At the Venture 13 grand opening on May 17, 2018, Dereck Paul, President & CEO of Lakefront Utility Services Inc (LUSI) announced that Solar panels would be installed on the roof of the Venture 13 building and would save approx. a third of its hydro costs. At last week’s council meeting he presented additional information. A key thing is that it’s not just LUSI involved but a consortium of LUSI, Veridian and Solera. And LUSI does not distribute Hydro – that’s a sister company: Lakefront Utilities Inc. The mandate of LUSI includes providing broadband to business as they will do for Venture 13, to manage the water supply for 4 municipalities and to expand their business (see the full presentation for more details – see Links below)
The organization is certainly not clear from the Lakeshore Utilities web site so let me first use Dereck’s information to clarify that.
LUSI Organization
- LUSI is a subsidiary of the Town of Cobourg Holdings Inc. (Holdco) and a sister company of the electricity distributor (Lakefront Utilities Inc.)
- LUSI is the non-regulated services company which includes 3 divisions — Water, Fibre Optic and Generation Services.
- LUSI manages the water systems for 4 municipalities: Town of Cobourg, Township of Cramahe, Haldimand Township and a portion of Hamilton Township.
- Owns and operates a fibre optic broadband network in Cobourg.
- Strategic mandate to expand non-regulated, but core, business in generation, community power and broadband.
So LUSI is free to work like a private company and does so in forming a partnership with Veridian and Solera.
Partnership
Veridian is an Electric utility for 9 municipalities; Pickering to Belleville to Gravenhurst and including Port Hope. They already own and operate roof-top solar installations under FIT (Ontario’s Feed-in Tariff program – that is, it pays for Solar power generated and connects it to the grid).
Solera (Full name Solera Sustainable Energies Company Limited) is a provider of Solar Panels for these kinds of applications.
The three entities have formed a partnership with 42.5% owned by LUSI, 42.5% owned by Veridian and 15% owned by Solera.
They plan to put 380 solar panels on the roof with 123KW generation capacity. This would produce 147,000 kWH annual generation.
Based on historical data supplied by the Town, the building consumed annual average electricity of 476,000 kWh and the rooftop solar panels will provide about 30% of that annual requirement.
Paying for all this
The Town will be asked to sign an agreement to purchase this power with a 25 year contract. Three options are offered – fixed price or escalating over the 25 years. In all cases, there is a savings to the Town based on the assumption that the current rate of 18.1 Cents/kWH increases by 7% per annum.
In option one, the rate would stay at 24.5 Cents/kWH for 25 years so there is a loss for seven years; prices increase but the average savings per year over 25 years would be $19K.
Option 3 starts with the current rate (18.1 Cents/kWH) but escalates payments at 5%/year and has an average savings per year of only $5K.
Other benefits are quoted including being environmentally friendly and providing an image of leadership.
Council will be asked to approve option one and approve an agreement at the next Committee of the Whole Meeting on June 4. In all options, the Town makes no contribution to Capital or operating Cost – it just pays for electricity generated by the solar panel array.
The big unasked question: Who carries the risk that hydro prices do not go up at 7% for 25 years? If the price charged by the regulated utility LUI does not exceed 24.5 for many more years than assumed, then there is either no profit or a loss.
Links and Notes
- Venture 13 Solar Presentation
- Venture 13 Grand Opening
- Note re cost Escalation. If the cost of hydro to Venture 13 is now 18.1c/kWH/year and escalates at 7% per year, in 25 years it would be 98.2c/kWH/year. So hydro bills would go up by about 5 times. At an inflation rate of 2% (the Central Bank target rate), the cost of running any business would go up by only 1.64 times. With the options offered, there is only a cost benefit to the Town if hydro rates rise faster than 5%/year for 25 years.
Print Article:
First off I am not part of or a member of the CTA nor have I ever worked as a protected sole under a Union .
You seem to like Painting so many with the same old and worn out Brush of CTA or NIMBY as a basis for your responses get over it and accept peoples opinions and beliefs for what they are , The news article was on
CP 24 News Bell channel 503 but this is not something we don’t already know its been a Looser and costly to the Residents of Ont, since day one .
The idea of Green Energy is great but should should be to the Benefit of all the Citizens as it money from all our pockets to pay for this . It seems that OPG and the Province are in many cases paying 3 times more for product than they can sell it for or the benefits derived from it Once again some one in Provincial Govt. made a decision and is now admitting the error of their ways with out consequence .
The article was a hit on the Wynn Govt . agreeing to and paying out more for wind and Solar Power
per KWK way more than they charge the citizens for KWH . 3 times more , but the Residents of Ont. will be paying for that mistake for years to come .
People put in high paying jobs with obligations of Trust and accuracy should be personally held accountable
thats why they get the Big Bucks
The Ontario PC and NDP parties are alleging that if elected they will slash hydro rates. I wonder how this fits into the Venture 13 hydro agreement?
The Ontario Liberals know that cutting hydro rates is impossible due to their accumulated judgemental errors on the hydro file. I recall that hydro rates are scheduled to jump after the election to begin recovering the fake rate reduction Ontario taxpayers received in the last year.
JUST IN
The recent News release by the Province on Monday of information that all this wind and Solar Power is costing the Ontario Res.
millions of $$$$ there fore the High cost of Electricity . They have Proven it folks .
The folks at LUSI must get their news fro the local paper the Way Back Times .
Lol!
I see the CTA gang’s all here, seeing red when anyone mentions green.
Perpy, can you give us the link for that press release?
So we know that you just didn’t make this up too?
Thank you.
Walter, is it possible that you doubt that a major factor in Ontario’s high cost of electricity is the exorbitant amounts paid for “green” power?
No doubt mistakes have been made – even costly ones. This seems to be inevitable in such a drastic change in technology.
But!
Ontario has been among the global front-runners in bringing in low-carbon policies and incentives.
“Like other leading governments, it has used a mix of public policies and incentives to help accelerate the move to energy efficient buildings, smarter transportation, cleaner industries, and greener power. For example, by phasing out coal-based power, the province massively reduced greenhouse gas emissions and harmful air pollution — saving thousands of lives and billions of dollars in health costs.”
http://www.thestar.com/opinion/contributors/2018/05/29/carbon-taxes-are-a-key-policy-in-achieving-a-low-carbon-economy.html
From your comment I assume that you feel that making electricity unaffordable and putting our province deeply into debt was a good thing. As you may have guessed I do not!
I guess what really pi—- me of is that right now my average electricity charge before delivery, regulatory & HST is $0.085 kWh…while the Liberal Government of the last 15 years has been paying these solar and wind electricity generators at ridiculous high rates versus what they can sell the electricity for.
Now LUSI or some form of it wants to make money on the backs of the general public by the sounds of it or is the profit going into the slush fund that is not transparent to the people of Cobourg.
Things are actually far worse than you imply. The $0.085/kWh that you mentioned is for power that is available whenever you need it; the $0.181 is for power that is only available while the sun shines. In addition to paying exorbitant rates for interruptible power we also have to pay for backup generators to provide power at night and on cloudy days. Cobourg politicians should take a stand and refuse to be complicit in this absurdity!
Has anyone considered what an increase of 7%/year for 25 years means? Assuming that I haven’t made a mistake that is $0.983/kWh! If you thought that the last few years were bad these numbers mean that much worse is coming. Even assuming a 2%/year inflation rate (higher than recent official rates), the inflation adjusted rate will be real rate will be $0.61/kWh.
I’m still looking for Option “B”.
It’s not a big deal – if you really want to know what it is, click on the first link – the Venture 13 Solar presentation.
Thanks John, I figured it was somewhere in the middle, just wondered why you stated 3 options but only detailed 2 of them in your summary.
I guess this looks like a good deal, but it kinda reminds me of the sales pitch you get at your front door from some hydro or gas re-seller trying to sign you up long term deals for a few extra cents now. I, and I think most people, always shooed them away.