Provinces Should Exploit Benefits of East-West Electricity Trading: C.D. Howe Institute

Jul 29, 2010 | Government News

Canada needs a “Made-in-Canada” approach to electricity transmission that better exploits the benefits of east-west power trading, according to a study released today by the C.D. Howe Institute. In “Power Sharing: Developing Inter-Provincial Electricity Trade,” Jan Carr, the former CEO of the Ontario Power Authority, explains how to overcome the impediments to electricity trading that currently exist at provincial borders. 

To ensure continued access to US markets, explains Carr, most Canadian provinces have complied with US electricity trading rules. But when transplanted in Canada these rules limit provinces with competitive electricity markets, where electricity customers may choose among suppliers (Alberta and Ontario), in sharing the benefits of trade with their neighbouring monopoly utilities (such as in British Columbia, Manitoba, or Quebec). 

Some provinces rely mostly on hydroelectric generation, while others rely more on fossil or nuclear-fuelled generation. Carr says Canada would benefit from more electricity trading on an east-west axis because the sharing of different forms of electricity generation – and time-zone diversity – would allow better use of each province’s generation capacity. 

Carr makes several specific recommendations for provincial action. He also recommends the federal government support provincial initiatives in the event of NAFTA challenges.

“Provinces that design their own rules for increasing interprovincial trade in ways that do not comply with US electricity regulations, and adopt a “Made-in-Canada” approach to electricity trading,” he writes, “ should be supported by the federal government in any potential NAFTA challenges, to defend their ability to buy and sell electricity in US markets.” 

For the study, go to http://www.cdhowe.org/pdf/commentary_306.pdf 

For more information contact:                                                           

Jan Carr
Phone: 416-865-1904
Email: [email protected]

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