Ottawa eyes power exports to U.S.

John Spears
Toronto Star
September 7, 2001

Canada has a good chance to develop new electricity sources to supply the power-hungry U.S. market, federal Natural Resources Minister Ralph Goodale told a business audience yesterday.

But an industry critic said it’s less risky to free up power for export by reducing consumption at home.

Goodale himself acknowledged that doing deals with tough U.S. negotiators is far from easy.

“In dealing with the United States, in almost anything beyond saying `good morning’ there are significant challenges,” Goodale told a Toronto Board of Trade breakfast.

But he stressed that the U.S. market is a rich prize for Canada, which already ships 10 per cent of its electricity south of the border.

“It is clear that Canada should expect important new electricity market opportunities in the U.S.,” he said.

“This could be especially valuable in terms of the hydro power potential in Newfoundland, Quebec, Manitoba and British Columbia.

“Almost every province has expressed an interest in pursuing new supply opportunities to meet greater export demand,” he noted.

Goodale said the provinces must devise rules allowing power to move across provincial borders to U.S. markets.

That’s been a vexatious topic in Canada. The classic case is the Churchill Falls development in Labrador, power from which moves largely to the U.S.

Quebec negotiated a long-term deal forcing Newfoundland to sell the power to Quebec – at what is today a very low price – allowing Quebec to resell it at a huge profit.

Speaking to reporters after his speech, Goodale repeated that opportunities abound for Canada as the United States faces an energy shortage.

“They will need new power supply sources, and Canada may be in a very good position to provide some of that.”

Goodale said Canada will insist that Canadian principles of sustainable development must be met in any new deals, and that Canada will maintain its own regulatory systems.

“I do not see us catering to U.S. needs. I see us taking advantage of Canadian opportunities,” he said.

Tom Adams, executive director of Energy Probe, was skeptical of developing big new energy projects to supply the United States.

Financing risks are huge, as energy prices can fluctuate wildly, he said, and environmental risks are also great.

Cutting power consumption in Canada and exporting that surplus makes more sense, he said.

“If Canada was able to realize conservation savings from all the electricity waste that we’ve got going on in this country, we’d have at least a doubling of our export potential to the U.S. without any new facilities,” he said.

Adams also was skeptical that any big new hydro projects will be able to find private-sector financial backing.

 

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