Estimates of Ontario's electricity reserves 'miscalculated'

TORONTO - Jun 8 - By Steve Erwin

Ontario's electricity reserves are going to be "much tighter" than originally forecast this summer and next because a group that monitors the province's energy system "miscalculated" figures in previous forecasts, government sources said Thursday.

The errors by the Independent Electricity System Operator will likely force the government to keep at least some of its four coal-fired plants open for longer than originally anticipated because the province hadn't planned for the "supply crunch" to be as bad as it is, sources told The Canadian Press.

"It will put new pressure on them to extend the lives of the coal plants," a source said. "The numbers that everybody's been playing with are wrong."

In March, the IESO acknowledged that it had previously underestimated demand for the summer of 2006 by 1,200 megawatts, and overestimated available supply by some 900 megawatts - a 2,100-megawatt gap.

A government official said the IESO will admit Friday that the gap between supply and demand is nearly double that - more than 4,000 megawatts.

As a result, Ontario government officials are facing a summer of air conditioners running full out with much less generation capacity than anticipated.

The shortage will mean more expensive power imports from neighbouring provinces and the United States.

Liberal officials are also extremely concerned about the impact the revised figures will have on electricity supply next summer - just before the October 2007 election.

"There's a high level of tension" among government officials, a source said. "It's another crisis they didn't need."

The miscalculations apparently stem from a underestimation of peak summer demand periods. A source said previous IESO analysis showed daily demand patterns similar to those in winter: a peak early morning period followed by a steady decline throughout the day. In reality, hot weather forces air conditioners to operate almost all day, making the peak daily period in summer that much longer.

Also, the IESO miscalculated how much supply can be generated from hydroelectric dams during summer as water levels recede over the day, a source said.

IESO spokesman Terry Young wouldn't disclose early details of the report being released Friday, but said it will continue to question the Liberals' promise to phase out the coal plants.

The February report suggested the Lambton station south of Sarnia and the Nanticoke facility in southwestern Ontario should continue to be staffed and functional in the event of future electricity shortages.

Keeping them open later could prove politically difficult for Premier Dalton McGuinty, who a year ago was criticized by his political opponents for delaying the closure of Nanticoke to 2009 instead of 2007 as first promised.

The Thunder Bay, Atikokan and Lambton stations are scheduled to close by the end of 2007.

The Lakeview coal facility in Mississauga, west of Toronto, closed down in April 2005. Much of the plant is being demolished on Monday by explosives.

The IESO informed the government about the forecasting errors several weeks ago. A source said the forecast problems were the chief reason behind the delay of the government's long-awaited response to a December report that recommended new nuclear reactors for the province.

That report by the Ontario Power Authority called for some $70 billion in electricity generation projects over the next two decades.

"They're busy trying to come up with a directive for the OPA that will work, and suddenly people come in and say things are going to be tighter this summer than you thought they were, and they're going to be tighter next summer than you thought they were, and oh by the way, you have an election next summer," a source said.

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