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Commercial Energy Solutions OWE JAN 2018 V1

WHO IS ONTARIO WHOLESALE ENERGY? Boutique Energy Retailer

We are a boutique Natural Gas and Electricity retailer / supplier that provides price stability, leveraged index and structured physical products to mid-size and large commercial consumers in Ontario.

Experience

With a combined 65+ years of industry experience, we are able to keep the operation highly automated and very lean, which allows us to pass off extremely competitive prices to you, our customer.

Positive Growth

With over 10,000 customers and growing, we have cemented our reputation as the premiere choice for 100% LOAD FOLLOWING natural gas, electricity and energy conservation products.

WorldWide Energy Partner

Our major energy trading partner is Shell Energy North America.

Service Excellence

Please rate our service excellence today, whether you enroll with us or not.

1

OWE CLIENT OVERVIEW

Grocers

Restaurants

oblaws, L No Frills, Bulk Food Stores, Little Euro Deli

im Hortons, Harvey’s T Swiss Chalet, Moxie’s, Dairy Queen, Pizza Pizza, Boston Pizza, Popeyes, McDonald’s, Pizza Hut, Joes Family Pizzaria, Main St Cafe, Sunset Grill, Brasserie Etienne Brule Brewery

25+

1000+

Manufacturers 100+

Property Managers

Automotive, Plastics, Tool & Die, Canadian Woodworking, Kains Welding

50+

Holiday Inn, Hotels, Motels, Office Buildings, Retirement Homes, Condo Associations, Apartment Blocks, Balmoral Hotel, Boston Tea Bed & Breakfast, Spectacle Lake Lodge, Pine Motel

Convenience Stores 100+

Mac’s, 7-11, Yates General Store

Professionals 100+

rchitects, Doctors, A Dentists, Clinics, Funeral Homes

Automotive 300+

idas, Body Shops, M Smart Auto Car, Cobden Auto Supply , D&D Auto,

Please Note : Specific customers are not to be contacted without approved third party reference letter provided as per Privacy Regulations.

Commercial Energy Solutions

2

ONTARIO: FACT #1

Population Increases by 132,000 year over year

By John Huang

Updated Jan 2018

POPULATIONS Statistics Canada reports that Ontario’s net population has increased by 528,600 persons or 3.99% since 2011.

The average year over year increase is 132,150 persons per year.

As Ontario’s economy posts impressive growth, the province continues to attract immigration. Growth in industry creates jobs at a faster rate than natural births.

THE HUFFINGTON POST

ECONOMIC GROWTH The population growth is a welcome sign to the Retail Construction industry as well, as it continues to fuel the construction of new residential housing.

CANADA

Canada 2016 Census Data: Canada Is The Fastest Growing Country In G7 CP | By Jordan Press, The Canadian Press

Posted: 02/08/2017 9:33 am EST Updated: 2 minutes ago

The latest figures also show that the once yawning gulf in growth rates between the spreading suburbs and their urban centres has continued to narrow, with young professionals and aging baby boomers alike opting for the downtown-condominium life.

OTTAWA — Colin Basram is having growing pains.

Ontario Population Growth 13.9M

In some ways a victim of his own success, the mayor of Kelowna has been struggling in recent years to rein in his city as it slowly spreads across the The census shows that 82 per cent of Canadian population live in large and http://www.huffingtonpost.ca/2017/02/08/canada-census-growth_n_14638052.html B.C. interior, testing his ability to provide core municipal services and medium-sized cities across the country, one of the highest concentrations build badly needed infrastructure. among G7 nations. Immigration has driven that change with new arrivals Nor is the city’s middle-aged spread at all unique, according to the 2016 census data released Wednesday: Canada’s population of 35.15 million is settling in the bigger cities, ensuring they and their suburban neighbours keep growing, while small cities get smaller.

settling in urban centres as opposed to rural communities.

“Also the rural areas located outside the census metropolitan areas, but close to them, are also growing faster than rural areas much farther away, so that’s also a sign of an urban spread phenomenon.’’

The three biggest metropolitan areas in the country — Toronto, Montreal and Vancouver — are now home to more than one-third of all Canadians with a combined population of 12.5 million, with almost one half living in Toronto and its suburban neighbours, the data shows.

13.8M

Ontario Population (Millions)

13.7M 13.6M 13.5M 13.4M 13.3M Canada is once again the fastest growing country in the G7, Statistics Canada says in the first of what will be seven tranches of 2016 census data to be released over the course of the year. Wednesday’s release focused on population and dwellings; the next one, in May, will be focused on age and sex.

13.2M 13.1M 13.0M 12.9M

2011

2012

2013

2014

Canada’s rural population is aging at a much faster rate than those in the urban centres, which tend to attract younger families, said Michael Haan, a sociology professor at Western University in London, Ont. “Demographers call cities population sinks for a reason,’’ Haan said.

“Imagine you had all sorts of water on a counter and it all just runs into the sink and it never comes out again.’’

2015

2016

How to keep those sinks from overflowing has become an increasing concern for urban planners.

ELECTRICITY SYSTEM STRAINED

“How do you create more density and a different built form that can help people age in place in the community they’re in right now so that they don’t feel they have to move somewhere else?”

However, population growth puts further strain on Ontario’s electricity supply and related costs.1 Coupled with economic growth, the increasing number of consumers continues to drive Ontario’s electricity costs.

Consumers’ electricity bills continue to go up at record rates, and no new power plants are slated for construction in the province.

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ONTARIO: FACT #2

Growth Strong and Healthy

By John Huang

Updated Jan 2018

According to the Government of Ontario’s latest Financial Reports, total growth in all of Ontario’s major industries has increased by 5.72% since 2012.

Ontario is poised to grow further from 2017 to 2020, according to the Ontario Chamber of Commerce.

Ontario Total Production Growth 620,000

610,000

Millions Dollars

600,000

590,000

Industry

Growth

Manufacturing

1.90%

Auto

2.75%

Services

6.91%

Retail

11.41%

Wholesale

8.40%

580,000

570,000

560,000

2012 Q2

2013 Q2

2014 Q2

2015 Q2

2016 Q2

2017 Q2

Helmut Pastrick, chief economist for Central 1 Credit Union, is forecasting Ontario’s economy will grow by a robust 3 per cent in 2017.

While the situation for growth looks rosy in Ontario, concern continues to mount about the cost of electricity supply in the province.

The existing electricity generation infrastructure is expected to sustain Ontario’s growth over the next 5 to 10 year period. New power plants are not currently slated for construction.

Commercial Energy Solutions

4

ONTARIO: FACT #3

Evaluating Electricity Price Growth in Ontario Published on July 20, 2017

bills (including tax) in major Canadian cities increased by an average of $37.68. During the same period, electricity bills in Toronto and Ottawa increased by $77.09 and $66.96, respectively. This means that residents in Toronto experienced electricity price increases of double the national average between 2010 and 2016.

In Toronto and Ottawa, the average monthly bills for residential consumers including taxes in 2016 were $201 and $183, respectively.

Electricity is an essential part of our modern lives. It powers our economy, generating the economic activity that underpins our high living standards. It also allows Canadians to enjoy the comforts of modern life, from warm homes and warm meals to internet access and entertainment. The full enjoyment of these benefits depends on electricity remaining affordable for people across the income spectrum.

But affordable electricity appears to be a growing challenge for Ontarians. In fact, electricity prices in Ontario have risen substantially over the last decade, placing a burden on many Ontarian households. Indeed, the province of Ontario has the fastest growing electricity prices in the country and its cities have some of the highest average residential monthly bills in Canada.

Electricity prices in Ontario have increased dramatically since 2008 based on a variety of comparative measures.

Ontario’s electricity prices have risen by 71 percent from 2008 to 2016, far outpacing electricity price growth in other provinces, income, and inflation. During this period, the average growth in electricity prices across Canada was 34 percent.

Ontario’s electricity price change between 2015 and 2016 alone is also substantial: the province experienced a 15 percent increase in one year. This was two-and-a-half times greater than the national average of 6 percent during the same period.

From 2008 to 2015, electricity prices also increased two-and-a-half times faster than household disposable income in Ontario. In particular, the growth in electricity prices was almost four times greater than inflation and over four-and-a-half times the growth of Ontario’s economy (real GDP).

The large electricity price increases in Ontario have also translated to significant increases in monthly residential electricity bills. Between 2010 and 2016, monthly electricity

5

On average in 2016, residents of major Canadian cities paid $141 including taxes for monthly electricity bills.

This means that Toronto’s monthly electricity bills (including tax) are $60 more per month ($720 more per year) than the Canadian average. Consumers in Ottawa pay $41 more per month ($492 more per year) on electricity bills than Canadians in other provinces. Montreal had the lowest monthly electricity bills for residential consumers at $83.

The problem of skyrocketing electricity prices and high bills is a made-in-Ontario problem directly tied to the provincial government’s policy choices. Ontario’s policies around renewable energy (wind, solar, and biomass) have resulted in large additional costs for consumers. More specifically, Ontario’s high electricity prices can be attributed to poorly structured long term contracts, the phase-out of coal energy, and a growing electricity supply and demand imbalance in the province that is resulting in Ontario exporting electricity at a loss.

High electricity prices for Ontarians, particularly when taxation is included, should be of central concern when the government is devising energy policy decisions. Given the critically important role that affordable electricity plays in peoples’ standard of living, it is time for the Ontario government to have a hard look at how their policy choices are affecting peoples’ lives. It is also time for the government to begin pursuing meaningful policy reforms aimed at lowering electricity bills for Ontario residents.

Evaluating Electricity Price Growth in Ontario Published on July 20, 2017

particular, the growth in electricity prices was almost four times greater than inflation and over four-and-a-half times the growth of Ontario’s economy (real GDP).

The large electricity price increases in Ontario have also translated to significant increases in monthly residential electricity bills. Between 2010 and 2016, monthly electricity bills (including tax) in major Canadian cities increased by an average of $37.68. During the same period, electricity bills in Toronto and Ottawa increased by $77.09 and $66.96, respectively. This means that residents in Toronto experienced https://www.fraserinstitute.ca/studies/evaluating-electricity-priceelectricity price increases of double the national average between growth-in-ontario 2010 and 2016.

Electricity is an essential part of our modern lives. It powers our economy, generating the economic activity that underpins our high living standards. It also allows Canadians to enjoy the comforts of modern life, from warm homes and warm meals to internet access and entertainment. The full enjoyment of these benefits depends on electricity remaining affordable for people across the income spectrum.

But affordable electricity appears to be a growing challenge for Ontarians. In fact, electricity prices in Ontario have risen substantially

In Toronto and Ottawa, the average monthly bills for residential consumers including taxes in 2016 were $201 and $183, respectively.

On average in 2016, residents of major Canadian cities paid $141 including taxes for monthly electricity bills. This means that Toronto’s monthly electricity bills (including tax) are $60 more per month ($720 more per year) than the Canadian average. Consumers in Ottawa pay $41 more per month ($492 more per year) on electricity bills than Canadians in other provinces. Montreal had the lowest monthly electricity bills for residential consumers at $83.

ONTARIO: FACT #4

Ontario household electricity prices to rise 52 per cent from 2017 to 2035 Electricity prices overall in Ontario are a contentious political issue, prompting the Liberal government’s plan to reduce electricity costs by 25 per cent on average Geoff Zochodne

The cost of electricity in Ontario for homes and businesses will keep on rising over the next 20 years - albeit not as high as once predicted - as the effects of the provincial Liberal government’s plan to lower power bills kick in and then wear off.

The government released an update to its long-term energy plan Thursday, projecting the average monthly residential bill for electricity in Ontario will rise from $127 this year to $193 by 2035, a 52 per cent increase.

The government, however, has brought in programs to produce average savings of 25 per cent for Ontario homes, the so-called “Fair Hydro Plan,” driving the average monthly power bill down to $127 in 2017 from $158 in 2016, the plan’s projections show.

“Certainly the measures brought forward in our Fair Hydro Plan have an effect, but it is well known that our government has taken major steps to remove costs from our electricity system, now and in the future,” Ontario Energy Minister Glenn Thibeault told reporters Thursday in Toronto.

Meanwhile, large industrial customers will see the price per megawatt hour they pay for electricity increase from $83 this year to $116 by 2035, according to projections. The government sees this as rising in line with inflation, but the cost still ends up nearly 40 per cent greater than that of today.

For industrial consumers in Northern Ontario, the price of power would rise from $63 per megawatt hour in 2017 to $96 by 2035, another 52 per cent jump, according to the long-term energy plan.

Industrial consumers have complained about pricey power costs, with a recent Fraser Institute study finding that about 64 per cent of the manufacturing jobs lost by the province from 2008 to 2015 could be chalked up to the increased expense.

Electricity prices overall in Ontario are a contentious political issue, prompting the Liberal government’s plan to reduce electricity costs by 25 per cent on average. The plan was rolled out in full this year and will have a net cost of $21 billion over 29 years, according the province’s financial accountability office. It includes an 8-per-cent rebate for customers enacted in January, in addition to a “refinancing” of some power costs that will see the government and Ontario Power Generation Inc. take on billions of dollars of debt.

October 26, 2017 1:24 PM EDT

The government’s latest price projections are lower than those made in long-term energy plans in 2013 and 2010. The 2013 long-term energy plan had predicted the average monthly residential bill would be $170 this year, and the 2010 plan estimated $178.

The plan boasts that the current electricity price for industrial consumers in Ontario remains below the average price in the Great Lakes region. The lower projected prices also include the removal of nearly $28 billion in costs, including the deferral of the construction of two new nuclear reactors and the scrapping of the second round of the province’s large renewable energy procurements.

The outlook also includes the benefits of an estimated expected changes to the province’s electricity market, where generators sell their power. The “market renewal,” as it is called, will usher in auctions that will help shore up a shortfall in electricity capacity in the mid-2020s, when OPG’s Pickering nuclear power plant is anticipated to be shut down and reactors at two other nuclear power plants are overhauled.

The government says it has spent nearly $70 billion on the electricity system since 2003, with the money going to fix up the grid, improve reliability and provide more sources of renewable or lower-emission energy. Ontario has also shut down its coalfired power plants since 2003, reducing the percentage of the province’s greenhouse gas emissions coming from the electricity sector to a predicted two per cent or so in 2017 from about 20 per cent in 2003, according to the long-term energy plan.

As well, the government’s demand outlook includes the annual proposed electrification of Ontario’s GO train system and new light-rail projects in the Greater Toronto Area, Kitchener and Ottawa.

Ontario’s next provincial election is set for June 2018.

Ontario household electricity prices to rise 52 per cent from 2017 to 2035 Electricity prices overall in Ontario are a contentious political issue, prompting the Liberal government’s plan to reduce electricity costs by 25 per cent on average Geoff Zochodne

October 26, 2017 1:24 PM EDT

The cost of electricity in Ontario for homes and businesses will keep on rising over the next 20 years - albeit not as high as once predicted - as the effects of the provincial Liberal government’s plan to lower power bills kick in and then wear off.

Electricity prices overall in Ontario are a contentious political issue, prompting the Liberal government’s plan to reduce electricity costs by 25 per cent on average. The plan was rolled out in full this year and will have a net cost of $21 billion over 29 years, according the province’s financial accountability office. It includes an 8-per-cent rebate for customers enacted in January, in addition to a “refinancing” of some power costs that will see the government and Ontario Power Generation Inc. take on billions of dollars of debt.

http://business.financialpost.com/commodities/energy/ontariohousehold-electricity-prices-to-rise-52-per-cent-from-2017-to-2035 The government released an update to its long-term energy plan Thursday, projecting the average monthly residential bill for electricity in Ontario will rise from $127 this year to $193 by 2035, a 52 per cent increase.

The government’s latest price projections are lower than those made in long-term energy plans in 2013 and 2010. The 2013 long-term energy plan had predicted the average monthly residential bill would be $170 this year, and the 2010 plan estimated $178.

Commercial Energy Solutions

The government, however, has brought in programs to produce average savings of 25 per cent for Ontario homes, the so-called “Fair Hydro Plan,” driving the average monthly power bill down to $127 in 2017 from $158 in 2016, the plan’s projections show.

The plan boasts that the current electricity price for industrial consumers in Ontario remains below the average price in the Great Lakes region. The lower projected prices also include the removal of nearly $28 billion in costs, including the deferral of the construction of two new nuclear reactors and the scrapping of the second round of the province’s large renewable energy procurements.

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ONTARIO: FACT #5

Libs killing business one kilowatt at a time

BY Kevin Connor

Skyrocketing hydro rates are forcing many Ontario manufacturers to close, lay off employees or move south of the border.

Hydro rates have increased so dramatically under Ontario’s Liberal government, that the province’s oncecheap electricity prices are now the highest in the country.

As a consequence, officials from American states are wooing Ontario businesses.

And it’s working.

“Our move is already underway,” said Peter Gossmann, vice president and general manager of Plasticap, a producer of caps for food companies, medical firms and other customers.

The company has 40 employees in Richmond Hill and is looking to expand with another 60 employees — only not in Ontario.

“There could have been 60 more jobs here and 150 in three years,” said Gossmann, who will be setting up a new shop in Ohio to excape the 38% increase in the company’s hydro costs since January.

“If the Liberals win the next election and things don’t change, we may close here (in Richmond Hill). The province is at a tipping point. There is an impending disaster. People have to make the move or they won’t survive. I know we can’t keep absorbing this.”

Gossmann added incentives and costs in the U.S. are just too alluring to ignore.

Shalini Sheth, of Surati Sweet Mart in Scarborough, said she is testing the waters to move to the U.S. and is being courted to relocate by four different states.

Recruiters in Louisiana have approached her offering power at about one-third of the 22 cents per kilowatt her company pays in Ontario.

“It’s significant,” she said, adding hydro rates, on top of planned minimum wage increases are threatening the viability of businesses.

Sheth had looked at purchasing a vacant shop next door to her Scarborough store to add more production lines, but has soured on that idea.

The smaller manufacturing sector are “second class” customers to hydro, insisted Jocelyn Bamford, vice president of Automatic Coating Limited and founder of the Coalition of Concerned Manufacturers and Businesses of Ontario.

“Companies can’t shut down production and send employees home to get a break in the bill. It doesn’t make sense unless you are running 24 hours. Most run one, maybe two shifts,” Bamford said.

7

Updated: November 26, 2017 8:03 PM EST

“You have to move or stay and fight. Tons of companies are considering moving south and then there will be no turning back. Where will our kids work?” she added.

Bamford said if she relocated to New York state, her company could save $22,000 a month in hydro costs alone.

“The Liberal government is killing manufacturing one kilowatt at a time,” she charged. “This is everybody’s fight if we want a good economy.

The government just wants to be re-elected without understanding what they are doing to the manufacturing sector,” Bamford said.

Bruce Crilly, president of CPD Construction Products, was sent a letter from Hydro Ontario in May that showed his monthly electricity billings increased by 136%.

Crilly said no reason was offered other than delivery charges.

“I’m faced with an increase of 136%. I was flabbergasted.

Who should I let go from my (Orangeville) plant to offset this outrageous increase?” said Crilly, who has been in business for 38 years.

“No one from Hydro One has come and told me why this is happening. I don’t want to terminate (any of my 12) employees, but I don’t know how to keep doing business.”

Four years ago, Hydro One came and replaced Crilly’s meters, saying they were faulty, and then gave him a bill for $4,000 suggesting he had underpaid the utility.

Hydro One has told Crilly he can realize savings on his bill by environmentally upgrading his lighting and machine motors at a cost of roughly $150,000.

Hydro One routinely reviews and updates rate classifications of accounts based on usage.

“For those customers whose accounts are changing … we provide over a year’s notice so they can planannual for how this change will affect them and we visit their establishment with an energy savings expert to discuss programs to help them make changes to their business to save money and take advantage of available funding for upgrades,” Baccega Rosa said.

Libs killing business one kilowatt at a time

BY Kevin Connor

Updated: November 26, 2017 8:03 PM EST

Skyrocketing hydro rates are forcing many Ontario manufacturers to close, lay off employees or move south of the border.

“Companies can’t shut down production and send employees home to get a break in the bill. It doesn’t make sense unless you are running 24 hours. Most run one, maybe two shifts,” Bamford said.

“You have to move or stay and fight. Tons of companies are considering moving south and then there will be no turning back.

http://torontosun.com/news/provincial/hydro-business Where will our kids work?” she added.

Hydro rates have increased so dramatically under Ontario’s Liberal government, that the province’s once-cheap electricity prices are now the highest in the country. As a consequence, officials from American states are wooing Ontario businesses.

And it’s working.

“Our move is already underway,” said Peter Gossmann, vice president and general manager of Plasticap, a producer of caps for food companies, medical firms and other customers.

The company has 40 employees in Richmond Hill and is looking to expand with another 60 employees — only not in Ontario.

“There could have been 60 more jobs here and 150 in three years,”

Bamford said if she relocated to New York state, her company could save $22,000 a month in hydro costs alone.

“The Liberal government is killing manufacturing one kilowatt at a time,” she charged. “This is everybody’s fight if we want a good economy.

The government just wants to be re-elected without understanding what they are doing to the manufacturing sector,” Bamford said.

Bruce Crilly, president of CPD Construction Products, was sent a letter from Hydro Ontario in May that showed his monthly electricity billings increased by 136%.

ONTARIO: FACT #6

Hydro One seeking rate hike to keep system stable, CEO says

By Allison Jones

Updated: November 16, 2017 5:19 pm

in 2018, the OEB said.

Ontario partially privatized Hydro One, starting with an IPO in 2015 and leaving the province with just under 50 per cent ownership.

Hydro One has agreed that some of the compensation costs will be borne by the shareholders and not the customers, but Schmidt said the salaries are of fair market value.

TORONTO – Hydro One has applied for a rate increase in order to keep the power system stable, its president and CEO said Thursday.

Speaking after delivering remarks to the Empire Club, Mayo Schmidt spoke about the application that’s currently before the Ontario Energy Board, which seeks to increase rates by 0.5 per cent this year and 4.8 per cent next year.

Hydro One has kept its distribution rates flat, what it is seeking is an increase to transmission rates, he said.

“What we apply for is to keep the system stable and functioning,” Schmidt said. “If in fact we don’t apply for capital that’s required to replace aged equipment and that equipment fails, the system fails, so Ontario – in whatever region that would be – would be without power.”

Ontario’s Liberal government cut hydro bills by an average of 25 per cent this year, after soaring costs for ratepayers helped send Premier Kathleen Wynne’s approval ratings to record lows.

Schmidt took some credit for the hydro plan in his speech Thursday, telling the audience that when he started at Hydro One two years ago one of the company’s first initiatives was to advocate for rate relief. Hydro One customers have seen an average 31 per cent decrease in bills, he said.

After the cut to bills this year, the government has said rate increases will be held to the rate of inflation for the next four years. The OEB will set Hydro One’s rates some time this fall.

As it considers the application, the OEB recently ordered Hydro One to cut its administrative budget by $30 million over two years. Customers shouldn’t foot the bill for “unreasonably high” compensation for Hydro One’s senior staff, the regulator said.

The total corporate management costs for Hydro One in 2014 of about $5.5 million are set to increase to $22.1 million

“We would take the view that the compensation is marketbased compensation to attract and retain leaders in the business,” he said. “We respect that politicians in some cases may have a different view, which is fine.”

Schmidt’s own compensation package, $4.5 million in 2016 that includes an $850,000 salary plus bonuses, has frequently come under fire from opposition politicians. The company has also reduced its costs by tens of millions of dollars over the last two years, he said, which benefits customers.

The OEB also rejected a proposal to give all of the tax savings generated by the 2015 IPO of the partially privatized company to shareholders. The regulator instead mandated shareholders receive 71 per cent of the savings while ratepayers receive the remaining 29 per cent.

That would drop Hydro One’s shareholders portion of tax savings from $81.9 million to $58.1 in 2017 and from $89.6 million to $63.6 million in 2018. annual Hydro One has asked the OEB to reconsider.

“When (Ontario) sold the company the shareholders that are acquiring those shares would have acquired the effect of the tax in their transaction,” Schmidt said. “We would have a view that the tax would belong to shareholders.”

Hydro One seeking rate hike to keep system stable, CEO says

By Allison Jones

The Canadian Press

Updated: November 16, 2017 5:19 pm

As it considers the application, the OEB recently ordered Hydro One to cut its administrative budget by $30 million over two years. Customers shouldn’t foot the bill for “unreasonably high” compensation for Hydro One’s senior staff, the regulator said.

The total corporate management costs for Hydro One in 2014 of about $5.5 million are set to increase to $22.1 million in 2018, the OEB said.

TORONTO – Hydro One has applied for a rate increase in order to keep the power system stable, its president and CEO said Thursday.

Ontario partially privatized Hydro One, starting with an IPO in 2015 and leaving the province with just under 50 per cent ownership.

Hydro One has agreed that some of the compensation costs will

https://globalnews.ca/news/3865352/hydro-one-seeking-rate-hike-tobe borne by the shareholders and not the customers, but Schmidt said the salaries are of fair market value. keep-system-stable-ceo-says/

Speaking after delivering remarks to the Empire Club, Mayo Schmidt spoke about the application that’s currently before the Ontario Energy Board, which seeks to increase rates by 0.5 per cent this year and 4.8 per cent next year.

“We would take the view that the compensation is market-based compensation to attract and retain leaders in the business,” he said. “We respect that politicians in some cases may have a different view, which is fine.”

Commercial Energy Solutions

Hydro One has kept its distribution rates flat, what it is seeking is an increase to transmission rates, he said.

“What we apply for is to keep the system stable and functioning,” Schmidt said. “If in fact we don’t apply for capital that’s required to replace aged equipment and that equipment fails, the system fails, so Ontario – in whatever region that would be – would be

8

Schmidt’s own compensation package, $4.5 million in 2016 that includes an $850,000 salary plus bonuses, has frequently come under fire from opposition politicians. The company has also reduced its costs by tens of millions of dollars over the last two years, he said, which benefits customers.

ONTARIO: FACT #7 annual

Hydro rates in Toronto the highest in Canada: Fraser Institute

by NEWS STAFF

Last Updated Jul 20, 2017 at 7:00 am ED

A new report from the Fraser Institute reveals Toronto has the highest hydro rates across Canada, and that electricity prices in Ontario have increased twice as fast as the national average over the past decade.

Hydro rates in Toronto the highest in Canada: Fraser Institute

by NEWS STAFF

Posted Jul 20, 2017 6:44 am EDT Last Updated Jul 20, 2017 at 7:00 am ED

According to the report, which was released on Thursday, the average Toronto residential hydro bill is $60 more per month than the national average.

Residents in Toronto pay on average $201 per month (including taxes) for hydro – that’s an increase of $77.09 over the past six years. In comparison, Ottawa residents pay $183 per month.

A new report from the Fraser Institute reveals Toronto has the highest hydro rates across Canada, and that electricity prices in Ontario have increased twice as fast as the national average over the past decade.

According to the report, which was released on Thursday, the average Toronto residential hydro bill is $60 more per month than the national average.

Residents in Toronto pay on average $201 per month (including taxes) for hydro – that’s an increase of $77.09 over the past six years. In comparison, Ottawa residents pay $183 per month.

“You compare that to Montreal, which is only $83 a month, in Calgary it is $109 a month,” Kenneth Green with Fraser Institute told 680 NEWS. The report also found that between 2008 and 2015, hydro prices in the province have increased 2.5 times faster than income levels. http://www.680news.com/2017/07/20/hydro-rates-toronto-highest“Electricity prices rose a staggering 71 per cent (from 2008 to 2016), more than double the national average increase of 34 per cent over the canada-fraser-institute/ same time,” the report states.

“You compare that to Montreal, which is only $83 a month, in Calgary it is $109 a month,” Kenneth Green with Fraser Institute told 680 NEWS. The report also found that between 2008 and 2015, hydro prices in the province have increased 2.5 times faster than income levels.

“Electricity prices rose a staggering 71 per cent (from 2008 to 2016), more than double the national average increase of 34 per cent over the same time,” the report states.

The study attributes the high electricity rates in Ontario to the provincial government’s phasing out of coal energy and poorly structured long-

term renewable energy attributes generation contracts.

The study the high electricity rates in Ontario to the provincial government’s phasing out of coal energy and “It is the resultstructured of government projects andlong-term government planning, rather than fundamentals of inflation or economic growth or fuel availability. contracts. poorly renewable energy generation It’s really the choices made by governments in Ontario,” Green said. year, the governing Liberals introduced lower current electricity prices, which went into effect on July 1. Under the government’s “ItEarlier isthisthe result of government projects and government planning, rather than fundamentals of inflation or economic growth plan, Ontarians will see lowered hydro bills for the next 10 years, but will then pay higher costs for the following 20 years. or fuel availability. It’s really the choices made by governments in Ontario,” Green said. http://www.680news.com/2017/07/20/hydro-rates-toronto-highest-canada-fraser-institute/

Earlier this year, the governing Liberals introduced lower current electricity prices, which went into effect on July 1. Under the government’s plan, Ontarians will see lowered hydro bills for the next 10 years, but will then pay higher costs for the following 20 years.

9

ONTARIO: FACT #8

Wind, solar fuel energy price hikes: Fraser Institute Vito Pilieci, Ottawa Citizen

The report, released Thursday, says wind and solar production accounts for just four per cent of the province’s energy needs but is responsible for 20 per cent of all energy costs paid by Ontarians.

And even with that imbalance, “the government wants to triple the number of wind and solar generators,” said Tom Adams, independent energy analyst and co-author of the Fraser Institute report.

“In the U.S. power rates have been falling, but Ontarians are paying more than ever,” Adams added.

Since its introduction in 2009, Ontario’s Green Energy Act has been a lightning rod for controversy. The act sets a priority on renewable energy technologies and offers high-paying incentives to organizations willing to set up solar, wind and other renewable energy-producing sources.

Prices, meantime, have continued to march upward. According to the Ontario Energy Board, which regulates utilities, consumers were paying 4 cents per kilowatt hour (kWh) during off-peak hours in November 2008, four months before the Green Energy Act was implemented. Those same consumers now pay 7.7 cents per kWh. Peak-hours costs have climbed from 8.8 cents per kWh in November 2008 to 14 cents today.

Over the same period, the province’s energy use has remained relatively stable. According to the Independent Electricity System Operator, the organization responsible for connecting and monitoring all of Ontario’s various power grids and predicting demand for electricity, the total demand in Ontario in 2009 was 139 terawatt-hours (a terawatt is equal to 1 trillion watts). In 2013, demand had increased by 1.22 per cent to 140.7 terawatthours.

“Over the past decade, electricity prices in Ontario have skyrocketed and they’ll continue to rise unless the province puts the interests of ordinary Ontarians ahead of industry insiders,” said Ross McKitrick, a senior fellow at the Fraser Institute and economics professor at the University of Guelph. “Many European countries made costly commitments to renewable energy but are now winding back those commitments. If Ontario wants to provide residents and businesses with relief from rising power costs, it should reconsider costly commitments made to renewable energy companies.”

The 40-page report suggests reopening four of Ontario’s 12 coal-fired generating plants, which are equipped with advanced air pollution control technologies, to generate cheaper energy until the province’s nuclear facilities can be refurbished.

Last Updated: October 30, 2014 4:21 PM EDT

Reverting to coal-fired energy is becoming popular.

Jennifer Beaudry, a spokeswoman for the Ministry of Energy, quickly squashed the idea of Ontario doing the same.

“This year, Ontario became the first jurisdiction in North America to eliminate coal as a source of electricity production,” she said in a prepared statement. “Replacing coal-fired electricity generation was the single largest climate change initiative undertaken in North America. Altogether, more than 85 per cent of the power generated in Ontario during 2013 came from emissions-free sources of energy such as water, nuclear and renewables.”

Beaudry took issue with the Fraser Institute’s figures, maintaining that wind and solar generation account for eight per cent, not 20 per cent, of consumers’ bills. The institute’s Adams argued that the ministry’s estimates leave out numerous factors, including selling excess power at a loss to neighbouring provinces and states.

According to an annual report from Hydro-Québec, which tracks the price of electricity across much of the continent, power bills in Ottawa and Toronto ranked 14th and 15th highest among 22 major cities in Canada and the U.S. Average prices of 13.45 cents per kWh in Ottawa and 13.78 cents in Toronto compare with 7.06 cents in Montreal, 9.71 cents in Vancouver and 11.61 cents in Chicago.

The Fraser Institute has long been lobbying against the government’s green energy plans. A report issued by the institute on Oct. 22 argued that Ontario can cancel or change contracts it has signed with energy producers by changing legislation pertaining to energy production. Specifically, it argued that the government could cancel contracts issued under the Feed-In-Tariff program, which compensates businesses and homeowners to generate electricity from renewable sources.

Wind, solar fuel energy price hikes: Fraser Institute VITO PILIECI, OTTAWA CITIZEN More from Vito Pilieci, Ottawa Citizen Published on: October 30, 2014 | Last Updated: October 30, 2014 4:21 PM EDT

A new report from the Fraser Institute is providing wind for the sails of Ontario renewable energy opponents by suggesting that the province’s rising energy prices are largely a result of investments into wind and solar generation. and monitoring all of Ontario’s various power grids and predicting demand for electricity, the total demand in Ontario in 2009 was 139 terawatt-hours (a terawatt is equal to 1 trillion watts). In 2013, demand had increased by 1.22 per cent to 140.7 terawatt-hours.

Reverting to coal-fired energy is becoming popular.

Jennifer Beaudry, a spokeswoman for the Ministry of Energy, quickly squashed the idea of Ontario doing the same.

“This year, Ontario became the first jurisdiction in North America to eliminate coal as a source of electricity production,” she said in a prepared statement. “Replacing coal-fired electricity generation was the single largest climate change initiative undertaken in North America. Altogether, more than 85 per cent of the power generated in Ontario during 2013 came from emissions-free sources of energy such as water, nuclear and renewables.”

The report, released Thursday, says wind and solar production accounts for just four per cent of the province’s energy needs but is responsible for 20 per cent of all energy costs paid by Ontarians.

And even with that imbalance, “the government wants to triple the number of wind and solar generators,” said Tom Adams, independent energy analyst and co-author of the Fraser Institute report.

Beaudry took issue with the Fraser Institute’s figures, maintaining that wind and solar generation account for eight per cent, not 20 per cent, of consumers’ bills. The institute’s Adams argued that the ministry’s estimates leave out numerous factors, including selling excess power at a loss to neighbouring provinces and states.

http://ottawacitizen.com/business/energy/wind-solar-fuel-energy-price-hikes-fraserinstitute

“In the U.S. power rates have been falling, but Ontarians are paying more than ever,” Adams added.

Since its introduction in 2009, Ontario’s Green Energy Act has been a lightning rod for controversy. The act sets a priority on renewable energy technologies and offers high-paying incentives to organizations willing to set up solar, wind and other renewable energy-producing sources.

Prices, meantime, have continued to march upward. According to the Ontario Energy Board, which regulates utilities, consumers

“Over the past decade, electricity prices in Ontario have skyrocketed and they’ll continue to rise unless the province puts the interests of ordinary Ontarians ahead of industry insiders,” said Ross McKitrick, a senior fellow at the Fraser Institute and economics professor at the University of Guelph. “Many European countries made costly commitments to renewable energy but are now winding back those commitments. If Ontario wants to

According to an annual report from HydroQuébec, which tracks the price of electricity across much of the continent, power bills in Ottawa and Toronto ranked 14th and 15th highest among 22 major cities in Canada and the U.S. Average prices of 13.45 cents per kWh in Ottawa and 13.78 cents in Toronto compare with 7.06 cents in Montreal, 9.71 cents in Vancouver and 11.61 cents in Chicago.

Commercial Energy Solutions

10

The Fraser Institute has long been lobbying

ONTARIO: FACT #9

Darlington Reactor Refurbishment Reduces Electricity Generation SNC-Lavalin joint venture awarded $2.75 billion contract for execution phase of Darlington nuclear refurbishment project by Ontario Power Generation Montreal January 11, 2016

When the reactors are fully refurbished, OPG’s Darlington station, which produces 20% of Ontario’s electricity, will be able to provide safe, reliable, affordable and CO2-free energy to the citizens of Ontario for another 30 years.

http://www.snclavalin.com/en/press-releases/2016/darlington-nuclear-refurbishment-contract

SNC-Lavalin (TSX:SNC) is proud to announce that its 50/50 joint venture (JV) with Aecon Group has been awarded a $2.75 billion contract to carry out the execution phase of the Darlington Re-tube and Feeder Replacement (RFR) scope of work by Ontario Power Generation in support of the refurbishment of the Darlington Nuclear station.

“Our team will immediately shift its focus to the execution phase of the project. This will include training and procurement of critical resources before the outage begins,” said Preston Swafford, Chief Nuclear Officer and Executive Vice-President, Nuclear. “Our portion of the project is expected to create approximately 300 jobs within SNC-Lavalin and another 500 jobs in Ontario. We would also like thank Canada’s Building Trades for their support on this project.’’

The first outage is targeted to begin in the fourth quarter of 2016 and it will take approximately ten years to

The commencement of the execution phase marks the JV’s successful delivery of the definition phase (2012-2016) of the project, which included the construction of a fullscale reactor mock-up facility to simulate key elements of the refurbishment work and the testing of specialized tooling and to help prepare a comprehensive estimate and schedule for the project.

The execution phase of the project will involve the replacement of main reactor components using tools and methods that were developed and tested during the project’s definition phase, carried out by the JV. Each of the four Darlington Candu reactors will be taken out of service sequentially for approximately three years to allow for the replacement of fuel channels, feeder pipes, calandria tubes and end fittings.

“Following almost four years of preparation and planning, this amendment to proceed with the physical refurbishment work demonstrates OPG’s confidence in our joint venture team and in our capabilities in the nuclear industry,” said Sandy Taylor, President, Power, SNC-Lavalin.

11

complete the work on all four units. SNC-Lavalin’s share of the contract will be added to its Power segment backlog in first quarter of 2016.

ONTARIO: FACT #10

Liberal hydro plan to cost $45B but will only save electricity ratepayers $24B, says watchdog annual

Financial accountability officer says there will be a net cost of $21B to Ontario residents Allison Jones - The Canadian Press

Ontario’s budget watchdog says the Liberal government will spend $45 billion over the life of its hydro plan to save people $24 billion on their electricity bills.

A report from the financial accountability officer says this means there will be a net cost of $21 billion to Ontarians over the approximately 30 years of the plan.

Liberal hydro plan to cost $45B but will only save electricity ratepayers $24B, says watchdog Financial accountability officer says there will be a net cost of $21B to Ontario residents Allison Jones - The Canadian Press

The $45 billion is mostly the cost of funding an eight-percent rebate that took effect on bills in January, but that assumes balanced budgets for the next 30 years.

The FAO says if the government has to fund that rebate through debt, the cost to the province could balloon up to $93 billion.

Legislation to cut electricity bills by 17 per cent on average — on top of the eight-per-cent rebate — is before the House and has to pass in the remaining four sitting days before summer if relief is to be delivered under the timeline the Liberals promised.

The Liberals have said after the initial cut to bills this year, rate increases will be held to inflation for the next four years, and in 10 years ratepayers will have to start paying back debt that will be accumulated in order to finance lower rates for the next decade.

Legislation expected to pass next week in Ontario would cut hydro bills by an average of 17 per cent, but would also cost consumers The FAO says that from 2017 more in the long run. (Colin Perkel/ Canadian Press)

to 2027 electricity costs will be lower than they would have otherwise been, saving ratepayers $33 billion, but after that, electricity costs will be higher than under the status quo, with ratepayers spending $9 billion more through to 2045.

May 24, 2017

May 24, 2017

Ontario’s budget watchdog says the Liberal government will spend $45 billion over the life of its hydro plan to save people $24 billion on their electricity bills.

for the next decade.

The FAO says that from 2017 to 2027 electricity costs will be lower than they would have otherwise been, saving ratepayers $33 billion, but after that, electricity costs will be higher than under the status quo, with ratepayers spending $9 billion more through to 2045.

A report from the financial accountability officer says this http://www.cbc.ca/news/canada/toronto/ontario-hydro-1.4128902 The hydro plan will lower time-of-use rates by removing from means there will be a net cost of $21 billion to Ontarians bills a portion of the global adjustment, a charge consumers pay for above-market rates to power producers. For the next

over the approximately 30 years of the plan.

10 years, a new entityrates overseen byby Ontarioremoving Power Generation The $45hydro billion is mostlyplan the cost ofwill funding an eight-per-cent The lower time-of-use will take on debt to pay that difference. rebate that took effect on bills in January, but that assumes balanced budgets for the 30 years. from bills anextportion of the global adjustment, a charge Then, the cost of paying back that debt with interest — which the government has said will be up toto $28 billion — will go The FAO says if the government fund thatabove-market rebate consumers payhas tofor rates power back onto ratepayers’ bills for the next 20 years as a “Clean through debt, the cost to the province could balloon up to Energy Adjustment.” $93 billion. producers.

For the next 10 years, a new entity overseen The FAOtake estimates the cost debt of that interest be $21 billion, to cut electricity bills Generation by 17 per cent on byLegislation Ontario Power will on towillpay that assuming a five-per-cent weighted average interest rate. average — on top of the eight-per-cent rebate — is before If that rises to six per cent, ratepayers will end up paying the House and has to pass in the remaining four sitting difference. $30 billion, the FAO projects. days before summer if relief is to be delivered under the timeline the Liberals promised.

Kathleen Wynne Then, the cost of paying back that debt withPremier interest — promised to cut hydro bills The Liberals have said after after widespread anger the initial cut to bills this year, which the government has said will be up to $28 billion over rising costs helped rate increases will be held send her approval ratings inflation for the next four —toyears, will go back onto ratepayers’ bills for the next 20 years to record lows. asandain “Clean Energy Adjustment.”

Electricity bills in the province have roughly doubled in the 10 years ratepayers will have to start paying back debt that will be accumulated in order to finance lower rates

Legislation expected to pass next week in Ontario would cut hydro bills by an average of 17 per cent, but would also cost consumers more in the long run. (Colin Perkel/Canadian Press)

last decade, due in part to green energy initiatives, and the government has said the goal of its hydro plan is to better

The FAO estimates the cost ofspread that interest will be $21 out those costs. billion, assuming a five-per-cent weighted average interest rate. If that rises to six per cent, ratepayers will end up paying $30 billion, the FAO projects.

Premier Kathleen Wynne promised to cut hydro bills after widespread anger over rising costs helped send her approval ratings to record lows.

Electricity bills in the province have roughly doubled in the last decade, due in part to green energy initiatives, and the government has said the goal of its hydro plan is to better spread out those costs.

Commercial Energy Solutions

12

ONTARIO: FACT #11

Ontario’s Prices Going Up

Paid for by the Government of Ontario

13

Like in a lot of places around the world, electricity prices in Ontario are going up.

Ontario has shut down 8 coal units so far and plans to shut down all remaining units by 2014.

Why? Ontario is building the infrastructure we need to make sure the lights stay on, now and in the future. That means upgrading old transmission lines and power plants. It also means shutting down coal plants that pollute the air we breathe and moving to cleaner sources of electricity.

ENERGY SOURCES

Since 2003, over 8,400 megawatts of new electricity generation have been built or refurbished Ă? enough to power Toronto and Ottawa for a year.

How much will I pay?

Over the next 20 years, including taxes and other charges, electricity bills are projected to rise about 3.5 per cent per year.

However, largely because of investments being made in the short term to bring on new energy supply and upgrade electricity infrastructure, electricity bills are expected to increase by about 7.9 per cent per year over the next five years.

Commercial Energy Solutions

14

What about conservation?

Taking steps to use less energy — lowering heat when you’re not home, choosing high-efficiency appliances or shifting household activities away from times when demand is highest — can also help cut electricity bills and reduce strain on the energy system.

Time-of-use pricing is scheduled to be in place across the province by 2012 and can help you manage your electricity bill. Different rates are available during different times of the day — rates are discounted when demand isn’t as high and the cost of producing power is lowest.

TIME-OF-USE RATE CHART

Off-peak 5.1 cents/kWh

Mid-peak 8.1 cents/kWh

**Effective November 1, 2011, winter weekday off-peak rates will start at 7 p.m.

THEN 15

On-peak 9.9 cents/kWh *Effective May 1, 2011

TIME-OF-USE PRICE PERIODS Protect your budget and the environment-time your heavy electricity usage around off-peak periods.

7

7 P.M.

A.M.

5

P.M.

A.M.

5

7

P.M.

A.M.

7 11

11 Summer (May 1 - October 31) Weekdays

Weekends and Statutory Holidays

Winter (November 1 - April 30) Weekdays

PRICES EFFECTIVE JULY 1ST 2017

6.5¢/ kWh

9.5¢/ kWh

13.2¢/ kWh

off-peak

mid-peak

on-peak

For current TOU pricing, please go to www.ontarioenergyboard.ca Source: Ontario Energy Board

NOW Commercial Energy Solutions

16

WHAT IS GLOBAL ADJUSTMENT? As of July 2017, the GA rate for eligible customers using less than 250,000 kWh annually is being reduced by 3.29¢/kWh

HOEP/GA Relationship: 1. When HOEP goes up, GA goes down 2. When HOEP goes down, GA goes up The relationship between HOEP and GA is inverse, as shown on the following table:

August 17

September 17

October 17

November 17

Period Average

1.73

2.31

0.88

1.40

1.58

GA*

11.50

12.74

10.21

11.16

11.40

GA Credit

(3.29)

(3.29)

(3.29)

(3.29)

(3.29)

9.94

11.76

7.80

9.28

9.69

HOEP

TOTAL

· During periods of high usage, such as the peak summer and winter months, the combined total (HOEP + GA) is generally lower than shoulder months · The Combined Total as of Nov 2017 is 9.69 c/kWh * Note that this is the actual Global Adjustment, Billed rates may vary due to different billing periods and the 1st estimate Global Adjustment

Global Adjustment (GA) covers the cost for providing both adequate generating capacity and conservation programs for Ontario. The GA calculation is based on the difference between the Hourly Ontario Electricity Price (HOEP) and: • O ntario Power Generation’s regulated nuclear and hydro generation • I ESO (including former Ontario Power Authority) contracts with generators and suppliers of conservation • C ontracted rates administered by the Ontario Electricity Financial Corporation paid to existing generators

17

ONTARIO: FACT #12

Refinancing the Global Adjustment annual

Ontario’s Fair Hydro Plan would lower electricity bills by 25 per cent on average for all residential consumers in the province. Many small businesses and farms would also benefit from the initiative, with additional relief for people with low incomes and those living in eligible rural communities.

Ministry of

Energy

BACKGROUNDER

Refinancing the Global Adjustment Ontario’s Fair Hydro Plan would lower electricity bills by 25 per cent on average for all residential consumers in the province. Many small businesses and farms would also benefit from the initiative, with additional relief for people with low incomes and those living in eligible rural communities.

Decades of under-investment in the electricity system by governments of all stripes resulted in the need to make significant investments in generation, transmission and distribution assets. In addition, an important decision was made to eliminate Ontario’s use of coal and build clean, renewable supply. Between 2005 and 2015, Ontario invested more than $50 billion in the electricity system, including $35 billion in electricity generation to ensure the system is clean and reliable. The costs of these investments are funded in part through the Global Adjustment (GA).

The majority of the province’s electricity generators have 20-year contracts. Many of these generators will be https://news.ontario.ca/mei/en/2017/03/refinancing-the-globalable to operate past their contract term, meaning that generating assets are expected to have ongoing useful life and adjustment.html

Decades of under-investment in the electricity system by governments of all stripes resulted in the need to make significant investments in generation, transmission and distribution assets. In addition, an important decision was made to eliminate Ontario’s use of coal and build clean, renewable supply. Between 2005 and 2015, Ontario invested more than $50 billion in the electricity system, including $35 billion in electricity generation to ensure the system is clean and reliable. The costs of these investments are funded in part through the Global Adjustment (GA).

will benefit future ratepayers by reducing the need to finance the development of new generating assets.

To relieve the current burden on ratepayers and share costs more fairly, a portion of the GA is being refinanced.

Refinancing the GA would and immediate rate relief by spreading the cost of electricity The majority ofprovide thesignificant province’s electricity generators have 20-year contracts. Many of these generators will be able to investments over the expected lifecycle of the infrastructure that has been built. In the early years, a portion of the costs covered by the GA would be refinanced to reduce pressure on today’s electricity ratepayers.

In later years, operate past their contract term, meaning that generating assets are expected to have ongoing useful life and will benefit the cost of refinancing would be recovered from ratepayers. Under current forecasts, the immediate reduction in the GA would be about $2.5 billion year on average the over the first 10 years, with annual interest not future ratepayers byperreducing need to finance thecosts development of new generating assets. exceeding $1.4 billion.

The government intends to introduce legislation that would, if passed, enable the Independent Electricity System

(IESO) and Ontario Power Generation (OPG) to work together to refinance the GA over a longer period ToOperator relieve the current burden on ratepayers and share costs more fairly, a portion of the GA is being refinanced. of time. The legislation would also outline the role for the Ontario Energy Board (OEB), as it relates to the financing proposal.

Refinancing the GA would provide significant and immediate rate relief by spreading the cost of electricity investments over the expected lifecycle of the infrastructure that has been built. In the early years, a portion of the costs covered by the GA would be refinanced to reduce pressure on today’s electricity ratepayers. In later years, the For media inquiries only call: ontario.ca/energy-news Disponible en françaisUnder current forecasts, the immediate reduction in the GA cost of refinancing would be recovered from ratepayers.

Colin Nekolaichuk, Minister’s Office, 416-325-2690 Colin.Nekolaichuk@ontario.ca would be about $2.5 billion per year on average over the first 10 years, with annual interest costs not exceeding Natasha Demetriades, Communications Branch, 416-326-5452 Natasha.Demetriades@ontario.ca $1.4 billion.

The government intends to introduce legislation that would, if passed, enable the Independent Electricity System Operator (IESO) and Ontario Power Generation (OPG) to work together to refinance the GA over a longer period of time. The legislation would also outline the role for the Ontario Energy Board (OEB), as it relates to the financing proposal.

For media inquiries only call: Colin Nekolaichuk, Minister’s Office, 416-325-2690 Colin.Nekolaichuk@ontario.ca

ontario.ca/energy-news Disponible en français

Natasha Demetriades, Communications Branch, 416-326-5452 Natasha.Demetriades@ontario.ca Commercial Energy Solutions

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HOEP + GA RATES ARE SIGNIFICANTLY LOWER

HOEP PRICE

*1.66¢/kWh

+

GLOBAL ADJUSTMENT

5.48¢/kWh

=

TOTAL PRICE

7.14¢/kWh + 1.25¢ Program Fee

For businesses open regular business hours, and/or use an equal amount of Peak, Mid-Peak, and Off-Peak electricity,

the average commodity price would be, 9.73¢/kWh * based on average HOEP in 2017

19

ONTARIO: FACT #13

Global Adjustment Reduction Exceeds 30% The Ontario Energy Board (OEB) today announced that electricity prices will go down on July 1.

These reductions flow from the government’s Fair Hydro Plan, and apply to different customers in different ways depending on how they buy their electricity.

Thursday, June 22, 2017 annual

For residential and small business customers that buy their electricity from their utility, the OEB has set new lower Regulated Price Plan (RPP) electricity prices that build on the reduction in RPP prices that came into effect on May 1. With the new RPP prices that will start to apply on July 1, the total bill for the proxy customer described under the Fair Hydro Act, 2017 will be about $121. That is about $41 or 25% lower than it would have been without the following mitigation: •

t he planned refinancing of a portion of the costs of the Global Adjustment (GA), as reflected in the new RPP prices;

•

t he 8% rebate, equivalent to the provincial portion of the HST, that has been in place since January 1, 2017;

•

•

t he impact of removing most of the cost of the Rural and Remote Rate Protection program from electricity bills, which will now be paid for from provincial revenues; and t he impact of removing the cost of the Ontario Electricity Support Program (OESP) from electricity bills. The OESP will continue to be available to help eligible low-income customers reduce their electricity bills, and will also be paid for from provincial revenues.

Global Adjustment Reduction Exceeds 30% The Ontario Energy Board (OEB) today announced that electricity prices will go down on July 1.

These reductions flow from the government’s Fair Hydro Plan, and apply to different customers in different ways depending on how they buy their electricity.

Thursday,June22,2017

For residential and small business customers that buy their electricity from their utility, the OEB has set new lower Regulated Price Plan (RPP) electricity prices that build on the reduction in RPP prices that came into effect on May 1.

With the new RPP prices that will start to apply on July 1, the total bill for the proxy customer described under the Fair Hydro Act, 2017 will be about $121. That is about $41 or 25% lower than it would have been without the following mitigation: •

the planned refinancing of a portion of the costs of the Global Adjustment (GA), as reflected in the new RPP prices;

•

the 8% rebate, equivalent to the provincial portion of the HST, that has been in place since January 1, 2017;

• the impact of removing most of the cost of the Rural and Remote Rate Protection program from electricity https://www.oeb.ca/newsroom/2017/electricity-prices-are-dropbills, which will now be paid for from provincial revenues; and ping-again-july-1 •

the impact of removing the cost of the Ontario Electricity Support Program (OESP) from electricity bills.

The OESP will continue to be available to help eligible low-income customers reduce their electricity bills, and will also be paid for from provincial revenues.

For other customers that are eligible for electricity bill reductions under the Fair Hydro Act, 2017, the OEB has set For other customers that are eligible for electricity bill reductions under the Fair Hydro Act, 2017, the OEB has a credit that will reduce their GA charges. These include customers that are for the RPPthatbut have chosen set a credit that will reduce theireligible GA charges. These include customers are eligible for the RPP but have a a contract with an energy retailer or market-based pricing. The credit is designed to provide these contract with an energy retailer or market-based pricing. Thechosen credit is designed to provide these customers with a customers with a level of benefit that corresponds with the benefit being provided to the proxy customer level of benefit that corresponds with the benefit being provided tothethe customer through the lower RPP prices through lower proxy RPP prices announced today. announced today.

The GA credit that applies to other eligible customers has been set by the OEB at $32.90/MWh (or about 3.3¢/kWh).

The GA credit that applies to other eligible customers has been set by the OEB at $32.90/MWh (or about 3.3¢/kWh).

The new RPP prices and the GA credit will be in effect until April 30, 2018. At that time, the OEB will reset RPP prices and the GA credit in a way that holds increases to the rate of inflation in accordance with legislation.

The new RPP prices and the GA credit will be in effect until April 30, 2018. At that time, the OEB will reset RPP prices and the GA credit in a way that holds increases to the rate of inflation in accordance with legislation.

Commercial Energy Solutions 20

VS RPP: A COMPARISON

How Does RPP Compare to Hourly Wholesale

?

The following table illustrates the cumulative differential between HOEP+Plus and RPP customers that consume 150,000 kWh/year*

Cumulative Differential

Contract Start

Contract End

Length in Months

RPP Cost

HOEP+Plus Cost

11/01/2016

10/31/2017

12

$17,733.33

$17,522.13

$211.21

11/01/2015

10/31/2017

24

$37,358.33

$35,445.63

$1,912.71

11/01/2014

10/31/2017

36

$54,708.33

$51,936.63

$2,771.71

11/01/2013

10/31/2017

48

$70,508.33

$66,168.38

$4,339.96

11/01/2012

10/31/017

60

$84,883.33

$79,933.50

$4,949.83

*Based on a customer that has equal amounts of peak, mid-peak, and off-peak consumption

21

OWE’S ELECTRICITY PRODUCTS

WHOLESALE PRICING FOR REGULATED PRICE PLAN (RPP) CUSTOMERS *

CANCEL ANYTIME CURRENT RPP PRICES OFF-PEAK

MID-PEAK

ON-PEAK

6.5¢/kWh

9.5¢/kWh

13.2¢/kWh

*No Penalties or Exit Fees for cancellation, (90 Days’ written notice required).

Commercial Energy Solutions 22

ELECTRICITY - LARGE VOLUME CUSTOMER

What’s Changed?

Electricity demand for natural gas sets record highs in 2016.

Natural gas – based electricity generation is more expensive than nuclear, hydro or green.

Approximately 33% of electricity generation capacity uses natural gas

Darlington refurbishment = loss of 960 MW of nuclear baseload generation in Ontario.

High International Demand - USA

23

ELECTRICITY FORECAST - LARGE VOLUME CUSTOMER

CAD cents/kWh

Electricity Price Expectation

Note: HOEP price for large volume customer only.

Commercial Energy Solutions 24

ONTARIO ELECTRICITY: A COMPARISON - LARGE VOLUME CUSTOMER

Weighted Average HOEP 2017

25

2018

ONTARIO WHOLESALE ENERGY’S BENEFITS

Cancel Anytime Program* for small volume customers Special introduction pricing for large volume and referral customers

Daily pricing – use our supply desk for best pricing

100% load following fixed rate protection for large volume customers

Use as much or little without penalty - ­we assume all risk

* For Customers we require 90 days’ written notice.

Commercial Energy Solutions 26

SMALL VOLUME ZERO RISK

NATURAL GAS PROGRAM

CANCEL ANYTIME* Intro price available for Large Volume and Referral Customers

*No Penalties or Exit Fees for cancellation, (90 Days’ written notice required).

27

ONTARIO: FACT #1

National Energy Board Projections for Natural Gas The Henry Hub price for natural gas in the Reference Case is assumed to increase from US$3.90/MMBtu in 2013 to US$6.20/MMBtu in 2035 (in 2012 dollars) as shown in Figure 1. The Henry hub natural gas price is nearly 60 per cent higher in 2035 compared with 2013.

Figure 1 - Henry Hub Natural Gas Price at Louisiana, All Cases $1 per MMBtu is approximately equal to 4 ¢/m3 9.00 / 36 ¢/m3 8.00 / 32 ¢/m3

$/MMBtu / ¢/m3

7.00 / 28 ¢/m3 6.00 / 24 ¢/m3 5.00 / 20 ¢/m3 4.00 / 16 ¢/m3 3.00 / 12 ¢/m3 2.00 / 8 ¢/m3 1.00 / 4 ¢/m3

Historically, the price of natural gas tended to move in relation to the oil price, with natural gas trading at a small discount to an energy equivalency-ratio of 6:1 (oil prices in US$/bbl relative to gas prices in US$/MMBtu).

This ratio has increased in the past several years to 18:1 in 2010. This is due to the large new natural gas production potential brought about by increased utilization of multi-stage hydraulic fracturing technology combined with few opportunities to switch between petroleumbased fuels and natural gas. In the Reference Case, the ratio slowly declines to just over 14:1 by 2035 based on the oil and gas price projections. With considerable uncertainty surrounding the crude oil and natural gas price relationship, price projections for oil and natural gas were developed independently.

Actual

Normal Scenario

High Scenatio

varies more widely than the oil price from the Reference Case in the Fast and Slow Cases, reaching US$8.90/MMBtu and US$6.75/MMBtu, respectively, by 2035.

In the Low Case, the natural gas price is assumed to reach US$6.40/MMBtu by 2035 and US$10.70/MMBtu in the High Case.

Unlike oil prices, which are determined in a global market, the Henry Hub natural gas price is primarily determined on a continental basis, as the North American market lacks significant links to global natural gas markets. The impact of North American economic growth on the natural gas price is larger than on the oil price. As a result, the natural gas price

https://www.neb-one.gc.ca/nrg/ntgrtd/ftr/archive/2011/index-eng. html#f2_1

Commercial Energy Solutions 28

ONTARIO: FACT #2

Natural Gas Prices Are on a Tear

Lows for the year are likely behind us, but the highs may not be.

by Jason Schenker

the gas can also be gone relatively quickly from new wells.

Winter hasn’t even begun and natural gas is already spiking. Prices jumped sharply last week, as fundamental concerns about an arctic blast and future winter weather squeezed shorts. They are likely to rise further through the end of the year and into 2018. The cold weather has been accompanied by a relative deficit of natural gas inventory. This surge in perceived demand along with tight supply triggered a technical breakout of prices to the upside.

For most of 2017, price movements have been relatively rangebound between a low of $2.56 in February, and a high of only $3.42 in May. This relatively narrow and somewhat low set of prices is a departure from historical levels, which have often had multi-dollar price swings in a matter of months. After exceptionally low average prices for 2015 and 2016, average annual prices are likely to rise both this year and next.

Prices have been held back in recent years by the shale revolution. Shale natural gas wells can bring on small amounts of gas quickly. As a result, natural gas has become a bit more like an agricultural commodity: It is driven by weather dynamics, and some shortterm incremental, additional supplies are easier to bring online than they had been when supplies were dominated by large conventional asset plays. Of course, there are some limitations to the price-dampening impact of shale natural gas wells, because these have steep decline curves. This means that

Natural gas prices have also been contained this year because rig counts have more than doubled from the low levels of May 2016. And improved oil prices have also driven up shale oil well-drilling activity, which produces associated natural gas as a byproduct.

Yet, despite these apparently pricebearish supply dynamics, U.S. natural gas inventories have become relatively tight over the course of 2017. Since the 2016 inventory levels of natural gas were very high, it’s not that impressive that inventories are down 5.5 percent from last year, even though that represents a sizable deficit. What’s more impressive, is that current inventories are also 1.8 percent below the five-year average for this time of year. That’s a bullish signal, and given the recent arctic blast, there’s a risk that the deficit to the five-year average level of inventories could increase over the next two weekly natural gas inventory reports from the Energy Information Administration.

November 13, 2017, 2:15 PM EST

Natural gas traders were too short at the end of October, especially in light of the U.S. inventory situation, which was already showing a deficit, compared to both last year and the five-year average level. While winter weather triggered a short squeeze last week, natural gas prices could have more room to run.

After all, the impact of cold weather has not even shown up in the weekly EIA natural gas storage reports yet. This means that prices only reflect some of the recent cold weather, and when markets see the full inventory impact, prices could rise further.

Trading technicals also turned sharply positive for natural gas last week, with prices rising sharply above the critical 130-day moving average for the first time since September. With current inventories in a deficit, more fundamental support could send prices toward the next critical technical level -- the year’s high close of $3.42. Closes above that level could trigger significant technical buying -- and a sharp spike in prices.

Given inventory dynamics and technical factors, natural gas price lows for the year are likely behind us, but the highs for the year may not be. annual

Bloomberg Natural Gas Prices Are on a Tear Lows for the year are likely behind us, but the highs may not be.

by Jason Schenker

November 13, 2017, 2:15 PM EST

Natural gas prices have also been contained this year because rig counts have more than doubled from the low levels of May 2016. And improved oil prices have also driven up shale oil well-drilling activity, which produces associated natural gas as a byproduct.

Winter hasn’t even begun and natural gas is already spiking. Prices jumped sharply last week, as fundamental concerns about an arctic blast and future winter weather squeezed shorts. They are likely to rise further through the end of the year and into 2018. The cold weather has been accompanied by a relative deficit of natural gas inventory. This surge in perceived demand along with tight supply triggered a technical breakout of prices to the upside.

Yet, despite these apparently price-bearish supply dynamics, U.S. natural gas inventories have become relatively tight over the course of 2017. Since the 2016 inventory levels of natural gas were very high, it’s not that impressive that inventories are down 5.5 percent from last year, even though that represents a sizable deficit. What’s more impressive, is that current inventories are also 1.8 percent below the five-year average for this time of year. That’s a bullish signal, and given the recent arctic blast, there’s a risk that the deficit to the five-year average level of inventories could increase over the next two weekly natural gas inventory reports from the Energy Information Administration.

For most of 2017, price movements have been relatively rangebound between a low of $2.56 in February, and a high of only $3.42 in May. This relatively narrow and somewhat low set of prices is a departure from historical levels, which have often had multi-dollar price swings in a matter of months. After exceptionally low average prices for 2015 and 2016, average annual prices are likely to rise both this year and next.

Natural gas traders were too short at the end of October, especially in light of the U.S. inventory situation, which was already showing a deficit, compared to both last year and the five-year average level. While winter weather triggered a short squeeze last week, natural gas prices could have more room to run. After all, the impact of cold weather has not even shown up in the weekly EIA natural gas storage reports yet. This means that prices only reflect some of the recent cold weather, and when markets see the full inventory impact, prices could rise further.

Prices have been held back in recent years by the shale revolution. Shale natural

Trading technicals also turned sharply positive for natural gas last week, with prices rising sharply above the critical 130-day moving average for the first time

gas wells can bring on small amounts of gas quickly. As a result, natural gas since September. With current inventories in a deficit, more fundamental support https://www.bloomberg.com/view/articles/2017-11-13/ has become a bit more like an agricultural commodity: It is driven by weather could send prices toward the next critical technical level -- the year’s high close of dynamics, and some short-term incremental, additional supplies are easier to bring $3.42. Closes above that level could trigger significant technical buying -- and a online than they had been when supplies were dominated by large natural-gas-prices-are-on-a-tear conventional sharp spike in prices. Given inventory dynamics and technical factors, natural gas asset plays. Of course, there are some limitations to the price-dampening impact of shale natural gas wells, because these have steep decline curves. This means that the gas can also be gone relatively quickly from new wells.

price lows for the year are likely behind us, but the highs for the year may not be.

https://www.bloomberg.com/view/articles/2017-11-13/natural-gas-prices-are-on-a-tear

29

ONTARIO: FACT #3

3 Reasons Natural Gas Is Heading A Lot Higher

By Martin Tillier

Commodity pricing is a complex thing, with a whole host of things affecting the price at which buyers and sellers transact, but almost all of those things fall into one of three categories; the fundamental, the political and the technical. These three things are often in conflict, but when they all point to the same thing a major, sustained move is coming.

That is the case right now with U.S. natural gas and the resulting move could easily push prices to levels not seen for years.

Supply & Demand Fundamentals Commodity specific fundamental factors such as supply and demand are the most influential thing on price. The basic economic theory of pricing tells us that, but it also suggests that the market will automatically adjust to changing conditions. When demand outstrips supply, for example, prices rise which slows demand and the higher price makes additional marginal production profitable, increasing supply. Those two things rebalance the market and price returns to the mean. After a big drop in natural gas a couple of years ago the market is now in the process of rebalancing, but a few things suggest that the pace of that change is increasing and some overshoot now looks inevitable.

Firstly what was, until recently, a closed market is opening up.

Exporting natural gas from the U.S. has never been a practical proposition, given that the country has always used more than it produced. A combination of high oil prices a few years ago and the fracking revolution changed all that though, and the move to export began. Building new liquefaction and export terminals takes time though and the first wave are now coming on line. According to the EIA America will have the capacity to export 40% of its production by 2020, up from zero just a short while ago.

National Energy Gas Market Overview: Wold LNG Landed Prices

The lack of export capacity as production increased has had a serious effect on North American prices, as the Federal Energy Commission graphic below shows. The price differential makes it obvious that if U.S. producers get access to overseas markets they will export, at least up to the point where the U.S. price catches up, and that is where politics comes in.

Politics Second in direct influence is politics, both domestic and international.

Changes to the legal and regulatory environment in producing countries as well as geopolitical concerns that have the potential to affect either side of the supply/demand equation can cause major moves in price.

May 11, 2017, 4:12 PM CDT

One might expect that the Trump administration’s determination to open up Federal lands for drilling and reduce environmental protections associated with oil and gas production would be a negative for gas prices by increasing supply but the opposite is true. That may be the case for oil, but for natural gas greater pipeline capacity and faster, easier approval of export facilities will more than offset that.

Similarly the belief that less of a focus on greenhouse gas emissions and a coal-friendly administration will reverse the demand increases that there

3 Reasons Natural Gas Is Heading A Lot Higher

By Martin Tillier - May 11, 2017, 4:12 PM CDT

Commodity pricing is a complex thing, with a whole host of things affecting the price at which buyers and sellers transact, but almost all of those things fall into one of three categories; the fundamental, the political and the technical. These three things are often in conflict, but when they all point to the same thing a major, sustained move is coming.

That is the case right now with U.S. natural gas and the resulting move could easily push prices to levels not seen for years.

Politics Second in direct influence is politics, both domestic and international.

Changes to the legal and regulatory environment in producing countries as well as geopolitical concerns that have the potential to affect either side of the supply/demand equation can cause major moves in price.

One might expect that the Trump administration’s determination to

open up Federal lands for drilling and reduce environmental protections Supply & Demand Fundamentals http://oilprice.com/Energy/Natural-Gas/3-Reasons-Natural-Gas-Isassociated with oil and gas production would be a negative for gas Heading-A-Lot-Higher.html prices by increasing supply but the opposite is true. That may be the Commodity specific fundamental factors such as supply and demand are the most influential thing on price. The basic economic theory of pricing tells us that, but it also suggests that the market will automatically adjust

case for oil, but for natural gas greater pipeline capacity and faster, easier approval of export facilities will more than offset that.

to changing conditions. demand outstrips supply, for example, have been forWhen gas over the last few years ignores some facts.

The Similarly the belief that less of a focus basic on greenhouse gas emissions prices rise which slows demand and the higher price makes additional and a coal-friendly administration will reverse the demand increases marginal production profitable, increasing supply. Those two things thatpower there have been for gas over the last few years ignores some main drivers ofpricethat have plants that have switched rebalance the market and returns growth to the mean. After a big dropbeen in basic facts. The main drivers of that growth have been power plants natural gas a couple of years ago the market is now in the process of that have switched to natural gas as their fuel. Those changes cannot but agas few things thatfuel. the pace Those of that change is torebalancing, natural assuggest their changes cannot be reversed in a hurry. be reversed in a hurry. Even if they could it would make no sense. The increasing and some overshoot now looks inevitable. current administration is not going to force utilities to switch to coal Even if they it would make no sense.

The current is fired stations but there is every chanceadministration that a future one would mandate Firstly what was, until could recently, a closed market is opening up. Exporting closing them. natural gas from the U.S. has never been a practical proposition, given thatgoing the country has used more than it produced.

A combination not toalways force utilities to switch to coal fired stations but there is every Technical Factors of high oil prices a few years ago and the fracking revolution changed all that though, and the move to export began. Building new liquefaction and chance that a future one would mandate them.

Usuallyclosing technical analysis is useful only to predict short term moves but export terminals takes time though and the first wave are now coming on line. According to the EIA America will have the capacity to export 40% of its production by 2020, up from zero just a short while ago.

sometimes a longer term trend can be clearly seen.

Technical Factors

National Energy Gas Market Overview: Wold LNG Landed Prices

Usually technical analysis is useful only to predict short term moves but sometimes a longer term trend can beTheclearly seen. two charts above show U.S. natural gas futures prices for the last 6 months (top) and the last 3 years (bottom). As you can see in both cases the current price is in the bottom half of a clearly defined upward channel. Natural gas has been volatile recently, so technical analysis can only be relied upon so much, but the basic, long term trend is definitely bullish.

The lack of export capacity as production increased has had a serious effect on North American prices, as the Federal Energy Commission graphic below shows. The price differential makes it obvious that if U.S. producers get access to overseas markets they will export, at least up to the point where the U.S. price catches up, and that is where politics comes in.

In short then all three major influences on natural gas are suggesting a move higher, and when that happens, even a natural contrarian such as me has to sit up and take notice. There will no doubt be some bumps on the road as that is the nature of markets, but over the next six months to a year a return to natural gas prices nudging at the $5 mark certainly looks on the cards.

The two charts above show U.S. natural gas futures prices for the last 6 months (top) and the last 3 years (bottom). As you can see in both cases the current price is in the bottom half of a clearly defined upward channel. Natural gas has been volatile recently, so technical analysis can only be relied upon so much, but the basic, long term trend is definitely bullish.

In short then all three major influences on natural gas are suggesting a move higher, and when that happens, even a natural contrarian such as me has to sit up and take notice. There will no doubt be some bumps on the road as that is the nature of markets, but over the next six months to a year a return to natural gas prices nudging at the $5 mark certainly looks on the cards.

Commercial Energy Solutions 30

ONTARIO: FACT #4

World LNG Estimated Landed Prices: Jan-18

UK $7.29 = 32.8 for ¢/m3

Cove Point $5.01 = 22.5 for ¢/m3

Belgium

Canaport

$9.55 = 42.8 for ¢/m3

$7.71 = 34.7 for ¢/m3

$

$ $ $

$

Altamira

$

$ Lake Charles $2.96 = 13.3 for ¢/m3

$9.09 = 40.9 for ¢/m3

Bahia Blanca

Korea $9.55 = 42.8 for ¢/m3

$

Spain

$

$8.61 = 38.7 for ¢/m3

$ China

India $9.55 = 42.8 for ¢/m3

$9.52 = 42.8 for ¢/m3

$

$9.35 = 42.1 for ¢/m3

$1 per GJ is equal to 4.5 ¢/m3 based upon a .80 CAD

31

“

“

As LNG exports increase, prices will converge to the upside based upon world pricing.

ONTARIO: FACT #5

Natural gas prices flare up more than 13 percent in past week on cold snap, strong demand Patti Domm

Updated 11:24 AM ET Thu, 28 Dec 2017

https://www.cnbc.com/2017/12/28/natural-gas-prices-flare-up-morethan-10-percent-on-cold-snap.html

A polar blast has heated up natural gas futures, which are up more than 13 percent in the past week on strengthening demand and the outlook for more cold weather.

Bitter cold weather across the northern tier of the U.S. expanded to the East Coast this week, and it is expected to remain frigid into early January.

“This is a substantial strengthening in the heating demand outlook. The cold weather system that was supposed to be limited to the northern Midwest has spread to the eastern part of the country,” said John Kilduff, partner at Again Capital.

Natural gas futures for February were trading at $2.94 per million British thermal units, an increase of 7.4 percent on Thursday and more than 13 percent from a week ago.

Recently, prices were as low as $2.56 last Thursday, close to the low of $2.522 of last February.

The U.S. has an abundant supply of natural gas, and warmer winter weather has kept prices depressed. Prices were higher Thursday morning but gained more momentum after the government reported a withdraw last week of 112 billion cubic feet of gas from storage, the second week of a triple digit withdraw.

Model forecast for seven days through Jan. 5

Meisel said, adding that U.S. production is at record highs and inventories are just below the five-year average.

Meisel said natural gas bears believe the record U.S. production will continue to mean abundant supplies, but bulls are hoping the drawdown of some supply from storage will pressure prices.

“What the market is all worried about is how much gas we have in storage in March,” said Meisel. “The question is are we going to have a gas shortage by the end of the winter if this cold sticks around. It’s been a wild few weeks in the natural gas market.”

He said the next level to watch would be the $2.98 to $3.02 range.

“Weather modeling has been difficult because of La Nina,” said Kilduff, adding that January until just recently had been expected to be warmer.

Natural gas has been volatile within a relatively low range, and futures were trading as high as $3.22 a month ago. But winter weather failed to materialize until just recently, and now the outlook is for even colder weather.

“Now, we are seeing risks that some of the strongest cold could come again between Jan. 4 and 6 before gradually moving out,” according to Jacob Meisel, chief weather analyst at Bespoke Weather. He said there’s potential for a warmer period in mid-January, with the coldest period expected Jan. 4 to 6.

“We’re rallying because the warmup has been pushed back. ... This move is almost entirely weather driven,”

* Forecast for Gas Weighted Degree Day (GWDD) projects the amount of weather-driven demand.

Commercial Energy Solutions 32

ONTARIO: FACT #6

Renowned energy trader Mark Fisher: Natural gas will break out above $4 or maybe even $5 Tom DiChristopher

Posted: 07/06/2017 1:30 Pm EST

• Mark Fisher forecast natural gas prices will break $4 or $5 per mmbtu once a streak of warm winters breaks.

• Fisher says general investors could buy into natural gas drillers rather than trying to time commodity price moves.

• Fisher is less bullish on oil drillers and thinks crude will remain stuck in a range between $40 and $50 a barrel for some time.

Renowned energy trader Mark Fisher on Thursday forecast that a string of unseasonably warm winters will break and send natural gas above $4 or $5 per million British thermal units.

Natural gas prices have remained locked in a range between about $2.75 and $3.25 per mmbtu, but Fisher believes in the next year or two, winter temperatures will return to normal levels and push up fuel costs.

“At some point nat gas is going to trade with a four-, fivehandle on it and surprise a lot of people,” the MBF Clearing founder and CEO told CNBC’s “Fast Money: Halftime Report.”

“In energy, natural gas has the potential for the most upside,” he said.

Investors who bought into big-cap natural gas players will be rewarded for waiting, said Fisher. He declined to offer his stock picks, but did say he isn’t certain the heavily indebted shale pioneer Chesapeake Energy would survive.

Chesapeake did not respond to a request for comment from CNBC. The general investor will be better served by investing in natural gas drillers than by trying to time price moves in the commodity, which Fisher called “a not effective strategy over the last 12 months.”

“For those who feel that they have some knowledge of the markets ... there’s still opportunity to trade the futures market, for sure,” he said. “I think there’s going to be a lot of volatility coming up in nat gas and power.”

Fisher favors drillers with natural gas exposure to those focused on oil exploration and production. For the time being, crude prices will remain stuck in a range between $40 and $50 a barrel, he said.

Renowned energy trader Mark Fisher: Natural gas will break out above $4 or maybe even $5 Tom DiChristopher | @tdichristopher

Posted: 07/06/2017 1:30 Pm EST

• Mark Fisher forecast natural gas prices will break $4 or $5 per mmbtu once a streak of warm winters breaks.

• Fisher says general investors could buy into natural gas drillers rather than trying to time commodity price moves.

• Fisher is less bullish on oil drillers and thinks crude will remain stuck in a range between $40 and $50 a barrel for some time.

Renowned energy trader Mark Fisher on Thursday forecast that a string of unseasonably warm winters will break and send natural gas above $4 or $5 per million British thermal units.

Natural gas prices have remained locked in a range between about $2.75 and $3.25 per mmbtu, but Fisher believes in the next year

https://www.cnbc.com/2017/07/06/mark-fisher-natural-gas-will-breakor two, winter temperatures will return to normal levels and push up fuel costs. out-above-4-or-maybe-5.html “At some point nat gas is going to trade with a four-, five-handle on it and surprise a lot of people,” the MBF Clearing founder and CEO told CNBC’s “Fast Money: Halftime Report.”

“In energy, natural gas has the potential for the most upside,” he said.

Investors who bought into big-cap natural gas players will be rewarded for waiting, said Fisher. He declined to offer his stock picks, but did say he isn’t certain the heavily indebted shale pioneer Chesapeake Energy would survive.

Chesapeake did not respond to a request for comment from CNBC. The general investor will be better served by investing in natural gas drillers than by trying to time price moves in the commodity, which Fisher called “a not effective strategy over the last 12 months.”

33 Adam Jeffery | CNBC Mark Fisher, founder and CEO of MBF Clearing Corp.

“For those who feel that they have some knowledge of the markets ... there’s still opportunity to trade the futures market, for sure,” he said. “I think there’s going to be a lot of volatility coming up in nat gas and power.”

Fisher favors drillers with natural gas exposure to those focused on oil exploration and production. For the time being, crude prices will remain stuck in a range between $40 and $50 a barrel, he said.

The reason: traders are unwinding their bullish bets when oil prices approach $50 a barrel and covering their short positions when crude heads toward $40, Fisher said.

Many U.S. oil drillers will be able to survive and big oil’s dividends are not in jeopardy with prices range bound between $40 and $50, Fisher said. He does see more mergers and acquisitions on the horizon as energy firms seek to cut fat.

ONTARIO: FACT #7

Blizzard Triggers a 60-Fold Surge in Prices for U.S. Natural Gas

by Naureen S Malik

Updated on January 5, 2018, 12:00 AM EST

• $175 is what you’ll pay for gas that’s less than $3 elsewhere • Pipeline constraints triggering cold-weather supply scramble

Natural gas surged to 60 times the going rate as howling blizzard conditions stoked demand for the furnace fuel across the U.S. Northeast.

Spot prices for the fuel used to heat homes and generate power reached a record $175 per million British thermal units in New York, according to Consolidated Edison Inc. That’s a far cry from the $2.93 that U.S. gas futures have been averaging on the New York Mercantile Exchange this winter.

Other major trading hubs in New York and New England saw prices exceed $100, according to a person familiar with those markets. Even if the rally cools later Thursday as the storm lambasting New York and Boston moves off to the north, prices in the region probably will close in the triple digits, the person said.

The gas squeeze underscores the lack of adequate pipeline capacity to haul enough gas from Appalachia and points farther afield to Northeast metropolises where households have been scrapping heating-oil tanks for gas-fired furnaces. As a result, gas in the region is the world’s priciest, commanding 14 times more than U.K. futures price and about nine times more than Asian imports of the liquefied version of the fuel.

The market mayhem in and around New York is having a knock-on effect even in regions far away from stormy weather. At an Appalachian pipeline hub known as Dominion South that is typically home to the cheapest American gas, the price jumped to $4.15, almost twice the 12-month average and a huge premium to late October, when it fetched just 29 cents, according to Borruso and Intercontinental Exchange data.

“With demand and price for gas being this high in New York and New England, everybody wants toannual flow gas into the region but the current pipeline infrastructure cannot carry enough to even the market out,” said Armagan Yavuz, the Boston-based regional director for Genscape Inc., which tracks real-time power and gas data.

Bloomberg Markets

“This string of cold has stressed the market just as much as the polar vortex” of 2014, said John Borruso, director of natural gas trading at ConEdison in Valhalla, New York. “You are seeing pipeline restrictions and flow restrictions pop up.”

The cold-weather cyclone swirling off Nantucket island grounded thousands of flights, disrupted rail service, shut schools and prompted emergency declarations up and down the Eastern Seaboard. Even as slashing winds cut off power to more than 70,000 homes and businesses, electricity prices climbed 126 percent to $273.23 a megawatt-hour on Thursday morning, the highest for that time of day in almost four years.

Blizzard Triggers a 60-Fold Surge in Prices for U.S. Natural Gas

by Naureen S Malik

January 4, 2018, 1:43 PM EST | Updated on January 5, 2018, 12:00 AM EST

* $175 is what you’ll pay for gas that’s less than $3 elsewhere * Pipeline constraints triggering cold-weather supply scramble Natural gas surged to 60 times the going rate as howling blizzard conditions stoked demand for the furnace fuel across the U.S. Northeast.

Spot prices for the fuel used to heat homes and generate power reached a record $175 per million British thermal units in New York, according to Consolidated Edison Inc. That’s a far cry from the $2.93 that U.S. gas futures have been averaging on the New York Mercantile Exchange this winter.

The cold-weather cyclone swirling off Nantucket island grounded thousands of flights, disrupted rail service, shut schools and prompted emergency declarations up and down the Eastern Seaboard. Even as slashing winds cut off power to more than 70,000 homes and businesses, electricity prices climbed 126 percent to $273.23 a megawatt-hour on Thursday morning, the highest for that time of day in almost four years.

The gas squeeze underscores the lack of adequate pipeline Other major trading hubs in New York and New England saw capacity to haul enough gas from Appalachia and points farther prices exceed $100, according to a person familiar with those afield to Northeast metropolises where households have been markets. Even if the rally cools later Thursday as the storm scrapping heating-oil tanks for gas-fired furnaces. As a result, lambasting New York and Boston moves off to the north, prices gas in the region is the world’s priciest, commanding 14 times in the region probably will close in the triple digits, the person more than U.K. futures price and about nine times more than said. https://www.bloomberg.com/news/articles/2018-01-04/natural-gas-in-uAsian imports of the liquefied version of the fuel.

s-soars-to-world-s-priciest-as-snow-slams-east The market mayhem in and around New York is having a

knock-on effect even in regions far away from stormy weather.

At an Appalachian pipeline hub known as Dominion South that is typically home to the cheapest American gas, the price jumped to $4.15, almost twice the 12-month average and a huge premium to late October, when it fetched just 29 cents, according to Borruso and Intercontinental Exchange data.

“With demand and price for gas being this high in New York Commercial Energy Solutions 34 and New England, everybody wants to flow gas into the region

“This string of cold has stressed the market just as much as the polar vortex” of 2014, said John Borruso, director of natural gas trading at ConEdison in Valhalla, New York. “You are seeing pipeline restrictions and flow restrictions pop up.”

but the current pipeline infrastructure cannot carry enough to even the market out,” said Armagan Yavuz, the Boston-based regional director for Genscape Inc., which tracks real-time power and gas data.

ONTARIO: FACT #8

Record Nuclear Shutdowns Seen Boosting Natural Gas

By Martin Tillier

May 11, 2017, 4:12 PM CDT

* Thirty-four nuclear units slated to close this spring: analyst * Reactors refuel in spring and fall to minimize losses More U.S. nuclear reactors will close for refueling this spring than at any time in nearly two decades creating a power shortage that will lift beaten-down natural gas.

Operators plan to shut 34 reactors, or more than a third of nuclear generating capacity, to replace fuel rods from March through May, according to Michael Rennhack, president and chief executive officer of www.NukeWorker.com, a website that advertises jobs in the sector. That would be the most for the time of year in data going back to 2000, according to the U.S. Nuclear Regulatory Commission and projections from Rennhack.

Swelling Spring Shutdowns The most reactor outages in over a decade this spring will lift natural gas use

annual

Scheduled closures this season include Exelon Corp.’s Nine Mile Point unit 1 north of Syracuse, New York, and FirstEnergy Corp.’s Beaver Valley unit 2 outside of Pittsburgh, the data show. Nuclear reactors provide about 20 percent of the nation’s electricity.

All told, reactors with capacity to provide about 36,000 megawatts of power may shut this spring. That’s up from the same time a year ago when 20 units with about 22,300 megawatts were projected to shut. Operators typically schedule refueling outages during the spring and fall when demand wanes to minimize lost power sales. Companies generally withhold market-sensitive information such as the estimated duration of the closures.

In a region that extends from Virginia to Florida, nine reactors with about 9,800 megawatts of generating capacity are scheduled to close to replace spent fuel rods, Rennhack’s data show. From Washington to Maine, 10 reactors with about 9,600 megawatts of capacity will shut.

Bloomberg Markets Record Nuclear Shutdowns Seen Boosting Natural Gas

by Jonathan Crawford

February 27, 2017, 12:42 PM EST

* Thirty-four nuclear units slated to close this spring: analyst * Reactors refuel in spring and fall to minimize losses More U.S. nuclear reactors will close for refueling this spring than at any time in nearly two decades creating a power shortage that will lift beaten-down natural gas.

Operators plan to shut 34 reactors, or more than a third of nuclear generating capacity, to replace fuel rods from March through May, according to Michael Rennhack, president and chief executive officer of www.NukeWorker.com, a website that advertises jobs in the sector.

That would be the most for the time of year in data going back to 2000, according to the U.S. Nuclear Regulatory Commission and projections from Rennhack.

Swelling Spring Shutdowns The most reactor outages in over a decade this spring will lift natural gas use

https://www.bloomberg.com/news/articles/2017-02-27/record-nuclear-shutdowns-seen-boosting-pummeled-natural-gas Scheduled closures this season include Exelon Corp.’s Nine Mile Point unit 1 north of Syracuse, New York, and FirstEnergy Corp.’s Beaver Valley unit 2 outside of Pittsburgh, the data show. Nuclear reactors provide about 20 percent of the nation’s electricity.

All told, reactors with capacity to provide about 36,000 megawatts of power may shut this spring. That’s up from the same time a

year ago when 20 units with megawatts for were projected to shut. Operators this typically schedule refueling outages during the Exelon spokeswoman Jill Lyon confirmed by e-mail that Nine Mile Point unit 1 about will22,300close refueling spring without spring and fall when demand wanes to minimize lost power sales. Companies generally withhold market-sensitive information such as the estimated duration of the closures. providing an estimated restart date. FirstEnergy spokeswoman Jennifer Young declined to confirm the timing of the In a region that extends from Virginia to Florida, nine reactors with about 9,800 megawatts of generating capacity are scheduled to close to replace spent fuel rods, Rennhack’s data show. From Washington to Maine, 10 reactors with about 9,600 megawatts of capacity will shut.

Beaver Valley reactor outage, according to an e-mail Friday.

35

Exelon spokeswoman Jill Lyon confirmed by e-mail that Nine Mile Point unit 1 will close for refueling this spring without providing an estimated restart date. FirstEnergy spokeswoman Jennifer Young declined to confirm the timing of the Beaver Valley reactor outage, according to an e-mail Friday.

ONTARIO: FACT #14

U.S. LNG Export Forecast Raised Due to Optimistic Market Outlook

By DEEPA PODUVAL

on January 29, 2015 at 10:00 AM

LNG Exports

BCF

Projected over the next 4years

1000

http://breakingenergy.com/2015/01/29/forecast-for-u-s-lng-exportsraised-as-market-outlook-continues-optimistic/

Note: Natural Gas exports will rise to 10 - 14 BCF per day by 2020. That represents a yearly export total of between 3,650 and 5,100 BCF. Year-end storage numbers vary from 800 BCF to 1,400 BCF, which would put Supply in a deficit of between 2,200 and 4,300 BCF per year based on today’s production. However, current production is expected to drop due to well-depletion and reduced ring-counts.

In order for production levels to be balanced to include domestic demand, the spot market prices would need to be in the USD 20 c/m3 to 24 c/m3 range.

750 500 250

Year1

Year2

Year3

Year4

Commercial Energy Solutions 36

ONTARIO WHOLESALE ENERGY NATURAL GAS PRICE PROTECTION

100% Load Following Fixed Price Protection

Intro Pricing for Large Volume and Referral Customers

Can use as little or as much without penalty

100% Weather Protected

37

UNION GAS DISTRIBUTION Date

Commodity Price (¢/m3)

Gas Cost Adjustment (¢/m3)

Effective Price (¢/m3)

Oct-17

13.73

3.46

17.19

Jul-17

16.29

2.94

19.23

Apr-17

15.86

1.59

17.44

Jan-17

16.02

0.70

16.72

Oct-16

11.57

-0.68

10.89

Jul-16

10.17

-0.44

9.72

Apr-16

9.62

-0.42

9.21

Jan-16

10.80

-1.32

9.48

Oct-15

12.53

-1.46

11.07

Jul-15

12.46

-1.29

11.17

Apr-15

12.03

-0.89

11.14

Jan-15

15.11

3.88

18.99

Oct-14

15.10

4.11

19.21

Jul-14

17.92

4.67

22.59

Apr-14

17.92

4.47

22.39

Jan-14

12.86

0.45

13.31

Oct-13

12.49

-0.20

12.29

Jul-13

14.15

-2.31

11.85

Apr-13

12.38

-3.59

8.79

Jan-13

12.88

-2.10

10.78

Oct-12

10.84

-1.26

9.58

Jul-12

10.07

-1.27

8.80

Apr-12

9.47

-1.33

8.15

Jan-12

12.18

-1.01

11.17

Oct-11

13.77

-1.04

12.74

Jul-11

14.93

-1.16

13.77

Commercial Energy Solutions 38

UNION GAS DISTRIBUTION Date

39

Commodity Price (¢/m3)

Gas Cost Adjustment (¢/m3)

Effective Price (¢/m3)

Apr-11

14.08

-0.76

13.32

Jan-11

14.39

-0.90

13.49

Oct-10

15.53

-2.34

13.19

Jul-10

17.23

-4.14

13.09

Apr-10

20.90

-6.22

14.68

Jan-10

19.84

-8.64

11.19

Oct-09

19.95

-8.61

11.34

Jul-09

20.58

-5.25

15.34

Apr-09

23.53

-1.83

21.70

Jan-09

30.11

1.23

31.34

Oct-08

33.51

1.60

35.11

Jul-08

37.83

-1.07

36.76

Apr-08

30.52

-3.09

27.43

Jan-08

27.19

-4.42

22.77

Oct-07

29.52

-4.59

24.93

Jul-07

33.27

-5.77

27.50

Apr-07

32.97

-7.09

25.88

Jan-07

31.90

-7.07

24.83

Oct-06

35.65

-4.13

31.52

Jul-06

36.07

-3.63

32.44

Apr-06

36.88

-1.87

35.01

Jan-06

41.67

-

ENBRIDGE GAS DISTRIBUTION Date

Commodity Price (¢/m3)

Gas Cost Adjustment (¢/m3)

Effective Price (¢/m3)

Oct-17

9.83

0.73

10.56

Jul-17

12.06

0.36

12.42

Apr-17

11.38

-0.40

10.97

Jan-17

11.45

-0.92

10.53

Oct-16

11.18

-0.54

10.64

Jul-16

9.63

-0.06

9.57

Apr-16

9.18

2.21

11.38

Jan-16

10.53

1.22

11.75

Oct-15

12.24

0.85

13.10

Jul-15

12.18

2.57

14.75

Apr-15

11.73

2.72

14.45

Jan-15

14.74

3.58

18.32

Oct-14

14.62

3.05

17.68

Jul-14

17.60

0.92

18.52

Apr-14

17.60

3.29

20.90

Jan-14

12.68

-0.94

11.74

Oct-13

12.30

-0.84

11.46

Jul-13

14.00

-1.10

12.90

Apr-13

12.15

-1.85

10.30

Jan-13

12.85

-2.12

10.73

Oct-12

10.72

-1.91

8.81

Jul-12

9.85

-1.37

8.47

Apr-12

9.42

-1.35

8.06

Jan-12

11.85

-0.70

11.15

Oct-11

13.69

-1.46

12.23

Jul-11

14.93

-1.85

13.08

Commercial Energy Solutions 40

ENBRIDGE GAS DISTRIBUTION

41

Date

Commodity Price (¢/m3)

Gas Cost Adjustment (¢/m3)

Effective Price (¢/m3)

Apr-11

13.98

-2.17

11.81

Jan-11

14.42

-2.17

12.25

Oct-10

15.42

-1.64

13.78

Jul-10

17.30

-1.09

16.21

Apr-10

21.16

-0.05

21.12

Jan-10

19.97

-7.05

12.91

Oct-09

19.86

-6.91

12.95

Jul-09

20.43

-5.72

14.71

Apr-09

23.54

-6.16

17.37

Jan-09

30.37

-1.21

29.16

Oct-08

33.76

1.70

35.46

Jul-08

39.01

-0.86

38.15

Apr-08

30.36

-3.96

26.40

Jan-08

26.76

-2.26

24.50

Oct-07

29.10

-3.09

26.01

Jul-07

32.86

-6.63

26.23

Apr-07

32.86

-3.86

29.00

Jan-07

31.48

-0.87

30.61

Oct-06

34.07

-11.56

22.51

Jul-06

34.07

-6.24

27.83

Apr-06

35.40

-1.64

33.76

Jan-06

43.12

-1.93

41.19

NOTE _______________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________________

Commercial Energy Solutions 42