The contracts Ontario has developed for natural gas-fired supply are the basis for my methodology in estimating costs.
The Calculator has a very high figure for what it references as "baseload" natural gas. This refers to the existing non-utility generators (NUGs) - these are legacy contracts (dealt with at end).
The basis of all the generation that has come online since about the turn of the century (some contracted retoactively) is the net revenue requirement. The contracts between the generators and the Ontario Power Authority are hard to get details on, but there's a couple of sources I've found helpful.
The first is the Original 2005 Ministry of Energy news release when the contract was awarded for the Mississauga generation station cancelled during 2011's election campaign - which in hindsight spells out plants are contractually guaranteed to get a return on their investment, and the stipulation that most perspective profits above that guaranteed level would benefit ratepayers - the combination of the two means really these are capacity contracts where the fuel cost of generation is a flow-through expense to the consumer.
The contract structure is based on a contingent support payment, with all new generation priced through Ontario's competitive electricity market. The contract winners are assured that they will have sufficient ongoing revenue to meet their fixed project costs, such as capital and financing, if they operate efficiently according to the pre-agreed standards. When market revenues exceed these fixed-cost requirements, the contracts stipulate that 95 per cent of the surplus will flow back to ratepayers. The proponents that submitted proposals under this RFP each bid a "Net Revenue Requirement" (NRR), which includes all fixed project costs. The weighted average NRR that was bid by the six selected proponents is about $7,900 per megawatt-month.
Updated figures leaked out with information from the recent 'scandals' related to the cancellation/relocation of plants planned for Oakville and Mississauga; one e-mail communication stated "The average benchmark NRR for Ontario’s gas fleet is $13,187 MW/Month" - which is the basis for the annual revenue requirement in the calculator.
The default value for the cost of natural gas of $5/MMBtu is essentially the U.S. EIA forecast
NUGS
The estimate of the NUG's is based on an assumption they contracts are 'must take' all generation at cost of ~$120/MWh.
The million dollar estimate looks shocking, but it simply assumes high production levels at around that price, without breaking out a separate fuel cost.
As with other generation sources with 'must take' contracts, the cost is more usefully seen as a capacity payment than by the levelized unit cost. Approximately 30% of all hours in 2013 Ontario's demand will not require any generation from natural gas or coal-fired generation, but the non-utility generators will either continue to generate or, for the weekends where they are curtailed I've assumed they are paid anyway (this is only done when surplus generation will run for days because the contracts are now held by the Ontario Electricity Finance Corporation as they were signed by the extinct Ontario Hydro).
Alternatively the annual capacity payment could be lower, with a fuel charge for the generation, but some NUG's are co-generation (may be producing steam) and some generate from gas gleaned from pipelines presumably to maintain the pipeline - it's not clear to me the contracts necessarily would break-out the fuel price.