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Ontario to allow green energy on the grid - but at what cost?

George Smitherman had the kind of day that a politician dreams about. Wearing a green tie for the occasion, Ontario's Energy Minister yesterday unveiled his long-awaited - and much-leaked - plan to transform the way Ontario generates and uses electricity and then basked in applause.

"Ontario is raising the bar on our collective ambitions," he said in introducing legislation that would make it easier - he calls it "turbo-charging" the system - to mount renewable energy projects and to create "a culture of conservation" that would reduce electricity consumption.

Environmentalists loved it. Even many of them had to swallow Mr. Smitherman's insistence that new nuclear plants would be built. Unions and farmers sang his praises as did the odd property developer. Even the guys who generate electricity by burning fossil fuels - so 20th century! - congratulated him.

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But the judgment that counts most - that of the business and residential users who spend more than $7-billion a year on electricity - will take longer to determine because the Energy Minister has given them so little to chew on.

His legislation, Bill 150, is long on framework but short on substance. It proposes sweeping change to the electricity system by allowing access to the transmission grid to producers of renewable energy such as wind and solar power. It promises attractive prices for the power that is produced in these small projects but it doesn't elaborate, so it's difficult to know what the impact on the monthly bill will be.

The new law would override municipal objections to small-scale renewable energy projects but it remains silent on crucial issues such as how far a wind turbine would have to be set back from housing. It offers homeowners assistance in financing the cost of heat pumps or rooftop solar panels but offers few details. Low-income earners received pledges of assistance but no details about what that means.

Indeed, there was only one clear element in this murky potion: homeowners would be required to get an energy audit before selling their residences. Mr. Smitherman defends these audits, which cost about $300 ($150 after a government rebate) as a way of pushing the conservation message, but he understands there will be some kickback. It's open to question whether this is the stuff to provoke a taxpayer revolt but it certainly has the potential, particularly if electricity prices start to rise noticeably. The polls showing that people want a green economy get a whole lot less decisive if this leap forward is linked to a lighter wallet.

And prices will go up. Even the government's own regulators acknowledge this. The chief executive of the Ontario Power Authority warned last week about "more expensive forms of energy" coming on line while the chair of the Ontario Energy Board saw "profound" implications from a new regime where social policy objectives prevail.

Solar power in Ontario has been valued at 42 cents per kilowatt-hour and when it gets priority on the grid it will push aside power generated at natural-gas plants that costs perhaps one-third that price.

Mr. Smitherman estimates that the green energy squeezing out fossil fuels - combined with the $5-billion that will need to be spent on upgraded, "smart" transmission lines - will boost a consumer's annual bill by just 1 per cent.

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Electricity sells in Ontario these days for about 5 cents kw/h. In Germany, which is the government's model because of its robust support of renewable energy, consumers pay more than 20 cents.

How much that gap will be narrowed is anyone's guess until Mr. Smitherman tells us how much he intends to pay for green energy and how much of it he hopes will find its way on to the transmission grid.

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