As I discussed in an
earlier post, Quebec's Minister of Natural Resources struck
a committee and issued a consultation paper last summer as part of
a process expected to result with a new energy policy for Quebec.
The public consultation process was completed last October and the
commission's report is expected in early 2014. Barring any
early elections, a new policy should be released later in 2014.
As outlined in my previous post, the government's objectives
are ambitious and require significant capital. While it is highly
unlikely that any policy objective would be dropped by the current
government, it will be interesting to see the priority and the
resource allocation assigned to each objective.
More generating capacity: Hydro-Quebec (HQ)
will be adding hydro and wind power generating capacity to its
network. HQ will take delivery of the first of four hydro stations
being built on La Romaine river (Romaine-2: 640MW), and at the end
of 2014 will hook up approximately 400MW from eight wind power
projects currently under construction.
New call for tenders: HQ will issue a call for
tenders for an additional 450MW of wind power to be delivered in
2016 and 2017. The registration deadline for the call for tenders
is April 18, 2014, and the bid submission deadline is September 3,
Transmission: HQ wants to increase exports to
the U.S. and will continue openly supporting and working on three
transmission solutions: the Northern Pass project linking Quebec to
Massachusetts via New Hampshire, the Champlain-Hudson Power Express project between
Quebec and New York City, and the New England Clean
Power Link. Although these are long gestation projects subject
to the lengthy U.S. regulatory and political processes, it is hoped
that 2014 will provide regulatory closure and allow the sponsors of
at least one of the projects to begin planning construction and
Price: The current government is of the view
that electricity prices in Quebec are low and lead to waste and
lost government revenue. As of January 1, 2014, the cost of
heritage pool electricity has gone up by 0.8%. In addition, HQ
applied to the Régie de l'énergie for a rate
increase of 5.8%. This increase is historically very high for
Quebec and it is being challenged by consumers and business
Industrial policy: Quebec has been trying for
some time to move away from electricity pricing as a competitive
advantage, preferring instead to focus on supply security and the
green credentials of its electricity. Unsurprisingly, large
electricity users in Quebec have another viewpoint and many have
asked for lower prices in order to remain globally competitive.
With large electricity surpluses predicted until at least 2027,
anemic 2014 and 2015 economic growth predictions relative to the
U.S. and the rest of Canada, and the very possibility of an early
election in 2014, there is little doubt that the government will
have to accede to these demands.
Cap-and-trade: As of January 1, 2014
California and Quebechave harmonized their carbon markets. This is
a North American first and should serve as a valuable test bed for
future markets. It will also infuse much needed liquidity in the
Quebec carbon market.
More exploration: The Quebec government and
the two major National Assembly political parties have a
longstanding bias in favor of Quebec oil. Quebec's yearly
petroleum import bill stands at around $14 billion. Domestic oil
production would greatly improve Quebec's economic picture. To
this end, Quebec will allow oil exploration to proceed in Gaspesie
and Anticosti Island without lengthy prior environmental impact
Oil and Gas Legislation: Currently, oil and
gas exploration and production is a legislative afterthought in
Quebec. There is strong consensus that the sector needs a proper
legislative and regulatory framework, and it is anticipated that
the Minister of Natural Resources will propose legislation in the
first half of 2014.
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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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