18 December 2012

A closed market #nlpoli

The provincial Conservatives will guarantee that taxpayers in Newfoundland and Labrador will be forced to pay for Muskrat Falls no matter what happens to oil prices or with new technology.  They are closing the electrical markets on the island portion of the province so that consumers and businesses in Newfoundland can only buy electricity from Nalcor.

Under  changes to the Electrical Power Control Act, 1994 currently being debated in the House of Assembly, the same provincial Conservatives who fought for years for open access to markets outside the province will close the electricity markets on the island portion of the province to competition.

Section 14.1 (1) of the new bill allows that Newfoundland and Labrador Hydro – a Nalcor subsidiary – will have the exclusive right to “supply, distribute and sell electrical power or energy to a retailer or industrial customer in the province.”

Retailers or industrial customers will only be allowed to purchase electrical power or energy from NL Hydro.  Another clause of the bill prohibits companies from developing electrical power on their own land for their own use.

Under section 14.1 (3),  Newfoundland Power can continue to sell electricity but the company can only buy electricity from Nalcor. 

The Electrical Power Control Act, 1994 currently sets provincial electricity policy and requires the public utilities board to regulate the provincial electricity market in a way “that would result in power being delivered to consumers in the province at the lowest possible cost consistent with reliable service.”

However, other changes to the Act will allow cabinet to dictate electricity prices in the province. 

The changes to the bill ensure that Nalcor can prevent development of cheaper alternatives to Muskrat Falls, including purchasing electricity from outside the province for use on the island.  It also voids any contracts that may exist before the changes come into force.

The amendments to the Electrical Power Control Act, 1994 continue the provincial Conservative’s aggressive moves since 2007 to destroy free markets for electricity in the province wherever possible.  In 2008, the provincial government expropriated hydro-electric generating facilities operated by Abitibi, Fortis, and ENEL.