‘Utilities lose nothing . . . customers pay less’
Electricity customers would save money if utilities throughout the region pooled their energy, say a pair of Maine consultants.
Gordon Weil and Ross McEacharn have produced a report that urges the four Atlantic provinces to create a regional power pool.
“This is the most practical thing they can do which does not disturb the current ownership and control of generation,” Weil said Tuesday in an interview from Harpswell, Maine.
“The utilities lose nothing and the customers pay less.”
The study, written for the Atlantic Institute for Market Studies, said the power pool would centre on an independent central dispatch that would allow provinces to share their energy.
Such a system would lower fuel costs for customers by basing generation on the lowest-cost energy available in the region at any one time.
The power pool would also improve efficiency and reliability, the institute’s report concluded.
Weil estimated the power pool could initially save customers as much as five per cent on their energy costs.
“It’s small — not a huge decrease in cost. But it’s going in the right direction.”
The savings would grow over time as utilities add more transmission capacity, making it easier to move electricity around, the consultant said.
Utilities would still own generating plants and transmission systems. Their capital and operating costs would also continue to be covered by their own customers.
“It wouldn’t affect who owned what generator. It would affect what generator was being run at any given moment.”
The study comes at a time politicians and utility officials have been talking about more Atlantic co-operation in the electrical sector.
Weil said ratepayers in Nova Scotia, which primarily relies on coal in its power plants, would benefit from cheaper forms of electricity, such as hydroelectric, available in New Brunswick and Newfoundland and Labrador.
Nova Scotia is also going to have to start importing more power over the next 20 years as it phases out coal-fired generation, he said. Prince Edward Island is in a similar situation, Weil said.
“If you’re going to be dependent on an outside supply, this works very well.”
The pool would also give Newfoundland and Labrador another customer for the hydroelectricity that will come from the Lower Churchill project at Muskrat Falls, he said.
Weil said the pool model would be less complex and costly than a market-driven one, which would involve opening up power generation to third-party suppliers. The market system has been used in other areas, including New England, and has drawn mixed reviews.
“There’s no evidence showing that the market has produced lower cost,” said Weil, who also recently wrote a report on the Muskrat Falls megaproject for the Halifax think-thank.
“From the customers’ point of view, it hasn’t produced any measurable benefit.”
Energy Minister Charlie Parker said the province fully supports regional co-operation in the electric sector.
Parker said he and his Canadian counterparts met in September to discuss the topic. Several recently released report on regional co-operation are now being studied and worked on by Energy Department staff, he said.
“The reports indicate that Atlantic regional collaboration provides an opportunity to save hundreds of millions for energy ratepayers,” Parker said via email.
He said the Lower Churchill project is a prime example of regional co-operation.
“Lower Churchill and related regional co-operation will help all four provinces maximize their renewable energy resources.”