Bruce Power pays to get rid of electricity; ENERGY: Low demand sometimes reverses spot market;

Owen Sound Sun Times: SCOTT DUNN - April 21, 2009

Electricity demand has declined by so much during Ontario's manufacturing slump that a few times this year generators, including Bruce Power, have had to pay to get rid of their surplus electricity.

"That's happened a few times so far this year," Bruce Power spokesman John Peevers said Monday. He wouldn't say how much it cost the company.

The relatively mild winter, along with reduced demand for electricity from Ontario's shrinking manufacturing sector, has triggered rarely seen "negative charges," he said.

Peevers said Bruce A's power is sold under contract to the Ontario Power Authority and hasn't been impacted by negative pricing.

But Bruce B power is sold both under contract and on the spot market, which is why Bruce B reactors were adjusted to send less power to the provincial grid.

The Ontario Clean Air Alliance issued a news release Monday which noted Ontario's wholesale spot market electricity price was negative for 214 hours -- equal to almost nine days -- between March 24 and April 19. The average negative price was approximately -1 cent per kWh; however prices fell to -5.1 cents per kWh on March 29.

"We believe that the market is sending a very clear signal to Energy Minister George Smitherman that demand for electricity in Ontario is falling and that we have more base load nuclear electricity than we need, and therefore he shouldn't sign a contract in June for the construction of two new nuclear reactors," Clean Air Alliance chairman Jack Gibbons said.

The alliance favours eliminating all nuclear power from Ontario's grid by 2027 and instead using renewable types of generation, combined with conservation.

Negative prices for power occur when electricity supply exceeds demand, said Terry Young, spokesman for the Independent Electricity System Operator. During those times, generators are charged a price set in a bidding process among them. The generators bid how much they're willing to pay to get rid of their surplus power, Young said.

Large electricity consumers benefit from these spot market price wars by receiving credits on their power bills.

Negative prices are uncommon but they have been seen in years past and may happen again next fall, when demand for electricity typically drops. The IESO has forecast electricity demand will fall by 1.6 per cent this year, and another two per cent next year, even though the province recently improved its ability to sell power in the United States.

Bruce Power's president and chief executive officer, Duncan Hawthorne, said last month that the province's manufacturing sector has cut is demand by 400 to 500 MW, demand that "may not come back."

Negative prices don't affect Glen Estill, president of Sky Generation, which operates three wind turbines at Ferndale on the Bruce Peninsula, and six more in the Ipperwash area. He sells his wind under contract, not in the spot electricity market.

He sees lots of new nuclear power coming that may not be needed.

The province is expected to spend $26 billion by one estimate on new nuclear reactors at the Darlington Nuclear Station, owned by Ontario Power Generation. The provincial government is expected to sign a contract in June to build them.

Bruce Power's units 1 and 2 at Bruce A are expected to return to service next year, bringing another 1,500 MW of electricity to the grid.

But power demand has fallen for three consecutive years.

"I really think you have to look hard at whether or not we want to take the financial risk involved in another new nuclear build," Estill said.

Conservation initiatives are going to pay increasing dividends. Rebates on certain refrigerators should reduce power demanded by those appliances by 30 per cent, for example.

Yet the province is about to sign contracts for new nuclear reactors, he said. "I think it certainly calls into question whether or not that's needed."

Peevers confirmed the drop in electricity demand won't stop the company's plans to finish refurbishing Bruce A's reactors. The company is also in the process of deciding whether to refurbish Bruce B's four reactors, build new ones or do some combination of both.

"We know the economy runs in cycles and the current downturn will not last forever and we must continue to plan for the long-term," Peevers said.

"We are still several years out from putting a shovel in the ground and treat our environmental assessments as planning tools to help us decide whether new build is appropriate."

Peevers also confirmed Unit 8 at Bruce Power generating station B was shut down late Sunday for a planned maintenance outage which will last about two months.

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