Canada grapples with energy issues


While the Canadian federal government regulates meters under the national Electricity & Gas Inspection Act,  the electricity market is a provincial jurisdiction.

Three provinces – Alberta, Ontario and New Brunswick – have deregulated their wholesale electricity markets. The rest are supplied by traditional utility structures. Several of these, including British Columbia and Quebec, have undertaken automatic meter reading pilots. In May 2002, Ontario opened deregulated markets for both wholesale and retail electricity. Consumers could choose their supplier and prices would float to match supply and demand. The retail market lasted only a few months, during which the wholesale price reached $102.8/kWh Canadian.

Provincial politicians received a record number of calls about high bills. “In May 2002, Ontario opened deregulated markets for both wholesale and retail electricity.” Ontario responded by freezing the retail price of electricity at a level lower than the contract rates offered by some retailers and refunding all proceeds in excess of the regulated rate to consumers, even those served by retailers. The wholesale market was left intact, but since the regulated price was lower than the average wholesale price, the province undertook direct funding of the difference out of general tax revenue. By March 2004, the shortfall had accumulated to $918 million, and continues to grow.

Long term supply is also an issue – generating assets are ageing, almost all will have to be replaced by 2020, including 7.5 GW of coal-fired generation (nearly one-third of the provincial 25 GW demand) that must be retired by 2008 to meet clean air commitments. A widespread blackout in August 2003 piqued interest in adequacy of supply. And there were few suppliers of new generation on the horizon due to uncertainty about market rules and energy policy. Early in 2004, Ontario announced a multi-pronged approach: a new Ontario Power Authority that would
sign long term contracts with generators to ensure adequacy of future supply; a new agency to implement conservation programmes; new energy policy and metering requirements to encourage green, renewable power and facilitate sales by the consumer to the local utility; and … every home in Ontario would receive a smart meter.

The smart meter will facilitate new rate structures. Next day or real time availability of meter readings are expected to facilitate awareness of consumption and encourage a culture of conservation. Two-way communications would also facilitate demand and price response. The implementation schedule was aggressive – 800,000 smart meters by 2007, the remaining 3.5 million by 2010. Twenty or more of Ontario’s 92 municipal utilities undertook automated meter reading pilots using a wide range of systems. And then the brakes came on. On May 4, the provincial government announced the development of enabling legislation widely expected to create a new crown corporation to collect metering data on a standardised open and, as yet, undefined protocol. It is thought that the new corporation might also install, own and operate Ontario’s smart meters. Unsure about the future, most utilities have frozen their smart meter pilots.

“Unsure about the future, most utilities have frozen their smart meter pilots.”

At the national level, requirements for re-verification of electricity meters continue to evolve. In November, Measurement Canada proposed that re-verification tolerances be reduced from 1% to essentially 0.5%. Many observers expect static electronic meters to meet the challenge, and think a significant portion of the existing electromechanical meter population may have to be retired early. Replacement cost could exceed $½ billion. Tolerances for pattern approval remain at 0.75% at five amperes, with wider tolerances
at other loads and power factors.