Coal, Emissions, O&M, Renewables

Closing Ontario’s coal plants may cost ratepayers more than $1 billion, report states

Oct. 28, 2003 — Ontario’s new government has promised to replace the Canadian province’s five coal-burning plants with plants that use cleaner sources of energy, such as natural gas, hydroelectric power, wind and landfill methane.

Now a report released by Dominion Bond Rating Service warns that the switch could increase annual costs to electricity consumers by (Can) $900 million to $1.2 billion. Ontarians are currently paying $300 to $500 million per year in electricity rates, the Ottawa Sun reported.

According to the report, operations and maintenance costs for coal-fired generation are about 3 cents/kWh. Natural gas plants built to replace the coal plants could cost 5-6 cents/kWh.

The coal plants currently provide about 25 percent of Ontario’s electricity, according to the London Free Press newspaper.

The new government has attempted to soften the blow by capping residential power prices at 4.3 cents/kWh until 2006.

The Ontario Clean Air Alliance, a group working to improve air quality in the province, is disputing Dominion Bond Rating Service’s cost estimate, saying the increase won’t be more than 3-5 %, the Ottowa Sun reported.

Canada is under pressure to replace the coal plants by 2007 because of the recent signing of the Kyoto Climate Control agreement.

To learn more, visit the web site of Dominion Bond Rating Service at http://www.dbrs.com/web/sentry?COMP=100.