Foreword

Maintaining a clean, modern and reliable electricity system for all Ontarians is this government’s number one energy priority. Ontario families, businesses and the economy rely on the efficiency, dependability and environmental sustainability of electric power. We have to keep the lights on in Ontario homes, schools, hospitals and businesses and power everything from the coffee-maker to the CT scanner. We also need a clean system that won’t threaten the health of current and future generations.

Ontarians deserve balanced, responsible long-term energy planning for electricity to ensure that Ontario has clean air, reliable energy and a strong economy for our children and grandchildren. This report represents an update to the McGuinty government’s long-term energy plan and outlines how we are helping families and businesses with increasing electricity costs.

Prior to 2003, Ontario’s electricity system was weakening and unreliable. Our reliance on coal meant that our electricity sources were polluting and dirty. Between 1995 and 2003, the electricity system lost 1,800 megawatts (MW) of power - the equivalent of Niagara Falls running dry. A brief deregulated pricing experiment in 2002 resulted in sharply increased prices, prompting the government of the time to freeze consumer prices. Energy infrastructure was crumbling, a shortage of supply caused risks of brownouts.

Worst of all, Ontario relied heavily on five air-polluting coal plants. This wasn’t just polluting our air, it was polluting our lungs. Doctors, nurses and researchers stated categorically that coal generation was having an impact on health increasing the incidence of various respiratory illnesses. A 2005 study prepared for the government found that the average annual health-related damages due to coal could top $3 billion. For the sake of our well-being, and our children’s well-being, we had to put a stop to coal.

Over the past seven years, the McGuinty government has made tremendous progress after inheriting a system with reduced supply and little planning for the future. Today, our system is cleaner, more modern, more reliable and we plan ahead.

The McGuinty government has made electricity cleaner: we are on track to eliminate coal by 2014, the single largest climate change initiative in North America in that timeframe. We have already reduced the use of coal by 70 per cent. Last year our greenhouse gas emissions from the electricity sector reached the lowest they have been in 45 years. In 2009, more than 80 per cent of our generation came from emissions-free sources like wind, water, solar, biogas and nuclear.

Conservation efforts have been working - many Ontario families and businesses are becoming very active energy conservers. Through various programs, Ontarians have conserved more than 1,700 MW of electricity since 2005 - the equivalent of more than half a million homes being taken off the grid.

Today we have enough electricity to power our homes, businesses, schools and hospitals. Our government has increased Ontario’s energy capacity by adding over 20 per cent (more than 8,000 MW) of new supply to the system – enough to power two million homes. Investments in Ontario are transforming the electricity system and have helped to make Ontario a leading jurisdiction in North America for renewable and reliable energy. And since 2007, we’ve used a formal 20-year planning process to help us forecast and meet the province’s electricity needs.

Ontario’s electricity system is more reliable. Investments in new generation and upgrades to 5,000 kilometres of our transmission and distribution lines - about the width of Canada from coast to coast - have ensured that our electricity system is able to manage peak and sudden swings in demand and supply availability.

We are moving toward a modern, smart electricity system that will help consumers have greater control over their energy usage - even when they’re not at home. A smart grid can isolate outages allowing for faster or even automated repair. This will improve overall reliability for all electricity consumers and make it easier for consumers to produce their own power.

As part of the Open Ontario plan, the McGuinty government is moving Ontario from dirty coal dependency to a clean, modern and reliable energy economy that creates jobs. Energy is one of the engines of our economy and employs more than 95,000 Ontarians. Recent investments to modernize the system are helping to create and support jobs and opportunities for people and communities across the province. Ontario’s landmark Green Energy and Green Economy Act, 2009 is projected over three years to support over 50,000 direct and indirect jobs in smart grid and transmission and distribution upgrades, renewable energy and conservation.

We’ve accomplished a great deal in the past seven years, but there is more to do. Ontario has sufficient electricity supply - but we will require more clean power for the future. As Ontario’s energy infrastructure ages, we will need to rebuild or create another 15,000 MW of generating capacity over the next 20 years. We will also need to continue to upgrade and update transmission and distribution lines.

While we are proud of our collective efforts so far, we must continue to develop cleaner forms of electricity and foster a conservation-oriented culture. We need to have a balanced low-carbon supply mix to meet energy needs cleanly and reliably - Ontario will be ready for when North America moves to greenhouse gas regulation. We also need to maximize the electricity assets we have and ensure that those assets continue to provide clean, reliable supply.

The necessary, unavoidable investments that Ontario has been making in our electricity system are paid by ratepayers. The cost to bring our system back up to date and build a clean energy economy is having an impact on household and business bills.

We are all paying for previous decades of neglect. In Ontario, in order to have clean air, reliable generation and modernized transmission, residential prices over the next 20 years are expected to increase by about 3.5 per cent per year.

Increases to electricity bills are not easy for Ontario families and businesses. Even though Ontarians are committed to clean air, every increase takes a bite out of take-home income, and that is difficult for families during lean times. To help with rising costs, the McGuinty government has created a number of tax credits for families and seniors to help manage electricity increases. But we need to do more.

In this Plan, and the government’s 2010 Economic Outlook and Fiscal Review we have taken steps to ensure that we help families and businesses with electricity costs while investment in clean energy continues. On November 18, 2010, the McGuinty government introduced the Ontario Clean Energy Benefit.

If passed, the Ontario Clean Energy Benefit will give Ontario families, farms and small businesses a 10 per cent benefit on their bills for five years. That would be 10 per cent off your electricity bill every month, effective January 1, 2011.

The proposed Clean Energy Benefit will help families, hard-working small business owners and Ontario farms. The McGuinty government is doing this to help those who are feeling the pinch of the rising cost of living and especially, rising electricity prices. Every little bit helps during lean economic times.

This balanced and responsible Plan sets out Ontario’s expected electricity needs and the most efficient ways to meet them.

The Honourable Brad Duguid
Minister of Energy