On September 6, 2012, the Nova Scotia Utility and Review Board
(the "Board") denied Nova Scotia Power Inc.'s request
for authorization to recover some or all of the embedded fixed or
stranded costs should municipal electric utilities seek to become
market participants and use the Nova Scotia Open Access
Transmission Tariff (OATT). Since the Board approved the OATT in
2005, the municipal electric utilities have had the right to opt
out of purchasing electricity from Nova Scotia Power Inc. (NSPI)
and instead take transmission service under the OATT.
In its decision, the Board found that the imposition of a
substantive cost payment upon the municipalities would jeopardize
their ability to pursue third party electricity supply. The
Board's decision was based in part on the review of a 2005
Consensus Proposal filed with the Board prior to its approval of
the OATT, in which NSPI accepted the risk that the municipalities
might exit the system without contributing to stranded costs.
In Nova Scotia, the price signal does create an incentive for
municipal electrical utilities to go to market. In Québec,
however, the price signal does not have the same effect, yet nine
municipalities and one cooperative have the status of market
participants owning networks, and are able to purchase electricity
from third parties other than Hydro-Québec. The Act
respecting municipal and private electric power systems empowers
all municipalities to establish and manage an electricity system.
Also, the possibility of becoming a market participant in
Québec is not limited to municipalities that already own an
Read the Nova Scotia Utility and Review Board's decision.
Atlantic Provinces and the creation of a new Regional
Transmission Organization (RTO)
On September 10, 2012, the Atlantic Energy Gateway (AEG), an
initiative intended to enhance power utilities cooperation in
Atlantic Canada, published and presented eight studies to the
ministers of energy of the four Atlantic Provinces.
The studies explored a unique opportunity in Canada to create a
new Regional Transmission Organization (RTO) between the four
Atlantic Provinces, enhancing regional cooperation and efficiencies
for market participants and regional power utilities alike. The
studies identified a number of benefits that could be achieved
through an RTO, including cost efficiencies, greater diversity in
clean and renewable energy supply, and enhanced stability for
ratepayers and lower greenhouse gas emissions.
The AEG's studies present a unique opportunity for multiple
provinces in Canada to consider the growing need for an RTO. The
benefits would be potentially significant if applied to existing
scenarios such as Newfoundland and Labrador's development of
new generation and transmission lines linking the Island to
Labrador; Nova Scotia's Emera in the construction of a
transmission line enabling the transmission of
electricity from Labrador to New Brunswick and abroad; the
challenges faced by New Brunswick Power; and the potential of
integrating wind power from Prince Edward Island. All of these
elements point to the need to have a regional approach, enabling
optimization of the investments in infrastructure and minimizing
the issues faced by many market participants.
Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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