TABLE OF CONTENTS
REPORTS OF THE STANDING COMMITTEES
AND OTHER COMMITTEES
As Considered by
The Council of the City of Toronto
on April 13, 14 and 15, 1999
BOARD OF HEALTH
REPORT No. 2
1 Changes in Ontario's Electrical Sector and Air Quality
City of Toronto
REPORT No. 2
OF THE BOARD OF HEALTH
(from its meeting on April 6, 1999,
submitted by Councillor John Filion, Chair)
As Considered by
The Council of the City of Toronto
on April 13, 14 and 15, 1999
1
Changes in Ontario's Electrical Sector and Air Quality
(City Council on April 13, 14 and 15, 1999, amended this Clause by striking out and referring Recommendations Nos.
(2)(iv) and (vi) of the Board of Health to the Chief Administrative Officer, viz.:
"(iv) the Chief Administrative Officer be requested to involve the Energy Efficiency Office and the Medical Officer of
Health in City discussions with respect to the development of the proposed shareholders agreements between the City of
Toronto and Toronto Hydro and the Toronto District Heating Corporation, respectively; and
(vi) the Chief Administrative Officer be requested to ensure that adequate resources are available to the Energy Efficiency
Office to investigate measures that could be taken to reduce energy usage;".)
The Board of Health reports, for the information of Council, having:
(1) adopted the report dated March 25, 1999, from the Medical Officer of Health;
(2) directed that:
(i) the report be forwarded to Council for information;
(ii) the report also be forwarded to the Minister of Health and circulated to all Boards of Health across the Province
of Ontario;
(iii) the Commissioner of Urban Planning and Development Services be requested to include Public Health in work
to develop a new Official Plan with respect to energy use and other public health issues;
(iv) the Chief Administrative Officer be requested to involve the Energy Efficiency Office and the Medical Officer
of Health in City discussions with respect to the development of the proposed shareholders agreements between the
City of Toronto and Toronto Hydro and the Toronto District Heating Corporation, respectively;
(v) Toronto Hydro be requested to work cooperatively with the Toronto District Heating Corporation to ensure that
deep lake water cooling takes effect in Toronto; and
(vi) the Chief Administrative Officer be requested to ensure that adequate resources are available to the Energy
Efficiency Office to investigate measures that could be taken to reduce energy usage; and
(3) requested the Medical Officer of Health to report back to next meeting of the Board of Health, scheduled to be
held on May 6, 1999, on:
(i) the recommendations embodied in the communication dated April 6, 1999, from Councillor Jack Layton,
including the health impact of turning down air conditioners in City buildings to maintain an average temperature
of 25 degrees Celsius;
(ii) the feasibility of providing to the Board, on a quarterly basis, an analysis of Ministry of the Environment and
Environment Canada air quality monitoring data for the Toronto region;
(iii) the effect of deep lake water cooling on Toronto's ecosystem; and
(iv) the feasibility of establishing voluntary agreements with key industries that are high energy users.
The Board of Health submits, for the information of Council, the following report (March 25, 1999) from the
Medical Officer of Health:
Purpose:
To examine changes in Ontario's electrical sector and how they could affect air quality in Toronto, as detailed in the
attached technical report, "Ontario's Changing Electrical Sector: Implications for Air Quality and Human Health".
Source of Funds:
Not applicable.
Recommendations:
It is recommended that the Ontario Minister of the Environment and the Ontario Minister of Energy, Science and
Technology:
(1) establish the regulatory framework necessary to ensure that competition in Ontario's electrical sector does not lead to
greater reliance on coal-fired generating stations and further degradation of air quality, human health and the environment in
Toronto and the rest of southern Ontario;
(2) establish annual air emission caps for the entire electrical sector to limit the volume of air pollutants released each year,
ensuring that caps:
(a) apply to companies supplying electricity to Ontario as well as those generating electricity in Ontario;
(b) encompass carbon dioxide and persistent toxins as well as sulphur dioxide and nitrogen oxides to encourage a shift
towards natural gas and renewable energies for the production of electricity;
(c) for the year 2002 be set as follows: 17.5 kilotonnes (kt) for sulphur dioxide, 25 kt for nitrogen oxides, 15,000 kt for
carbon dioxide, 19 kilograms (kg) for arsenic, 9 kg for beryllium, 7 kg for cadmium, 180 kg for chromium, 24 kg for lead,
45 kg for mercury, and 228 kg for nickel, as recommended by the Ontario Clean Air Alliance; and
(d) for 2010, reduce the annual air emissions cap for nitrogen oxides to reflect the cap recommended by the Ontario
Medical Association for coal generated electricity;
(3) establish a renewable energy standard which defines the percentage of electricity that must be generated with renewable
energies by electrical suppliers serving Ontario consumers; and
(4) establish a public benefit fund to support the promotion of energy conservation and the development of renewable
energies with a surcharge on the transmission of electricity.
Background:
At its meeting of September 15, 1998, the Toronto Board of Health requested that the Medical Officer of Health obtain data
from Ontario Hydro on emissions plumed from coal-fired stations, particularly the Lakeview and Nanticoke Generating
Stations, and report back with its findings. This Board of Health report is one in a series of reports which addresses actions
needed to reduce smog in Toronto and the rest of southern Ontario. It has been discussed with the Manager of the Air
Quality Improvement Office in the City Works and Emergency Services Department.
Comments:
This Board of Health request reflects concern about two major changes occurring in Ontario's electrical sector. One change,
the shut-down of a large portion of Ontario Hydro's nuclear division, is a time-limited change that is affecting air quality in
Toronto today, and which will continue to affect air quality until at least the year 2000. The other change, the introduction
of competition to Ontario's electrical market, is a long-term structural change that could have profound impacts on air
quality in Toronto for years to come.
Without the proper regulatory framework, a competitive electrical market could increase the use of coal-fired generating
stations for the production of electricity. This is significant for air quality, human health and the environment because
coal-fired generating stations are major sources of the particulates and ozone that make up smog, acid rain, greenhouse
gases and persistent toxins such as mercury. The Ministry of the Environment has indicated that the current levels of
particulates in Ontario's air are associated with 1800 premature deaths and 1400 cardiac and respiratory hospital admissions
in Ontario each year.
Nuclear Asset Optimization Plan:
In 1997, Ontario Hydro developed the Nuclear Asset Optimization Plan to upgrade the safety and efficiency of its nuclear
facilities. Implemented in the fall of 1997, this Plan has required the closure of seven nuclear units while resources are
directed at the upgrades required in twelve other units. The Plan has shifted a substantial portion of electrical generation to
all five coal-fired plants, including the two plants, Nanticoke on Lake Erie and Lakeview on Lake Ontario, that are upwind
and in close proximity to Toronto. This has resulted in significant increases in air emissions (see Table 1). Air emissions of
sulphur dioxide from all five plants have increased by 68 percent since 1996 while emissions of nitrogen oxides have
increased by 58 percent. This is significant for air quality in Toronto because sulphur dioxide is a precursor of the
particulate portion of smog while nitrogen oxides are a precursor of both the ozone and particulate portion of smog.
Ontario Hydro plans to reduce air emissions over the next few years by reintroducing the upgraded nuclear units beginning
in 2000 and by installing new low NOx burners at the Nanticoke plant before 2000. However, much depends upon the
success of the nuclear recovery program and the extent to which coal-fired plants are used in the new competitive market.
Historically, Ontario Hydro has used its coal-fired plants primarily to meet peaks in demand. In a competitive environment,
Ontario Hydro may feel economic pressure to maximize the use of its coal-fired plants.
Table 1: Air Emissions from Ontario Hydro's Coal-Fired Generating Stations, 1996 and 1998
|
Nitrogen Oxides
*
1996 |
Nitrogen Oxides
1998 * |
Increase |
Sulphur Dioxide
1996 |
Sulphur Dioxide
1998 |
Increase |
| Five Coal Plants |
35.4 kt |
56 kt |
58% |
84.9 kt |
143 kt |
68% |
| Nanticoke |
18.9 kt |
27.5 kt |
46% |
46.2 kt |
78.4 kt |
70% |
| Lakeview |
3.3 kt |
7.8 kt |
136% |
9.6 kt |
18.8 kt |
96% |
Personal Communication, Ontario Hydro, February 1999 * expressed as nitric oxide
Introduction of Competition to Ontario's Electrical Market:
In October 1998, the provincial government passed Bill 35, the Energy Competition Act, which will introduce market
competition to the production of electricity in Ontario. Under Bill 35, private companies in Canada and the United States
will have the opportunity to provide electricity to consumers in Ontario beginning in the year 2000. The intent of Bill 35 is
to provide cost savings to consumers by providing a competitive market in electricity production. It is possible that Bill 35
may provide the market conditions necessary to encourage the development of alternative energies. Without the proper
regulatory framework however, Bill 35 could lead to poorer air quality and poorer health in Toronto by encouraging heavier
reliance on coal generated electricity in Ontario and the United States.
When competition was introduced to the electrical market in the United States in 1992, there was a substantial increase in
power generation from coal-fired power plants, particularly from those with the highest rates of air emissions. In a
competitive market in Ontario, coal-fired plants in the United States may have the advantage because they can produce
electricity at very low prices. Often the lower prices reflect cost savings gained at the expense of the environment. Ontario's
five coal-fired plants currently emit 37 percent less sulphur dioxide, 7 percent less nitrogen oxides, 20 percent less carbon
dioxide, and 76 percent less mercury per unit of electricity than coal-fired generating stations operating in the U.S. midwest.
If some portion of Ontario's electrical needs are provided in the United States, air quality in southern Ontario would be
affected. The Ministry of Environment estimates that approximately 50 percent of southern Ontario's ground-level ozone is
generated as nitrogen oxides in the United States, much of it from coal-fired generating stations in the Ohio Valley and
surrounding states.
Air Quality and Coal-Fired Generating Stations:
When coal is burned to produce electricity, large quantities of sulphur dioxide, nitrogen oxides, carbon dioxide and
persistent toxins such as mercury are released. In 1995, coal-fired generating stations in Ontario were responsible for 22
percent of the Province's emissions of sulphur dioxide, 12 percent of the nitrogen oxides, 18 percent of the carbon dioxide,
and 10 percent of the mercury. In the same year, coal-fired plants in the United States were responsible for 63 percent of
that nation's sulphur dioxide, 26 percent of the nitrogen oxides, 31 percent of the carbon dioxide, and 21 percent of the
mercury. These air pollutants are important contributors to smog, acid rain, global climate change, and the accumulation of
persistent toxins in the environment and the food chain.
Sulphur dioxide is a precursor of both smog and acid rain. It has been estimated that 40 percent of the particulates in smog
are sulphates formed in the air from sulphur dioxide. Air particulates have been linked with increased rates of
hospitalization and death from respiratory conditions and cardiovascular disease at levels as low as 20 micrograms per cubic
meter of air (ug/m3). Air levels of particulates commonly exceed 20 ug/m3 in Toronto and can reach levels as high as
75 ug/m3.
Nitrogen oxides are also a precursor for both smog and acid rain. However, nitrogen oxides contribute to the development
of the ozone portion of smog as well as to the particulates portion. Ground-level ozone has been associated with increased
rates of hospitalizations for asthma, chronic lung disease and respiratory infections at one-hour readings that averaged
31 parts per billion (ppb). Ozone levels in Toronto frequently exceed 80 ppb. For example, they exceeded that level 44
times in 1994.
Carbon dioxide is a greenhouse gas which contributes to global climate change that could affect global temperatures,
weather patterns, water levels, food supplies and patterns of disease around the world. The Intergovernmental Panel on
Climate Change established by the United Nations has indicated that carbon dioxide emissions would have to be reduced by
more than 50 percent in order to stabilize the level of greenhouse gases in the atmosphere at current levels. Canada has
made a commitment to reduce greenhouse gas emissions by 6 percent of 1990 levels between 2008 and 2012. The City of
Toronto has made a commitment to reduce municipal carbon dioxide emissions by 20 percent of 1988 levels by the year
2005, and has made considerable progress towards that goal.
Mercury is a persistent toxin that accumulates in the food chain. It can affect the intellect and behaviour of children exposed
prenatally. It is responsible for 22 percent of the consumption restrictions placed on fish in Lake Ontario and 99 percent of
restrictions placed on fish in inland waters. Canada, Ontario and the United States have made commitments to reduce
mercury emissions to the Great Lakes by 90 percent by the year 2000.
Regulatory and Policy Initiatives:
Regulation 355 promulgated under the Ontario Environmental Protection Act establishes air emissions caps for sulphur
dioxide and nitrogen oxides. It does not apply to any company other than Ontario Hydro. Nor does it apply to air pollutants
other than sulphur dioxide and nitrogen oxides. If Regulation 355 is not amended to include other companies producing
electricity in or providing electricity to Ontario, air emissions related to electrical production will most certainly increase in
a competitive environment.
The review of Regulation 355 provides the provincial government with the opportunity to substantially improve air quality
in Ontario by setting more protective air emissions caps for both sulphur dioxide and nitrogen oxides. By extending air
emission caps to carbon dioxide and seven persistent toxins, including mercury, the provincial government can make
considerable progress towards its smog target for nitrogen oxides and its commitment on global climate change. It would
also encourage a shift away from coal generated electricity towards natural gas, wind and solar generated electricity because
even the "cleanest" coal-fired plants produce large quantities of carbon dioxide and relatively large quantities of persistent
toxins. When electricity is produced with natural gas, emissions of sulphur dioxide and persistent toxins are eliminated
entirely, while emissions of carbon dioxide and nitrogen oxides are substantially reduced. When electricity is produced with
renewable energies, emissions are eliminated entirely.
In a feasibility study commissioned by the Ontario Clean Air Alliance (OCAA), a coalition of 54 organizations including
Toronto Hydro, the Ontario College of Family Physicians, and the City of Toronto, it was demonstrated that the sulphur
dioxide emissions cap for Ontario's entire electrical sector could be reduced by 90 percent (to 17.5 kt) by the year 2002 for a
cost of $1.86 per month for the average residential customer. This could be achieved by shifting a substantial portion of coal
generated electricity projected for that date to natural gas. OCAA has demonstrated that this fuel shifting scenario could
also reduce nitrogen oxides by 57 percent (to 25 kt), carbon dioxide emissions by 37 percent (to 15,000 kt), and emissions
of the seven persistent toxins by 78 percent (to 45 kg for mercury, 19 kg for arsenic, 9 kg for beryllium, 7 kg for cadmium,
180 kg for chromium, 24 kg lead and 228 kg for nickel).
The Ontario Medical Association (OMA) and the OntAIRio Campaign, founded by the Toronto Environmental Alliance,
the David Suzuki Foundation and the Sierra Club, have recommended that nitrogen oxide emissions from Ontario Hydro
and imports should be capped at 3.9 kt (e.g., 6 kt when expressed as nitrogen dioxide). This number was drawn from a
feasibility study conducted by the Institute of Environmental Studies at the University of Toronto and Pollution Probe. (It
does not apply to the non-utility generators in Ontario that emit approximately 12 kt of nitrogen oxides each year.) The
OntAIRio Campaign has indicated that its cap could be achieved by increasing conversion to natural gas, reducing electrical
demand, increasing the use of renewable energies and applying best available control technologies.
In the United States, the federal administration has proposed that its electricity competition plan should be supported by the
establishment of a Renewable Portfolio Standard which identifies the percentage of electricity that electrical suppliers must
generate with renewable energies, and the creation of a Public Benefit Fund to support energy conservation programs and to
promote the use of renewable energies. Similar proposals should be considered by the provincial government.
Conclusions:
Without the proper regulatory framework, the introduction of competition to Ontario's electrical sector could have a
profoundly negative effect on air quality and human health in Toronto. For this reason, it is recommended that the
provincial government establish protective air emissions caps for Ontario's electrical sector that will ensure improvements
in air quality while encouraging a shift to natural gas and renewable energies for the production of electricity.
Contact Name:
Kim Perrotta, MHSc
Environmental Epidemiologist
Health Promotion and Environmental Protection, Toronto Public Health
Tel: 416-392-6788
Fax: 416-392-7418
E-mail: kperrott@toronto.ca
--------
(Report dated March 1999, entitled "Ontario's Changing Electrical Sector:
Implications for Air Quality and Human Health", prepared by
Kim Perrotta, MHSc, Environmental Epidemiologist and
Fe de Leon, Environmental Researcher,
Health Promotion and Environmental Protection, Toronto Public Health)
Acknowledgments:
The authors would like to thank the following people for providing information necessary to the production of this report:
Jack Gibbons, Senior Economic Advisor, with the Ontario Clean Air Alliance; Peter Love, Principal, and Cristina
Giannetas, Consultant, with Lourie and Love Environmental Management Consulting Inc.; Robert Lyng, Senior Advisor,
Environmental Programming, Fossil, and Ann Douglas, Senior Specialist, Environmental Programming, Fossil, with
Ontario Hydro; David Hall, Senior Program Advisor with the Air Policy and Climate Change Branch of the Ontario
Ministry of Environment; Doug Grano and Kimber Scavo with the United States Environmental Protection Agency;
Manfred Klein, Senior Program Engineer, Oil Gas and Energy Branch, Environment Canada; and Karl Hemmerich,
Manager of the Air Quality Improvement Office of Toronto Works and Emergency Services. We would also like to thank
the Acting Manager of the Environmental Protection Office, Steve McKenna, for his role in project initiation and support.
1.0 CHANGES IN ONTARIO'S ELECTRICAL SECTOR:
At its meeting of September 15, 1998, the Toronto Board of Health requested that the Medical Officer of Health obtain data
from Ontario Hydro on air emission from coal-fired stations, particularly from Lakeview and Nanticoke Generating Stations
and report back with its findings. This request reflects concerns about how two major changes in Ontario's electrical sector
may affect air quality. One change, the implementation of the Nuclear Asset Optimization Plan, is a time limited change
that is currently affecting air quality in Toronto, and which will continue to affect air quality until at least 2000. The other
change, the introduction of competition to Ontario's electrical market, is a long-term structural change that could have
profound impacts on air quality in Toronto and the rest of Ontario for years to come.
1.1 Nuclear Asset Optimization Plan:
In 1997, Ontario Hydro's Board of Directors developed the Nuclear Asset Optimization Plan (NAOP) to upgrade the
performance and safety of nuclear facilities. The NAOP requires the closure of seven nuclear units while resources are
directed at upgrading the efficiency and safety of the other 12 nuclear units. (Bruce A unit has been shut down since
October 1995.) The NAOP, which came into effect late in 1997, has reduced power generation from the nuclear division by
about 4000 megawatts (MW). It will continue to do so until at least 2001 (Select Committee, 1997).
Since late 1997, the electrical load from the nuclear division has been shifted to the fossil fuels division. In 1998, the five
coal-fired plants and one oil/gas-fired plant in this division generated 34 million of the 145 million MW-hours of electricity
produced in 1998. This represents an increase of 15 million MW-hours from 1996. The increased production from
coal-fired plants has been accompanied by a significant increase in annual air emissions of sulphur dioxide and nitrogen
oxides from all five coal-fired plants and from the two coal-fired plants that are upwind and in close proximity to Toronto,
Nanticoke and Lakeview (see Table 1) (Ontario Hydro, Meeting, February 1999).
Table 1: Air Emissions from Ontario Hydro's Coal-Fired Generating Stations, 1996 and 1998
|
Nitrogen Oxides
*
1996 |
Nitrogen Oxides
1998 * |
Increase |
Sulphur Dioxide
1996 |
Sulphur Dioxide
1998 |
Increase |
| Five Coal Plants |
35.4 kt |
56 kt |
58% |
84.9 kt |
143 kt |
68% |
| Nanticoke |
18.9 kt |
27.5 kt |
46% |
46.2 kt |
78.4 kt |
70% |
| Lakeview |
3.3 kt |
7.8 kt |
136% |
9.6 kt |
18.8 kt |
96% |
Ontario Hydro, Meeting, February 1999 * expressed as nitric oxide
Ontario Hydro expects to maximize energy production from its nuclear reactors when upgrades to those units are
completed. The Pickering units are supposed to be phased into service between 2000 and 2002, while the Bruce units are
supposed to be phased into service between 2003 and 2009. While electrical generation at the coal-fired stations could
decrease once the nuclear units are back on line, Ontario Hydro has indicated that the scenario may look different in a
competitive market. The company will then be hoping to "maximize revenues by optimizing utilization of all of its
generating stations within the environmental and market design restraints" (Ontario Hydro, Meeting, February 1999).
1.2 Introduction of Competition to Ontario's Electrical Market:
In October 1998, the Government of Ontario proclaimed Bill 35, the Energy Competition Act, which introduces market
competition to the production of electricity in the Province of Ontario. Under Bill 35, new companies from Canada and the
U.S. will have the opportunity to supply electricity to consumers in Ontario beginning in the year 2000. The intent of Bill 35
is to provide cost savings to consumers by providing a competitive market in electricity production. It is possible that Bill
35 may provide the market conditions necessary to promote alternative energy sources such as co-generation, and solar and
wind-powered electricity. However, without the proper regulatory framework, Bill 35 could lead to further degradation of
air quality in southern Ontario and eastern Canada.
Under Bill 35, electrical power companies from the U.S. may enter Ontario's electrical market. Many of these companies,
particularly those from the Ohio Valley, are able to produce electricity at very low prices. Many of these facilities in the
U.S. are coal-fired generating stations which produce greater quantities of air pollutants per unit of energy than similar
plants in Ontario. Ontario's five coal-fired plants currently emit 37 percent less sulphur dioxide, 7 percent less nitrogen
oxide, 20 percent less carbon dioxide, 31 percent less particulate matter, and 76 percent less mercury per unit of electricity
than coal-fired generating stations in the U.S. Ohio Valley and Great Lake states (Institute for Environmental Studies,
August 1998).
The introduction of competition to the electrical market in the United States in 1992 has increased the use of electricity
produced in coal-fired plants that have the highest levels of emissions. A report prepared by the Northeast States for
Coordinated Air Use Management demonstrates that several large electric power companies in the mid-western United
States substantially increased their wholesale electricity sales between 1995 and 1996, with increases ranging from 23 to 84
percent. These increases were accompanied by substantial increases in power generation at the companies' highest polluting
coal-fired power plants and resulted in substantial increases in emissions of nitrogen oxides and other air pollutants (Natural
Resources Defense Council, 1998).
This U.S. experience is significant for Ontario residents both for what it demonstrates about a competitive electrical market,
and for its direct implications for air quality in Ontario. Trans-boundary pollution from the mid-western U.S. contributes
significantly to smog and acid rain in Ontario. Estimates indicate that 50 percent of the ozone that affects Ontario in the
summer is generated as nitrogen oxides in the U.S. and that 90-95 percent of the sulphates that are deposited as acid rain in
southwestern Ontario are generated as sulphur dioxide in the U.S. (Ontario Ministry of Environment and Energy, 1996;
Acidifying Emissions Task Group, 1997). Given that air emissions have increased in mid-western U.S. as a result of
competition in the U.S. electrical market, it can be assumed that air quality, the environment and human health in Ontario
have been, and will continue to be, adversely affected. Furthermore, given that reliance on coal-fired generating stations has
increased since competition has been introduced to electrical generation in the U.S., the same can be expected to occur in
Ontario unless regulatory action is taken to actively discourage it.
1.2.1 U.S. Experience: Renewable Energies and Energy Conservation:
Before market competition was introduced in the U.S., electrical utilities in that country spent $6 to $7.5 billion in 1995 for
"public-purpose programs" such as energy efficiency, renewable energy generation, and low-income assistance. Under the
cost-cutting pressures created by competition, many companies have reduced their investments in these programs because
of the belief that the programs place them at a disadvantage in a competitive environment (Institute for Environmental
Studies, August 1998).
The U.S. federal government has responded to this trend by announcing a comprehensive electricity competition plan which
proposes, among other things: (1) the establishment by the U.S. EPA of a nitrogen oxides emissions cap and trading system;
(2) the preparation of a Ruling which requires the disclosure of information related to issues such as air emissions by
suppliers of electricity; (3) the adoption of a federal Renewable Portfolio Standard be adopted which requires that electricity
sellers ensure that a certain percentage of their electricity sales are generated with renewable energies such as wind, solar,
biomass or geothermal technologies; and (4) the creation of a Public Benefit Fund of $3 billion per year to fund consumer
education programs, energy efficiency programs, and the development of renewable energies (U.S. Department of Energy,
March 1998).
1.2.2 Ontario: Stranded Debt and the Viability of Renewable Energies:
Under the Energy Competition Act, Ontario Hydro will be divided into three companies. Two will be commercial
enterprises: Ontario Power Generation (formerly identified as Genco) which will own and operate power generation
facilities, and Ontario Hydro Services Company (formerly identified as Servco) which will own and operate the
transmission and distribution systems. One will be a non-profit organization: the Independent Electricity Market Operator
(IMO), which will dispatch power on the new electrical market in Ontario (Ontario Hydro, Meeting, February 1999).
The extent to which alternative energies such as wind, solar and co-generation, will be able to compete with Ontario
Hydro's two successor companies will depend upon decisions made by the provincial government about the way to divide
Ontario Hydro's accumulated debt of $39 billion. In order to keep Ontario Power Generation viable, it has been decided that
some portion of Ontario Hydro's debt must be declared "stranded" and will be born equally by all consumers as a surcharge
on all electricity that enters the electrical distribution system (Ontario Ministry of Finance, 1998).
Currently, estimates for the stranded debt range from $10 to $30 billion depending on a number of factors, including the
value given to the nuclear facilities. If the value of the stranded debt is set too low, Ontario Power Generation will not be
viable. If the value of the stranded debt is set too high, Ontario Power Generation will be able to produce power at an
artificially low price and alternative energies will not be able to compete in the marketplace. When City Council considered
the issue at its December 16, 1998 meeting, it recommended to the provincial government that a gradual approach be used
when estimating the stranded debt for Ontario Hydro to ensure that competitors, including those offering renewable energy,
are not placed at an unfair disadvantage (Toronto Works and Emergency Services, November 4, 1998).
2.0 AIR QUALITY AND COAL-FIRED GENERATING STATIONS:
When coal is burned to generate electricity, large quantities of sulphur dioxide, nitrogen oxides, carbon dioxide and
persistent toxins are released into the atmosphere. In 1995, coal-fired generating stations in Ontario were responsible for 22
percent of the Province's emissions of sulphur dioxide, 12 percent of the nitrogen oxides, 18 percent of the carbon dioxide,
and 10 percent of the mercury. In the same year, coal-fired generating stations in the U.S. were responsible for 63 percent of
that nation's sulphur dioxide, 26 percent of the nitrogen oxides, 31 percent of the carbon dioxide, and 21 percent of the
mercury (see Table 2) (Institute for Environmental Studies, January 1998). Sulphur dioxide and nitrogen oxides are both
precursors for acid rain and smog. Carbon dioxide is a greenhouse gas which contributes to global climate change.
Persistent toxins are toxic substances such as mercury which can accumulate in the environment and in the food chain.
Table 2: Emissions Contributed by Coal-Fired Generating Stations in 1995
|
Sulphur Dioxide |
Nitrogen Oxides |
Mercury |
Carbon Dioxide |
| Ontario |
22%
(74 kt) |
12%
(43 kt) *** |
10%
(484 kg) ** |
18%*
(15,387 kt) |
| United States |
63% |
26% |
21% |
31% |
Institute for Environmental Studies, January 1998.
* in 1990 ** kilograms (kg) *** expressed as nitrogen dioxide1
1 Organizations can express nitrogen oxides as nitric oxide or nitrogen dioxide which can affect the figures provided as volumes. Nitrogen dioxide can be
converted to nitric oxide by multiplying by 30/46.
2.1 Acid Rain: Sulphur Dioxide and Nitrogen Oxides:
In the last two decades, great strides have been made in both Canada and the U.S. to reduce acid rain caused by emissions of
sulphur dioxide. Between 1980 and 1996, the seven eastern provinces of Canada (including Ontario) reduced their sulphur
dioxide emissions by 46 percent to 1,700 kt per year, while the U.S. reduced its sulphur dioxide emissions by about 30
percent to 16,500 kt per year in 1995 (Acidifying Emissions Task Group, 1997).
The Acidifying Emissions Task Group, established on behalf of the Environment and Energy Ministers of the federal,
provincial and territorial governments in Canada, has determined that much more must be done about acid rain. In its 1997
report, "Towards a National Acid Rain Strategy," the Task Group indicates that, with full implementation of the Canadian
and U.S. programs for acid rain, 800,000 square kilometers of land and 95,000 lakes in southeastern Canada will receive
harmful levels of acid rain in the year 2010. In order to protect eastern Canada from acid rain, the Task Group concluded
that sulphur dioxide emissions in both Canada and the U.S. would have to be reduced by 75 percent from current emission
caps.
The Task Group estimated that a 75 percent reduction in sulphur dioxide emissions in both Canada and the U.S. could
prevent approximately 13,000 deaths and 5 million asthma symptoms days in Canada over a 15-year period. The Task
Group estimated that the 75 percent reduction scenario could be worth $32 billion in health effects avoided in Canada over
a 15-year period (Acidifying Emissions Task Group, 1997).
The Task Group has also reported that acid rain resulting from emissions of nitrogen oxides may be undermining the
benefits from controlling sulphur dioxide emissions. While sulphur dioxide emissions have been reduced substantially in
the past 20 years on both sides of the border, nitrogen oxide emissions have remained the same, at 2 million tonnes per year
in Canada, and 20 million tonnes per year in the U.S. (Acidifying Emissions Task Group, 1997).
2.1.1 Action Identified for Sulphur Dioxide:
The Acidifying Emissions Task Group has recommended that Canada and the U.S. should reduce sulphur dioxide emissions
by 75 percent beyond their existing caps. For Ontario, the 75 percent reduction would result in an emission cap of 221 kt for
sulphur dioxide from all sources. If the 75 percent reduction were applied to Ontario's electrical sector, the emission cap for
sulphur dioxide would be reduced to 43.75 kt per year.
2.2 Smog: Sulphur Dioxide and Nitrogen Oxides:
As major contributors of nitrogen oxides and sulphur dioxide, coal-fired plants contribute to smog in two significant ways.
First of all, nitrogen oxides react with volatile organic compounds in the atmosphere to produce ground-level ozone, one of
the two major components of smog. Secondly, both nitrogen oxides and sulphur oxide interact with other elements in the
atmosphere to produce sulphates and nitrates, which contribute to the particulate portion of smog.
Particulates are solid and liquid particles that are small enough to be inhaled into the lungs. The particulate portion of smog
can be composed of road dust, acid mists such as nitrates and sulphates, and metals such as mercury and lead. It has been
estimated that about 25 percent of inhalable particulates (those smaller than 10 microns or PM10) and 40 percent of
respirable particulates (those smaller than 2.5 microns or PM2.5) are sulphates that have been derived from sulphur dioxide
(Ontario Ministry of Environment and Energy, 1996).
2.2.1 Ozone: Hospital Admissions:
Smog is strongly influenced by weather. In the summer, when it is sunny, hot and dry, ozone levels are high and can trigger
smog alerts. In the winter, particulates form the main component of smog. Both ground-level ozone and particulates have
been associated with a broad range of health effects. Several large scale studies have demonstrated a highly significant
relationship between low readings of ground-level ozone and hospital admissions for asthma, chronic lung disease, and
respiratory infections. In one study conducted in 16 cities across Canada, increased hospital admissions were documented
with maximum ozone readings that averaged 31 parts per billion (ppb). These findings are significant for Toronto residents
because ozone levels in Toronto frequently exceed the one-hour air quality criterion of 80 ppb. For example, ozone levels in
Toronto exceeded 80 ppb, 44 times in 1994 (Ontario Ministry of Environment and Energy, 1996; Ontario Ministry of
Environment and Energy, 1995).
2.2.2 Particulates: Hospital Admissions and Mortality:
A number of large scale studies have linked particulates (PM10) with asthma, pneumonia, respiratory and cardiac disease,
hospital admissions and premature mortality. When researchers summarized data from eight U.S. studies which examined
the relationship between short-term increases in inhalable particulates and death rates, they found that for every 10 ug/m3
increase in PM10, there was a 1 percent increase in the overall death rate, a 1.4 percent increase in the cardiovascular death
rate, and a 3.4 percent increase in the respiratory death rate. These increases were seen at PM10 concentrations just above 20
ug/m3. In a Toronto study, hospital admissions for general respiratory conditions and asthma increased 3.4 percent and 2.1
percent respectively for each 10 ug/m3 increase in inhalable particulates. As with mortality, increases in hospital admissions
were observed at PM10 concentrations just above 20 ug/m3. These findings are significant for Toronto because air levels of
PM10 commonly exceed 20 ug/m3 and can reach levels as high as 75 ug/m3 (Ontario Ministry of Environment and Energy,
1996; Ontario Ministry of Environment and Energy, 1995).
2.2.3 Smog: Pyramid of Health Effects:
While it has long been recognized that high levels of smog can aggravate a wide range of serious health problems including
bronchitis, asthma and other respiratory diseases, there is a growing body of evidence which indicates that healthy people,
particularly children, are affected by relatively low levels of ozone (Steib, 1995; Ontario Medical Association, 1998). It is
generally accepted that air pollution produces a pyramid of health effects ranging from severe, uncommon events (i.e.,
death) at the top of the pyramid to mild, common events (eye, nose and throat irritation) at the bottom of the pyramid. In
between these two extremes are a range of health effects including hospitalizations for respiratory and cardiac distress,
reduced lung function, and an increased rate of respiratory infections, with the less severe effects affecting larger numbers
of people. The pyramid model helps to illustrate that the increased death rates and hospital admissions that are relatively
easy to measure, represent a very small portion of the overall burden that poor air quality places on human health (Steib,
1995).
2.2.4 Action Identified for Nitrogen Oxides in Ontario:
The Ontario Ministry of Environment has set an air quality target for Smog. By 2015, there is to be a 75 percent reduction in
the number of times that the 80 ppm criterion for ozone is exceeded using 1990-1994 as the base years. In order to achieve
the Air Quality Target, it has been estimated that nitrogen oxide and volatile organic compound emissions must be reduced
by 45 percent of 1990 levels by the year 2015 (Ontario Ministry of Environment, 1998).
In 1991, Ontario Hydro made a voluntary commitment to reduce its nitrogen oxide emissions to 38 kt by the year 2000. In
1996, Ontario Hydro emitted 36 kt of nitrogen oxide emissions2. In 1998, nitrogen oxide emissions increased to 56 kt
reflecting Ontario Hydro's increase reliance on coal-fired plants during those years. Ontario Hydro plans to achieve its
nitrogen oxide target by 2000 by upgrading the low NOx burners at the Nanticoke plant. In 1998, the Nanticoke plant
emitted 27 kt of nitrogen oxides. When the new low NOx burners are installed, Ontario Hydro expects that Nanticoke will
emit 30 percent fewer nitrogen oxides per MW-hour of electricity produced. However, the emission reductions gained with
the new low NOx burners will be off-set by increased utilization of the plant. Nanticoke is expected to produce about 20
million MW-hours of electricity in 2000 compared with 10.4 million MW-hours in 1996 (Ontario Hydro, Meeting). Hydro's
ability to meet its nitrogen oxides target in 2000 will depend upon the success of its nuclear recovery plan.
2 These numbers are expressed as nitric oxide.
2.2.5 Action Identified for Nitrogen Oxides in the U.S.:
In the fall of 1998, the U.S. government passed a Rule entitled, "Final Rule Requiring Regional NOx Reductions in the
Eastern U.S." This Rule aims to reduce ground-level ozone by reducing nitrogen oxide emissions in 22 U.S. states and the
District of Columbia by the year 2007. Each of the affected jurisdictions must develop a State Implementation Plan by
September 1999 which outlines the measures that will be taken to meet the assigned state budget for nitrogen oxides by
2003. When the Rule is fully implemented, it is expected to reduce nitrogen oxides from those 23 jurisdictions by about 28
percent in the ozone seasons (U.S. Environmental Protection Agency, 1998).
While each jurisdiction is free to determine the mix of control measures necessary to meet its nitrogen oxide budget, the
EPA has suggested that significant reductions could be achieved in a cost effective manner if an emission rate of 0.15
pounds per million BTU (or 1.5 pounds per MW-hour) were applied to large electrical generating stations. The U.S. EPA
has estimated that nitrogen oxide emissions from the electrical sector in the 23 jurisdictions could be reduced by 64 percent
if the recommended emission rate is adopted by all 23 jurisdictions (U.S. Environmental Protection Agency, Personal
Communication).
Thirty petitions have been filed against the Ruling including petitions from eight states covered under the Ruling and by a
number of utilities. The Government of Ontario, as well as a number of states, have filed in support of EPA's action. Briefs
for those supporting the EPA action must be submitted to the Court by June 1999. There is no injunction against the EPA
and its Ruling at this time (Ministry of Environment, Personal Communication).
2.3 Global Climate Change: Carbon Dioxide:
When fossil fuels such as coal, oil and gas are burned, carbon dioxide is released into the earth's atmosphere. Carbon
dioxide is a greenhouse gas which contributes to global climate change. As the concentration of carbon dioxide in the
atmosphere increases, the mean temperature on the planet is expected to increase. This increase in temperature is expected
to have profound impacts on weather patterns, water levels, air quality and economies around the world. Consequently,
global climate change is expected to have significant impacts, directly and indirectly, on human health.
The direct health effects of global climate change include those associated with increased air pollution, more frequent and
more severe heat waves, and more frequent "extreme weather events" such as tornadoes and ice storms. For example, global
climate change is expected to increase the rate of chronic illnesses such as heart and lung disease that are associated with
declining air quality. The indirect health effects of global climate change are many and varied, and could include a
significant increase in insect-borne diseases such as malaria, an increase in food-borne and water-borne diseases, and food
shortages (Toronto Public Health, 1997).
2.3.1 Action Identified for Carbon Dioxide:
The Intergovernmental Panel on Climate Change, a panel of experts established by the United Nations, has indicated that
global carbon dioxide emissions will have to be reduced by more than 50 percent to stabilize the concentration of
greenhouse gases in the atmosphere at their present levels (McMichael, 1996). At the international conference on global
climate change convened in Kyoto, Japan, Canada committed to reduce greenhouse gas emissions by 6 percent of 1990
levels between 2008 and 2012. The City of Toronto has made a commitment to cut municipal carbon dioxide emissions by
20 percent of 1988 levels by the year 2005, and has made considerable progress towards that commitment (Toronto Public
Health, 1997).
Ontario Hydro has developed a voluntary action plan which commits Ontario Hydro to stabilize its greenhouse gas
emissions at 1990 levels by the year 2000 and to reduce emissions by a further 10 percent by the year 2005. Reporting
trends show that Ontario Hydro's carbon dioxide emissions have increased since 1994 from 18,400 kt to 23,500 kt in 1997.
This reflects the increased reliance on coal-fired plants in recent years due to the temporary closure of several of Ontario
Hydro's nuclear units (Ontario Hydro, Towards Sustainable Development, 1997; Ontario Hydro, Meeting, February 1999).
2.4 Air Toxins: Mercury and Others:
Coal-fired generating stations emit a number of toxic pollutants that are persistent in the environment, including lead,
cadmium, chromium, arsenic, nickel, beryllium and mercury. Lead is a neurotoxin that can affect the mental development of
children at extremely low levels of exposure. Cadmium is toxic to the kidneys, the lungs and the bones, and is present in the
environment in quantities that are considered hazardous to human health. Both lead and cadmium are suspected carcinogens
while chromium, arsenic, nickel and beryllium are well recognized as human carcinogens (Health Canada, 1997;
Government of Canada, 1994; NIOSH, 1990).
As an environmental toxin, mercury is particularly worrisome because of its mobility in the environment. In both its
metallic and inorganic forms, mercury combines readily with organic materials to become organic mercury which can
accumulate in the food chain. Mercury is toxic to birds, mammals and humans upon ingestion. Prenatal life (the embryo and
fetus) is particularly sensitive to the toxic effects of mercury. Organic mercury crosses the placenta and can affect the
development of the brain and nervous system of the fetus. Behavioural changes, reduced intellectual abilities and reduced
motor skills have been observed in children exposed while in utero (Health Canada, 1997). Mercury is responsible for 22
percent of the fish consumption restrictions placed on fish in Lake Ontario and for 99 percent of the restrictions placed on
fish from inland locations in Ontario (Ontario Ministry of Natural Resources, 1997-98).
2.4.1 Action Identified for Mercury:
Mercury is one of four substances identified under the North American Free Trade Agreement to be banned or phased out
by the governments of Canada, the U.S. and Mexico. Canada, Ontario and the U.S. have made a commitment under the
Canada-Ontario Agreement and under the Binational Toxics Strategy to reduce mercury emissions to the Great Lakes by 90
percent by the year 2000. The International Joint Commission (IJC) has called for the virtual elimination of mercury from
the Great Lakes Basin.
3.0 EMISSIONS REDUCTIONS SCENARIOS:
Air emissions from coal-fired generating stations are related to a number of factors: the age of the facility, the quality of the
emission control technology, and the sulphur content of the coal burned. Older plants that have not been upgraded with
newer emission control technologies tend to have higher emission rates for sulphur dioxide, nitrogen oxides and air toxins.
When high sulphur coal is burned, between 5 and 50 pounds of sulphur dioxide can be emitted for every MW-hour of
electricity generated, depending upon the emission control technologies employed. When low sulphur coal is burned,
sulphur dioxide emissions can be reduced below 10 pounds per MW-hour (Institute for Environmental Studies, January
1998).
Emissions of toxic metals such as mercury, chromium, cadmium and arsenic are directly related to the existence of these
metals in the coal. The emissions of these toxins are not reduced by the use of low sulphur coal. Nor are they greatly
affected by emission control technologies directed at sulphur dioxide or nitrogen oxides. As a rule, carbon dioxide
emissions increase when best available control technologies are employed on coal-fired plants because more coal has to be
burned to produce the same amount of electricity. In those situations where the utilization of the plant increases after the
investment is made to upgrade emissions control technologies, carbon dioxide emissions can increase very substantially
(Personal Communication, Environment Canada).
When electricity is generated with natural gas, sulphur dioxide and the persistent toxins are eliminated entirely while carbon
dioxide and nitrogen oxide are reduced substantially. When electricity is generated with renewable energies, air emissions
are eliminated entirely.
3.1 Feasibility Study: North America:
In a study commissioned jointly by the Institute for Environmental Studies (IES) at the University of Toronto and Pollution
Probe, it was determined that sulphur dioxide and nitrogen oxide emissions from coal-fired generating stations in eastern
Canada, Ontario, the northeastern U.S., the Ohio Valley and surrounding states, could be reduced by 80 percent, particulate
emissions by 50 percent and mercury emissions by 50 to 90 percent by 2010, if all of the coal-fired stations were retrofitted
with best available control technologies. Under this scenario, carbon dioxide emissions would only be reduced by 16
percent because even the "cleanest" coal-fired plant produces large quantities of carbon dioxide (see Table 3) (Institute for
Environmental Studies, January 1998).
Table 3: Eastern Canada, Ontario, Northeastern U.S., Ohio Valley and Surrounding States, Emissions Reductions from
Coal-Fired Plants, 2010
|
Sulphur Dioxide
|
Nitrogen Oxides |
Particulates |
Carbon Dioxide |
Mercury |
Other Toxins |
| Best Available
Control
Technologies
(BACT) |
80% |
80% |
50% |
16% |
50-90% |
May increase |
| BACT & shift
older plants off
coal |
90% |
90% |
76% |
61% |
95% |
Will decrease |
Institute for Environmental Studies, January 1998.
If however, all of the coal-fired generating stations built before 1970 were replaced with non-coal-fired stations, and all
other coal-fired stations were retrofitted with the best available control technology, it was determined that carbon dioxide
emissions could be reduced by 61 percent because natural gas produces much less carbon dioxide than coal. Under this
scenario, reductions in sulphur dioxide, nitrogen oxides, particulates and mercury would be much greater as well because
natural gas releases no sulphur dioxide, much less particulate matter, and none of the persistent toxins (see Table 3)
(Institute for Environmental Studies, January 1998).
3.2 FEASIBILITY STUDY: ONTARIO:
The IES study demonstrated that nitrogen oxide emissions from Ontario Hydro's coal-fired generating stations could be
reduced from 48 kt to less than 6 kt3 per year by 2010 if the two plants built before 1969 were closed (i.e., Thunder Bay and
Lakeview) and if the three plants built after 1969 (i.e., Nanticoke, Lambton and Atikokan) were retrofitted with best
available control technologies. In this study, it was assumed that the three remaining plants would produce 14.4 million
MW-hour of electricity and that the best control technologies would result in a nitrogen oxides emission rate of 0.9 pounds
per MW-hour of electricity generated. In 1995, emission rates from Ontario Hydro's five coal-fired generating stations
ranged from 3 to 5 pounds per MW-hour for nitrogen oxides (Institute for Environmental Studies, January 1998).
The Ontario Clean Air Alliance (OCAA), a coalition of 54 organizations including the Canadian Institute of Environmental
Law & Policy, Toronto Hydro, the Ontario College of Family Physicians, and the City of Toronto, commissioned a
feasibility study using data provided by Ontario Hydro, Environment Canada and Natural Resources Canada. This study
demonstrated that in 2014, sulphur dioxide emissions from Ontario Hydro's coal-fired generating stations could be reduced
by 90 percent by shifting 90 percent of coal-generated electricity projected for that date to natural gas (38.6 of 42.5 million
MW-hour). This scenario would reduce emissions of nitrogen oxides by 84 percent, carbon dioxide by about 57 percent,
mercury emissions by 90 percent, and arsenic, beryllium, cadmium, chromium, lead and nickel by 90 percent (see Table 4).
The cost for these reductions was estimated at $1,819 million or $1.86 per month for the average residential customer.
Under this scenario, approximately 3.9 million MW-hours of electricity would still be provided by coal-fired generators
(Ontario Clean Air Alliance, November 1998; Ontario Clean Air Alliance, Letter, February 23, 1999).
3 Expressed as nitrogen dioxide.
Table 4: Ontario, Emission Reductions from Ontario Coal-Fired Plants, 2014
| Scenario |
Sulphur Dioxide |
Nitrogen Oxides |
Carbon Dioxide |
Mercury |
Other Toxins |
| Shifting 90% from
coal to natural gas |
90% |
84% |
57% |
90% |
90% |
Ontario Clean Air Alliance, Spreadsheet, November 1998
When the OCAA added the air emissions from all other sources of electricity in the Province, including those from
non-utility generators, it concluded that air emissions from the entire electrical sector could be capped at the levels
identified in Table 5 by 2002 by shifting 78 percent of projected coal-generated electricity to natural gas (14.3 of 18.3
million MW-hour). This would require building an additional 2,595 MW of gas-fired capacity by 2002. Under this scenario,
approximately 4 million MW-hours of electricity would still be produced by coal (Ontario Clean Air Alliance, Letter,
February 24, 1999):
Table 5: Annual Air Emission Caps for Ontario's Entire Electrical Sector, 2002
|
Pollutant |
Caps |
Pollutant |
Caps |
Pollutant |
Caps |
| Sulphur dioxide |
17.5 kt |
Arsenic |
19 kg |
Chromium |
180 kg |
| Nitrogen oxides |
25 kt |
Beryllium |
9 kg |
Lead |
24 kg |
| Carbon dioxide |
15,000 kt |
Cadmium |
7 kg |
Nickel |
228 kg |
| Mercury |
45 kg |
|
|
|
|
Ontario Clean Air Alliance, November 1998 * expressed as nitric oxide
3.3 Feasibility Study: Lakeview:
In the fall of 1998, Ontario Hydro announced a proposal to produce 550 MW of gas-fired electrical generating capacity at
the Lakeview plant. Ontario Hydro has indicated that this is a proposal and that no commitment has been made to this
project yet. A feasibility study is being conducted to determine if it is financially feasible. Ontario Hydro has indicated that
the gas-fired generating capacity could be added to the coal-fired capacity of the plant or used to displace some of the
coal-fired capacity. If the gas-fired generator is used to displace coal-fired capacity, the proposal could result in reduced
emissions of nitrogen oxide emissions because combined-cycle gas turbines produce 80 percent less nitrogen oxide
emissions than coal-fired generators. If however, the gas-fired generator is added to the coal-fired capacity of the station, the
proposal could increase emissions because the emissions from the gas-fired generator would be added to those from the
coal-fired generator. Ontario Hydro indicated that, in a competitive environment, utilization of this plant could increase in
the future (Ontario Hydro, Meeting, February 1999).
4.0 ONTARIO: REGULATORY AND POLICY ACTIONS:
The Market Design Committee was the group established in January 1998 to provide advice to the Minister of Energy,
Science and Technology on the market rules, powers and responsibilities that any regulatory agency would need to ensure
support for a competitive electrical market. On environmental matters, the Market Design Committee indicated the need:
(1) to establish an air emission cap and trading system; (2) for increased Ministry support to promote consumer energy
conservation programs; (3) to develop a mechanism to verify company claims of "green" power; and (4) for public
disclosure by electrical suppliers on sources of electricity and pollution emissions. In its Final Report, the Market Design
Committee recommended that an environmental panel be established by the Ontario Ministry of Energy, Science and
Technology to implement the above recommendations (Market Design Committee, February 1999).
4.1 Air Emission Caps:
Bill 35 makes only one reference to the Market Design Committee's recommendation respecting air emission caps and
emissions trading. It indicates that the Environmental Protection Act will be amended to allow the development of
regulations that will essentially establish "an emission trading system for environmental and cost benefits". Currently, in
Ontario, there is one regulation which applies air emission caps to the generation of electricity. Regulation 355, established
under the Environmental Protection Act requires that Ontario Hydro limit its release of sulphur dioxide to 175 kt per year,
and its total emissions of sulphur dioxide and nitrogen oxides to 215 kt per year, after 1993. Regulation 355 does not apply
to any other air pollutants emitted by Ontario Hydro. Nor does it apply to any other generator of electricity in or out of the
Province. Consequently, unless Regulation 355 is revised, air emissions related to the production of electricity for Ontario
consumers could actually increase in the future under a competitive electricity market (Select Committee, December 1997).
The Ministry of the Environment is currently reviewing Regulation 355 to determine how best to proceed on this issue. This
review presents the provincial government with the opportunity to improve air quality in Ontario by setting air emissions
caps for sulphur dioxide and nitrogen oxides that are more protective than those which currently exist. By extending air
emissions cap to carbon dioxide and seven persistent toxins including mercury, the provincial government could make
considerable progress towards its smog target for nitrogen oxides and towards its commitment on global climate change. It
would also be encouraging a shift away from coal generated electricity towards natural gas, solar and wind generated
electricity.
4.1.1 Sulphur Dioxide Cap:
The Acidifying Emissions Task Group recommended that Canada and the U.S. should reduce sulphur dioxide emissions by
75 percent beyond existing caps. This recommendation has been adopted by the Toronto Environmental Alliance (TEA), the
Sierra Club, and the David Suzuki Foundation, which have founded a coalition called the OntAIRio Campaign, and the
Ontario Medical Association. The study commissioned by the OCAA has demonstrated that it is financially feasible to
reduce the sulphur dioxide emissions cap for all companies providing electricity in Ontario by 90 percent to 17.5 kt by the
year 2002. This would be achieved by shifting 78 percent of coal-fired electricity projected for that date to natural gas.
4.1.2 Nitrogen Oxides Cap:
The Ontario government has determined that nitrogen oxide levels in Ontario must be reduced by 45 percent of 1990 levels
by the year 2015 in order to reduce the number of times that the health based criterion for ground level ozone is exceeded.
Given that Ontario's coal-fired generating stations were responsible for 12 percent of Ontario's nitrogen oxide emissions in
1995, and that its share of those emissions has increased in the past two years due to an increased reliance on coal-fired
plants, it is fair to seek greater reductions in this sector.
In a 1998 position paper on air quality, the OMA recommended that Ontario Hydro's voluntary commitment to nitrogen
oxide reductions should be replaced with a regulation which would limit emissions from Ontario Hydro and imported
electricity to no more than 6 kt annually. The OntAIRio Campaign has recommended that nitrogen oxide emissions from all
companies providing electricity to Ontario consumers (excluding non-utility generators) should be capped at 6 kt by 2005.
The 6 kt4 recommendation is based upon the feasibility study conducted by IES. The OntAIRio Campaign is promoting the
idea that the 6 kt cap can be achieved with a mix of policy initiatives including an aggressive energy conservation program
to reduce the demand for electricity, the promotion of renewable technologies, fuel conversion, and the application of best
available control technology (Toronto Environmental Alliance, Personal Communication).
The OCAA maintains that nitrogen oxide emissions from all companies producing electricity in Ontario (including
non-utility generators) could be reduced to 25 kt5 by the year 2002 by shifting 78 percent of coal-fired electricity to natural
gas. It assumes that 12 kt of nitrogen oxide emissions would be produced by what are currently considered non-utility
generators, that 3 kt would be emitted from the new gas-fired generators, and that another 10 kt would be produced by the
remaining coal-fired generators. When the 12 kt estimate for non-utility generators is added to the 6 kt recommendation
(which is 3.9 kt when converted to nitric oxide) the difference between the OCAA cap and the OMA cap is only 9.1 kt of
nitrogen oxides (when expressed as nitric oxide).
4 Expressed as nitrogen dioxide
5 Expressed as nitric oxide
4.1.3 Carbon Dioxide Cap:
The Intergovernmental Panel on Climate Change, established internationally, has indicated that global carbon dioxide
emissions would have to be reduced by more than 50 percent to stabilize the concentration of greenhouse gases in the
atmosphere at their present levels. Toronto has committed to reduce greenhouse gas emissions by 20 percent of 1988 levels
by 2005, and has made considerable progress towards that goal. In 1990, coal-fired plants in Ontario were responsible for
18 percent of the carbon dioxide emissions in Ontario at 15,387 kt. By 1997, carbon dioxide emissions increased by about
50 percent to 23,50 kt due to increased reliance on coal-fired plants. The OCAA study demonstrated that, by shifting 78
percent of coal-fired electricity to natural gas, carbon dioxide emissions could be reduced by 48 percent to 9,200 kt by 2002.
When emissions from existing non-utility generators are added to these emissions, the total carbon dioxide emissions in
2002 would be 15,000 kt.
4.1.4 Mercury, Persistent Toxins Caps:
Ontario, Canada and the U.S. have made a commitment under the Canada-Ontario Agreement and under the Binational
Toxics Strategy to reduce mercury emissions to the Great Lakes by 90 percent by the year 2000. The IJC has called for the
virtual elimination of mercury from the Great Lakes Basin. The OntAIRio Campaign has asked the provincial government
to commit to the virtual elimination of mercury emissions by 2005. The OCAA study has demonstrated that air emissions of
mercury and six other persistent toxins from Ontario's electrical sector could be reduced by 78 percent by 2002 by shifting
78 percent of coal-fired generation to natural gas.
4.1.5 Recommendations:
Given that it appears technically and financially feasible to reduce emissions of sulphur dioxide, nitrogen oxides, carbon
dioxide, mercury, arsenic, beryllium, cadmium, chromium, lead and nickel from the entire electrical sector to 17.5 kt, 25 kt,
15,000 kt, 45 kg, 19 kg, 9 kg, 7 kg, 180 kg, 24 kg and 228 kg respectively, and the compelling human health and
environmental arguments in favour of doing so, it is strongly recommended that the provincial government move to adopt
these levels recommended by the OCAA as air emission caps for Ontario's electrical sector for the year 2002.
Furthermore, it is recommended that a reduced annual air emission cap for nitrogen oxides be established for the year 2010,
which reflects the cap recommended by the OMA for coal generated electricity.
4.2 Promote Energy Conservation and Renewables:
Bill 35 captures the Market Design Committee's recommendation respecting energy conservation and renewables with
rather vague language. It indicates that it will be the Ontario Energy Board's (OEB) responsibility "to facilitate energy
efficiency and the use of cleaner, more environmentally benign energy sources in a manner consistent with the policies of
the Government of Ontario." The OEB should examine the Renewable Portfolio Standard and the Public Benefit Fund
proposed by the U.S. Administration when developing a strategy to ensure that energy conservation and renewable energies
are promoted in the new competitive market place.
4.3 Disclosure of Information:
Several sections of Bill 35 have captured the Market Design Committee's recommendations respecting disclosure of
information. The Ministry of the Environment is considering developing regulations that require energy producers to report
on 28 air pollutants. At this time, the Ministry does not know whether it would have the legal authority to apply these
regulations to electricity producers in the U.S. It is seeking a legal opinion on that issue. The Ministry may initiate a
consultation process to discuss the nature of the information to be disclosed and the process by which disclosure occurs
(Ministry of Environment, Personal Communication).
The Ministry of Energy, Science and Technology under the Ontario Energy Board Act is developing regulations for energy
labeling. It is the Ministry's intent to ensure that information on environmental emissions is provided to allow consumers to
make environmentally informed choices (Ontario Ministry of Energy, Science and Technology, Personal Communication).
The effectiveness of these regulations will depend however upon details that have not yet been developed.
5.0 UNITED STATES: REGULATORY ACTION:
In 1998, the OMA recommended that electrical generators in the U.S. should not be allowed to release more than 0.15
pounds of nitrogen oxides per million BTU of electrical power generated, and that no exemptions should be allowed for
older plants. The emission rate recommended by OMA is the same rate recommended for coal-fired plants by the U.S. EPA
in its proposed Rule for nitrogen oxides. The U.S. EPA considers this rate to be cost-effective for large electric generators
while providing improvements in air quality during ozone seasons (Ontario Medical Association, 1998; U.S. Environmental
Protection Agency, Personal Communication).
The 0.15 pound per million BTU emission rate is the equivalent of 1.5 pounds per MW-hour which is more than 50 percent
greater than the 0.9 pounds per MW-hour emission rate applied in the feasibility study conducted by IES. The U.S. EPA
emission rate does, however, represent a substantial reduction in the emission rates of companies currently operating in the
U.S. According to the National Resources Defense Council, the 10 top producing electrical companies in the U.S. are
currently performing at emissions rates ranging from 5.5 to 10 pounds per MW-hour (National Resources Defense Council,
1998). The U.S. EPA recommended emission rate is also much lower than the current emission rates for Ontario's five
coal-fired plants of 3 to 5 pounds per MW-hour. If the U.S. EPA successfully defends its proposed Rule for nitrogen oxides,
it could substantially improve air quality with respect to ground level ozone. However, a great deal depends upon how the
23 affected jurisdictions implement the federal Rule.
Before the U.S. EPA announced its Rule for nitrogen oxides, the OMA recommended that the Canadian government, the
Ontario government or an appropriate municipal government should petition the U.S. EPA Administrator to use Section
115 of the U.S. Clean Air Act to require the sulphur dioxide and nitrogen oxides reductions necessary in the U.S. If the U.S.
EPA successfully defends its proposed Ruling for nitrogen oxides and its 1.5 pounds per MW-hour emission rate is adopted
by a number of the 23 jurisdictions, the U.S. will be moving ahead of Ontario on air quality related to its electrical sector.
For this reason, it is recommended that all levels of government monitor the progress of the U.S. EPA Rule to determine
what actions, if any, should be taken in the future to encourage action on air emissions in the U.S.
6.0 SUMMARY OF RECOMMENDATIONS:
It is recommended that the Ontario Minister of the Environment and the Ontario Minister of Energy, Science and
Technology:
(1) establish the regulatory framework necessary to ensure that competition in Ontario's electrical sector does not lead to
greater reliance on coal-fired generating stations and further degradation of air quality, human health and the environment in
Toronto and the rest of southern Ontario;
(2) establish annual air emission caps for the entire electrical sector to limit the volume of air pollutants released each year,
ensuring that caps:
(a) apply to companies supplying electricity to Ontario as well as those generating electricity in Ontario;
(b) encompass carbon dioxide and persistent toxins as well as sulphur dioxide and nitrogen oxides to encourage a shift
towards natural gas and renewable energies for the production of electricity;
(c) for the year 2002 be set as follows: 17.5 kilotonnes (kt) for sulphur dioxide, 25 kt for nitrogen oxides, 15,000 kt for
carbon dioxide, 19 kilograms (kg) for arsenic, 9 kg for beryllium, 7 kg for cadmium, 180 kg for chromium, 24 kg for lead,
45 kg for mercury, and 228 kg for nickel, as recommended by the Ontario Clean Air Alliance; and
(d) for 2010, reduce the annual air emissions cap for nitrogen oxides to reflect the cap recommended by the Ontario
Medical Association for coal generated electricity;
(3) establish a renewable energy standard which defines the percentage of electricity that must be generated with renewable
energies by electrical suppliers serving Ontario consumers; and
(4) establish a public benefit fund to support the promotion of energy conservation and the development of renewable
energies with a surcharge on the transmission of electricity.
References:
Acidifying Emissions Task Group, Towards a National Acid Rain Strategy, Submitted to the National Air Issues
Coordinating Committee, October 1997.
Environment Canada, Manfred Klein, Senior Program Engineer, Oil, Gas & Energy Branch, personal communication,
March 18, 1999.
Government of Canada, Canadian Environmental Protection Act: Priority Substances List Assessment Report Cadmium and
its Compounds, 1994.
Health Canada, Great Lakes Health Effects Program, State of the Knowledge Report on Environmental Contaminants and
Human Health in the Great Lakes Basin, Edited by D. Riedel, N. Tremblay and E. Tompkins, 1997.
Institute for Environmental Studies, University of Toronto, and Pollution Probe, Environmental Protection in a Competitive
Electricity Market in Ontario: Analysis of Environmental Policy Options, August 1998.
Institute for Environment Studies, University of Toronto, and Pollution Probe, Emissions From Coal-Fired Electric
Stations: Environmental Health Effects and Reduction Options, January 18, 1998.
Market Design Committee, List of Recommendations from Second Interim Report, Chapter 5, website address
http://www.omdc.org/NewHomePage.html dated February 15, 1999, p. 20.
McMichael, A.J. et al.,Task Group of the World Health Organization, the World Meteorological Organization, and the
United Nations Environment Programme, Climate Change and Human Health, WHO, Geneva, 1997.
NIOSH, U.S. Department of Health and Human Services, NOSH Pocket Guide to Chemical Hazards, June 1990.
Natural Resources Defense Council, Benchmarking Air Emissions of Electric Utility Generators, June 1998.
Ontario Clean Air Alliance, Letter from Jack Gibbons, dated February 24, 1999.
Ontario Clean Air Alliance, Letter from Jack Gibbons, dated February 23, 1999.
Ontario Clean Air Alliance, Emissions Reduction Study, including spreadsheet, Prepared by Diener Consulting Inc. in
association with Acres International Limited, Toronto, Canada, November 1998.
Ontario Clean Air Alliance, Electricity Competition and Clean Air, April 1998.
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February 11, 1999.
Ontario Hydro, Lakeview Neighbours: News from the Lakeview Generating Stations, Spring/Summer 1998.
Ontario Hydro, Towards Sustainable Development: 1997 Progress Report, 1997.
Ontario Medical Association, OMA Ground Level Ozone Position Paper, Prepared by J. MacPhail, T. Broadway, C.
Jacobson, and P. North, 1998.
Ontario Ministry of Environment, Steering Committee Report, Ontario's Smog Plan: A Partnership for Collective Action,
January 1998.
Ontario Ministry of Environment, David Hall, Senior Program Advisor, Air Policy and Climate Change Branch, personal
communication, February 16 and 18, 1999 on Disclosure Information.
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Ontario Ministry of Energy and Environment, Towards a Smog Plan for Ontario, June 1996.
Ontario Ministry of Energy, Science & Technology, Chris Cincar, Senior Economist, personal communication, February 11,
1999.
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Ontario Ministry of Natural Resources, Guide to Eating Ontario Sports Fish, 1997-98.
Sang, S. and B. Lourie, Mercury in Ontario: An Inventory of Sources, Uses and Releases, Prepared for Pollution Probe,
September 1996.
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Submitted to Speaker of Legislative Assembly in December 1997.
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Canadian Respirology Journal, Vol. 2 No. 3, Fall 1995.
Toronto Environmental Alliance, John Wellner, personal communication, February 24, 1999.
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August 1996.
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1999.
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The Board of Health also had before it during consideration of the foregoing matter the following communication (April 6,
1999) from Councillor Jack Layton, Don River:
(i) recommending that:
(1) all City of Toronto building managers be requested to immediately turn down the air conditioners in City buildings so
that the average temperature is 25 degrees Celsius, except in buildings where medical and other circumstances require a
different temperature;
(2) the City of Toronto call on all building owners, tenants and anyone else responsible for controlling temperature in
buildings to turn down the air conditioning so that the average air temperature is 25 degrees Celsius;
(3) The Medical Officer of Health and the Energy Efficiency Office approach the Building Owners and Managers
Association (BOMA) to develop a "Dress Cool, Breathe Well Challenge" that is paid for by a percentage of the savings
from reduced energy bills that come from participants involved in this initiative; and
(4) the Medical Officer of Health, in conjunction with the Energy Efficiency Office, calculate the potential reduction in
CO2 emissions and other harmful pollutants from a city-wide reduction in air conditioning use; and
(ii) forwarding Toronto Hydro's Green Energy Position Paper, which includes a commitment to having 5 percent of
customer load being met by renewable sources of energy by the end of 2002.
Ms. Kim Perrotta, Environmental Epidemiologist, Health Promotion and Environmental Protection, Toronto Public Health,
gave a presentation to the Board of Health on the foregoing report.
The following persons appeared before the Board of Health in connection with the foregoing matter:
- Mr. Jack Gibbons, Ontario Clean Air Alliance;
- Councillor John Adams, Midtown; and
- Councillor Jack Layton, Don River.
Respectfully submitted,
JOHN FILION
Chair
Toronto, April 6, 1999
(Report No. 2 of The Board of Health was adopted, as amended, by City Council on April 13, 14 and 15, 1999.)
