Ontario gets its hands dirty
Hydro deal powered by U.S. coal
Ontario taxpayers will soon be part-owners of one of the biggest coal-fired power plants in America west of the Mississippi River, making money off pollution in the U.S. Northwest that would be illegal to emit at home.
That’s business, and when the government goes into business, money talks.
It’s part of the package in Hydro One’s multibillion-dollar purchase of Avista Utilities, which the former Ontario government property announced Wednesday. Now that the province has sold 60 per cent of what used to be the transmission arm of Ontario Hydro, it’s looking for acquisitions and partnerships and it found a big one. Between them, they’ll be a $32-billion company, with Hydro One paying $6.4 billion to make Avista a subsidiary once the deal closes in 2018.
Avista is based in Spokane and it distributes electricity and natural gas in Washington state, Oregon, Montana and Idaho, with an outpost in Alaska.
Hydro One is on the far side of the continent and the two companies’ territories don’t come close to overlapping but Hydro One figures that, combined, the two can save money on bulk purchasing and combining back-office stuff like computer systems.
What’ll be new for Hydro One is that Avista is also in the powergenerating business. It’s mostly in hydroelectricity and gas, but it also has a share in Montana’s Colstrip coal-power plant, a 2,100-megawatt station in a 2,200-person town that exists pretty much only to strip-mine coal and burn it.
Avista likes the reliability coal provides, at a relatively stable price, as a backup when the weather’s dry and its river dams aren’t producing.
What they do at Colstrip would be against the law in Ontario. In 2015, after closing the last of this province’s coal plants by government order, the Liberals passed a law outlawing them. Coal exhaust is dirty and loaded with carbon dioxide, the major greenhouse gas contributing to climate change, and we never, ever wanted to go back to it.
“Climate change is not a distant threat — it is already costing the people of Ontario,” the government said at the time. “It has devastated communities, damaged homes, businesses and crops and increased insurance rates. The cost of inaction is far too high.” Now, we’ll profit off it. According to the Environmental Protection Agency, the Colstrip plant emits about 13.5 megatonnes of carbon dioxide each year; closing all of Ontario’s coal plants cut our emissions by about 30 megatonnes. Colstrip is the 15th-largest greenhouse-gas emitter in the United States; a story in the Billings Gazette last year said it burns a railcar load of coal every five minutes. Retrofitting the remaining generating units to capture carbon dioxide is a billion-dollar job and would still cut emissions by less than half.
Avista only owns a piece of the Colstrip plant, which it shares with five other power companies, and the two oldest of Colstrip’s four generating units are due to close in five years, thanks to a lawsuit over pollution.
But as far as our government’s concerned, well, we have our rules and Washington and Montana have theirs.
“We hope that other jurisdictions will follow our leadership in this step to tackle climate change,” said James Berry, a spokesman for Energy Minister Glenn Thibeault. “The future generation mix for the company will be a business decision made by the company in light of whatever policy directives the respective U.S. governments put in place.”
Anything else, he said, is Hydro One’s business.
“The majority of Avista’s electricity generation derives from renewable resources, including hydropower, wind and biomass energy,” Hydro One vice-president Ferio Pugliese said in a written statement, flatly ignoring questions about how owning a coal plant squares with Ontario’s attitude toward pollution.
He pointed to a compilation of statistics by the Natural Resources Defense Council that found Avista is one of the cleaner major energy producers in the United States, which is true as far as it goes but is just another way of saying that much of the company’s power comes from hydro. The same data shows that by the standards of major power companies’ coal plants, Avista’s is a dirty one, emitting more carbon dioxide than average for every watt it produces.
Washington state is broadly anti-coal because of pollution, but Montana is broadly procoal because of jobs; Montana’s governor, a Democrat, excoriated the plan to close the two old generating units and fought Washington efforts to make importing coal power harder. There’s no way Montana is legislating Colstrip off the map.
Thibeault’s argument that it’s not our business is essentially the argument Canada used to justify exporting asbestos for decades after we’d all but stopped using it here. Look, we said, we know it gives people cancer but we’re not going to tell India what to do. We apply the same thinking to importing cheap goods from places with lower wages and worse occupational-safety standards — Bangladesh’s labour standards are Bangladesh’s business. At least Bangladesh’s labour rules apply only in Bangladesh. Colstrip’s pollution does not stay in Colstrip.
But we won’t use our leverage as Hydro One’s largest shareholder to say hey, we think coal power is dangerous to everyone, including us, and as immoral in Montana as it is in Ontario.
That would be difficult. But it would be living up to what are supposedly our values.