Generally, the retail price of electricity is lower in Canada, especially in those regions with hydroelectric sources. Exporting power to Canada's southern neighbor has always been a profitable business for several provincial utility companies, which are primarily crown corporations. As a result, the pressure to restructure has been limited.
However, as the competitive rules changed in the U.S., a few provincial governments and utility companies were compelled to re-examine their options to maintaining and expanding their utilities' market share in supplying power to the U.S. The provincial government of New Brunswick, for example, published a task force report titled "Electricity in New Brunswick Beyond 2000". The report recommended options to help position its New Brunswick Power Company to share in the future deregulated markets of New England. Another example was Ontario Hydro, which has had its share of problems with both the operation of and the stranded investments in nuclear power plants similar to many utilities in the U.S. The demand for industry restructuring in Ontario parallels situations in the higher energy cost states of the U.S. where the need for low-cost energy to support local jobs and investments is greater.
Three of Canada's provinces have been at the forefront of utility deregulation. Ontario was the earliest in allowing competition of electric generation by the year 2000, with heated debates throughout the process. A provincial committee recommended in a 1996 report titled, "A Framework for Competition:' that Ontario Hydro be privatized and that retail competition be phased in starting with large industrial customers in 1999. Ontario Hydro publicly opposed the pl an, and proposed a separate plan called "Competition, Convergence, and Customer Choice:' or the "4C" report, which suggested full customer choice for all customer classes by year 2000 without privatizing the utility. The Provincial government thenpublished aNovember 1997 report titled, "Direction for Change - Chatting a Course for Competitive Electricity and Jobs in Ontario:' which later became the basis for Bill 35 1998, or the Energy Competition Act.
Ontario Hydro was later unbundled into three entities: Ontario Electricity Generation Corporation, which is responsible for managing power generation assets; Ontario Electric Services Corporation, which is responsible for power delivery and services; and the Independent Electricity Market Operator, which handles Province wide coordination of power delivery similar to the ISO/PX combination in California. Although competition in electricity generation had begun, no privatization of the utility was planned.
The province of Alberta was a pioneer in establishing a competitive wholesale market of electric generation among its major provincial and municipal utilities. The Department of Energy proposed giving only large industrial customers their choice of electric service providers as of January 1, 1999.
While British Columbia's B.C. Hydro had been a traditional supplier of low cost hydroelectric power to California, a governmental task force proposed a twophased approach to allow 50% of the industrial customers to have choice by 1999, and the other 50% by 200 1. The task force also advocated the creation of the B.C. Grid Company to operate the transmission network and to dispatch power plants for the entire province by year 200 1. The B.C. Utility Commission also considered providing choice to commercial customers.
This article is part of a very informative publication on de-regulation of electrical power that was prepared by Siemens Building Technologies Inc. The complete publication are available from Ludwig Galazka. Ludwig has a few publication left so don't wait too long to get your copy.
First published May 2001
