FINAL REPORT - International Joint Commission

U.S. Dollars
ANNEX 2
Figure E-1: Short-term electricity price forecasts
Electricity production
Electricity production at the Massena-Cornwall power project is affected by both Lake Ontario levels and
Lake Ontario outflows. Up to a point, higher flows result in more electricity production, but above the
maximum efficiency point (approximately 8,450 m3/s (298,400 ft 3 /s)), increasing flows have diminishing
returns. Also, higher Lake Ontario levels generally result in greater station head at Moses-Saunders, which
is also linked to greater electricity production. Furthermore, Lake Ontario levels have an effect on the
efficiency with which a given flow produces energy. So there is a direct relationship among level, flow and
power production. The TWG produced two algorithms to capture this relationship—one for the OPG side
of Moses-Saunders and one for NYPA’s side. Each algorithm uses the quarter-monthly flow and Lake
Ontario level to calculate the electricity produced (in MWh) for that quarter-month.
Lake Ontario levels also affect electricity production at the Moses and Beck generating stations. Since
Moses and Beck are located on the Niagara River above Lake Ontario, higher lake levels actually reduce the
station head at Moses-Beck, which results in less energy production. Lower lake levels have the opposite
affect. In order to capture this effect, the Technical Work Group provided an algorithm that calculates
quarter-monthly electricity production at Moses-Beck based on Lake Ontario levels and other inputs.
Electricity production at the Beauharnois-Cedars complex is primarily dependent on Lake Ontario outflows.
Larger flows generally result in more energy production, but flows above about 7,500 m3/s (264,900 ft 3 /s)
produce electricity less efficiently. The Hydro Québec representative on the TWG developed an algorithm
for calculating electricity production at Beauharnois-Cedars based on Lake Ontario outflows and other
inputs. That algorithm was programmed into the SVM.
The value of electricity production
The market value of electricity varies through the year because of seasonal shifts in demand for energy.
Electricity tends to be more valuable during the winter heating season and the summer cooling season, but
less valuable in the spring and fall. Regulation plans that produce more electricity in the summer and/or
winter will tend to yield greater economic benefits. The quarter-monthly electricity prices produced by
Synapse Energy Economics Inc. were used in the SVM to determine the value of electricity produced under
different regulation plans. Those prices were applied to the electricity production from both Moses-Beck
and Moses-Saunders.
Options for Managing Lake Ontario and St. Lawrence River Water Levels and Flows
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