FERC`s Canadian decision
In the past few months, several Canadian utilities have applied to the U.S. Federal Energy Regulatory Commission (FERC) for power marketing licenses in order to sell excess capacity across the Canadian/U.S. border. Of these applications, only one has been granted. Another was expected to be decided in May, and two were rejected for not meeting FERC requirements. The FERC decision clearly defines the role Canadian utilities can play in a cross-border market with U.S. companies. The decision may also push regulators in Canada to examine more closely the monopoly structure of utilities under the current system and may lead them to consider changes toward deregulation and competition. Recently, the FERC denied transmission access in the United States to power marketing subsidiaries of Canadian utilities Ontario Hydro and British Columbia (BC) Hydro. While a setback for the utilities, these rulings come after criticism by both Canadian and U.S. independent power producers (IPP) who oppose the current monopoly structure of Ontario Hydro and BC Hydro. Most Canadian electric utilities, including Ontario Hydro, Hydro Quebec (HQ) and BC Hydro, are provincial government-owned monopolies. The control these companies have over the power sector in Canada has hindered activity by IPPs in both countries. In an effort to protect their market shares, some Canadian utilities have apparently worked against competition and restricted or excluded imports of power from the United States. At the same time these companies are seeking to penetrate the U.S. power market with low-cost, subsidized power, which could displace other sources. FERC`s decisions have effectively halted the southward expansion plans of Canadian electric utilities. In addition, FERC`s decisions have set the stage for the breakup and partial privatization of these companies in the wave of deregulation and competition which Canada is facing.
- OSTI ID:
- 577455
- Journal Information:
- Independent Energy, Journal Name: Independent Energy Journal Issue: 5 Vol. 27; ISSN 1043-7320; ISSN IDPEEW
- Country of Publication:
- United States
- Language:
- English
Similar Records
Canada's large hydro: Progressing toward new megawatts
Investors' focus on central Canada's petrochemical industry