmissions charges, regulatory charges and the electricity itself. Generally, the cost of electricity – the power we use – represents about half of the bill. The average cost of electricity on household bills in 2016 was 11 cents per kilowatt-hour (kWh). For Bruce Power, as an electricity generator, the test in terms of being low-cost is very simple – how much do we sell our electricity for compared to this average price and other sources? This is measured and published by the Ontario Energy Board (OEB).
In 2016, as recorded by the OEB, the team at Bruce Power provided all of our electricity to the system at 6.6 cents per kWh compared to solar (48 cents), natural gas (17 cents), wind (14 cents) and hydro (about 6 cents). Simply put, Bruce Power generates 30 per cent of Ontario’s electricity at 30 per cent less than the average residential price. That’s a role we play today and will for many years to come.
This is also why leading organizations who are advocates for low-cost electricity, such as the Ontario Chamber of Commerce and the Canadian Manufacturers and Exporters, supported our ongoing role in Ontario’s LTEP during the consultation process last year.
There is also considerable customer focus on cap and trade (carbon pricing) and what it means for electricity bills going forward. Ontario’s cap and trade program, which came into effect this year, is designed to help fight climate change and reward businesses that reduce their greenhouse gas emissions. According to a report released by the Asthma Society of Canada, ratepayers will also benefit from the avoided cap and trade costs by using clean, carbon-free nuclear. Between 2017 and 2064 (Bruce Power’s end-of-life), emissions-free nuclear will avoid between $12 billion and $63 billion in carbon costs that ratepayers would otherwise have to fund, if the same output was replaced by fossil fuels. Delivering Bruce Power’s role in the LTEP will mean lower costs for customers under cap and trade and also cleaner air.
We will generate low-cost power that our families and businesses can count on today and tomorrow, while continuing to deliver on our Life-Extension Program to operate until 2064. The life extension, which commenced on Jan. 1, 2016, remains on time and on budget.
The low-cost workhorse of our electricity system is nuclear and hydro generation. This will be essential to maintain through market stability and effective long-term mechanisms such as the one the province has in place with Bruce Power for this essential, low-cost, baseload power. As a private sector company, we are responsible for delivering this program, meeting all investment needs and taking the risk if cost-over runs occur.
While delivering on our commitment, we will secure 22,000 jobs in communities across Ontario through hundreds of firms that support our operations, while creating economic development opportunities in rural areas such as Bruce, Grey and Huron counties, and beyond. Bruce Power nuclear is reinvigorating Ontario-based industries, adding employees, and forging new export opportunities, all while keeping the cost of our electricity comparatively low.
This will benefit our communities and economy, and allow us to deliver this role effectively using the strength of our greatest asset – the people of Ontario.
Mike Rencheck is Bruce Power’s President and Chief Executive Officer.