The dominant paradigm in Canadian electricity policy for about a century was that public power, with its government-backed borrowing and tax advantages, would deliver lower cost power than regulated or competition-oriented private alternatives. As many supporters and detractors of public power have recognized, the vulnerability of this model was the risk of politicized business decision making. Adam Beck was reported to have remarked that he sought to build a “band of iron” around Ontario Hydro to protect it from politicians. In Ontario, the governance weaknesses of public power were crystallized with the passage of the Green Energy Act in 2009. In New Brunswick, a similar breakdown in governance appears to be underway, with the opposition Conservative leader Mr. Alward, representing a party currently without an electricity policy, issuing declarations on keeping obsolete generators in service.
Adam Beck had the right idea, but it is up to us to ensure that our energy supply plans are protected from politicians and rent-seeking lobby groups. Energy is much too important to the well-being of society to be left vulnerable to such meddling. Britain and California are good examples of energy market distortion and its consequences.
I think Beck’s idea was fatally flawed. James Conmee preceded Beck in the Ontario legislature and put in place legal protections for private hydro investment that would have served Ontario much better than the scheme Beck put in place by wiping out the rules inspired by Conmee. Beck’s opponent James Mavor was the original thinker who deserves credit for anticipating the eventual collapse of Beck’s scheme. Mavor foresaw and foretold that politicians would meddle, that excessive investment risks would be ignored until too late, and that the accounts would cover up the costs. The Green Energy Act has finally vindicated Conmee and Mavor.
For all its flaws, Britain’s competitive power market has worked pretty well since it was created in the late 1980s, much better than Ontario’s over the same time period. California’s power system today looks like it has a more cheery future than Ontario’s.
If California’s power system has a more “cheery future” than ours, you’ve really got me worried. I came across this comprehensive energy document on the website for the Canadian International Council. http://www.onlinecic.org/
It is entitled “Power Connections: Canadian Electricity Trade and Foreign Policy” by Roger J. Goodman. It discusses long-term plans to sell electricity to the United States, with an emphasis on clean energy. This could explain some of the push behind the GEA.
You will notice that Mr. Gerald Butts, of the WWF, is on the CIC.