Dow Jones Energy Service
October 27, 2000
TORONTO -(Dow Jones)- Atlantic Canada should aim for a regional power market as it moves toward liberalization, rather than doing things province by province, an energy industry thinktank said Friday.
"An interjurisdictional market reduces the grip of politicians," as seen in the experience of PJM and Australia, said Tom Adams, executive director of Toronto-based Energy Probe. A broader market will also have practical advantages, including spreading out set-up costs, Adams said.
Speaking before a electricity deregulation conference in Halifax, Adams detailed the ongoing trials of deregulation in Ontario and mistakes Atlantic Canada shouldn’t repeat.
"Several deficiencies of the Ontario market reform process relate directly to the problem of politicians no wanting to lose their power," Adams said. He pointed, for example, to the Ontario government’s failure to privatize the successor companies of the old Ontario Hydro monopoly, and the decision to retain directive power over the Ontario Energy Board.
As reported Thursday, east coast utilities including New Brunswick Power Corp. (X.NBP) and Nova Scotia’s Emera Inc. (T.EMA) are discussing forming an eastern Canada regional transmission organization that may also include Maine.
It is also important, Adams said, to define a public-interest mandate for power liberalization, because electricity reform processes are easily co-opted by interest groups such as major industrial power customers and selected producers.
Reformers should also work to develop investor confidence, Adams said, pointing to the Californian and Alberta markets which have seen slow investment in new supply. He warned that Ontario is at risk for the same problem.
Investors will be attracted by real competition, financial accountability and arm’s length regulation, in practice, not just words, Adams said.
The Halifax conference comes when New Brunswick, for one, is preparing a comprehensive energy policy that will include direction for electricity competition in the province.