by Jim Burpee
February 7, 2012 - We at the Canadian
Electricity Association have publicly raised, many times, that our
electricity sector faces a complex challenge over the next two
decades.
In order to meet Canada's increasing demands for electricity, we
must invest in electricity infrastructure.
That means renewing, replacing and adding to the generating
stations and power lines that power the economy. According to the
Conference Board of Canada, we must invest almost $300 billion, or
about $15 billion per year, if we are to maintain reliability, make
our power supply even cleaner, and adopt advanced technologies.
It's also essential that electricity remain not only affordable
for consumers, but a competitive advantage for Canada. Right now,
Canada is in the enviable position of having average power rates
that are below those of most countries. This helps drive our
economic development, and allows our communities to prosper.
If we are to successfully renew our electricity system, however,
we must improve our ability to make timely decisions on what, where
and how to improve the system. It comes down to improving our
decision-making structure by increasing regulatory efficiency.
Governments have a legitimate and
important role to play in overseeing the electricity system. They
set the rules by which the electricity sector and other sectors
operate. This helps to ensure that there is compliance with
environmental protection laws and regulations, consumer protection,
and public and worker safety.
The key is to ensure these laws and regulations are as efficient
as possible. Why? Because it has a major bearing on the
affordability of the electricity we produce and distribute to
customers and on the reliability of our system.
Electricity infrastructure projects are subject to many pieces
of legislation and regulation, at both the federal and provincial
levels. Various agencies and departments have different mandates
and jurisdictional obligations. Sometimes regulations can be overly
complex and duplicate what is required elsewhere. This sometimes
results in a lengthy approval process.
Regulatory duplication and inefficiency have been cited by
various experts in business and government as a greater impediment
to infrastructure renewal than other issues such as fiscal
constraints.
For example, at an event co-sponsored by Canada 2020 and the
Canadian Electricity Association in Ottawa in recent months, former
Deputy Prime Minister and Minister of Finance, John Manley, now
head of the Council of Canadian Chief Executives, noted the
plethora of government levels and departments involved in
regulation. This increases regulatory costs and complexities, he
said, while encouraging inefficiency and slowing approvals.
At the same event, TD Bank Senior Vice President and Chief
Economist, Craig Alexander, stated that major projects now need at
least 10 years for approvals and construction, greatly increasing
risks for proponents. In particular, he characterized the current
costs of long regulatory approvals as enormous for our society.
The electricity sector needs a clearer and more predictable
regulatory and policy environment if it is to achieve success in
accomplishing the infrastructure renewal needed between now and
2030.
"Success" can be defined as affordability, continued high levels
of supply reliability, and an electricity system in which 90 per
cent of our electricity generation emits no greenhouse gases.
What must governments do to increase the efficiency of
regulation?
Years ago, the federal government established the Major Projects
Management Office. MPMO is committed to reducing the current
average regulatory review for major resource projects from four
years to two. This is a step in the right direction.
So is the review of the Canadian Environmental Assessment
Act (CEAA). Stakeholders such as the Canadian Electricity
Association and the Canadian Hydropower Association made formal
comments before a House of Commons Committee hearing on improving
regulatory efficiency under CEAA.
At the CEAA hearings, the Canadian Electricity Association
recommended that the environmental assessment process be guided by
the "one project, one assessment" principle, with the assessment
being led by the best-placed jurisdiction.
This would lead to avoiding duplication between the federal and
provincial environmental assessment process through equivalency
agreements. The CEAA would only be triggered where it can bring
added value, and the focus would be on the key issues.
We also advocated that there must be greater consistency between
assessments and authorizations; that timelines must be improved;
and that assessments consider both the benefits of a project along
with environmental impacts - in effect, adopting more of a
sustainable development approach to evaluation.
Canada has an on-going challenge with respect to renewing its
electricity infrastructure for the 21st century. We
must continue to have affordable, reliable, and clean power for our
homes, businesses and industries.
Greater regulatory efficiency is a prerequisite if Canada is to
achieve its prudent and crucial electricity goals.
Jim Burpee is the newly appointed President and Chief
Executive Officer of the Canadian Electricity Association. He will also
be a Speaker at the GLOBE 2012 Conference in Vancouver, March
14-16. See below.
With billions of dollars being invested globally into Smart Grid
technology, the industry is rapidly diversifying its product and
service offerings that include advanced metering, demand response,
home/building energy management, distribution grid management, and
grid interconnection and monitoring. At GLOBE 2012, taking place
March 14-16, 2012, experts from across North America will explore
new developments in the smart grid sector including regulation,
security risks, infrastructure bottlenecks, innovative
partnerships, and emerging technologies.
Confirmed Participants:
Bruce Dudley, Senior Vice President, The Delphi
Group, Canada (Moderator)
Jon Arnold, Managing Director, Worldwide Power
& Utilities, Microsoft Corporation, USA
Jim Burpee, President & CEO, Canadian
Electricity Association, Canada
Eric Deschenes, Vice President, Infrastructure
Business - Schneider Electric Canada, Canada
Annabelle Lee, Technical Executive - Cyber
Security, Electric Power Research Institute (EPRI), USA
Gary Murphy, Chief Project Officer, Smart
Metering & Infrastructure, BC Hydro, Canada
Check here for more information on
GLOBE 2012