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Lowering Electricity Prices Through Market Integration

Lowering Electricity Prices Through Market Integration. Pierre-Olivier Pineau Professor , HEC Montréal Chair in Energy Sector Management. SESSION 2 - Energy Costs - How to Address Higher Power Costs Policy & Solutions Forum Windsor-Essex Regional Chamber of Commerce

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Lowering Electricity Prices Through Market Integration

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  1. Lowering Electricity Prices Through Market Integration Pierre-Olivier Pineau Professor, HEC Montréal Chair in Energy Sector Management SESSION 2 - Energy Costs - How to Address Higher Power Costs Policy & Solutions Forum Windsor-Essex Regional Chamber of Commerce May 15th, 2014 – Windsor

  2. Residential Price Ontario & Québec 1.27¢/kWh 6¢ 14.9¢/kWh 8.9¢/kWh 7.2¢/kWh

  3. ElectricityConsumption per Capita by AverageIndustrial Price (2012) Hydro provinces Statistics Canada (2014)

  4. Whydoes Québec have sucha lowenergyprice? • Average cost of a kilowatthour= 2.09¢ (2012) → Cheap hydropower • “Native load commitment”: obligation to sell electricity at a regulated price to local consumers

  5. National Energy Program (1980-1984) Main elements of the program: • a blended “made-in-Canada” price of oil consumed in Canada: $18.50 versus $35 (Sept. 1980 world price) • a petroleum and gas revenue tax of 8% on all production of oil and gas in Canada • a federal share of petroleum production income rising from 10 to 24% Scarfe (1981) and Bregha (2013)

  6. Nordpool Statnett(24-04-2014 22:10)

  7. How can reason prevail over history? • Think of a Canadian energy framework • Electricity • Greenhouse gases • Oil & gas (i.e. pipelines) • Assess the benefits of such a framework • Explain – Educate – Engage

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