Energy utilities around the world are working to re-imagine the fuels and energy services they offer consumers as part of efforts to meet legislated emissions reduction targets. A critical barrier to those efforts in Canada is the utility legislation we have. As currently designed, this legislation restricts Canadian utilities’ ability to deliver on Net Zero by 2050 and other ambitions.
Currently, environmental obligations, including greenhouse gas reductions, are not actively considered in the decision-making process of many utility regulators, governed as they are by the utility legislation in their province or territory. This poses a challenge as Canada and countries around the world continue to set more stringent emission reduction goals. In Canada, over 55% of all the energy used by consumers is delivered on regulated infrastructure, and provincial/territorial economic regulators have a legal obligation to focus on minimizing end-cost to consumers, not reducing emissions. This means that, unless there are legislative and policy changes to permit the accommodation of emissions reduction efforts in utility activities, progress towards environmental targets will continue to be extremely difficult.
To better understand how Canada can reform utility legislation in Canada to accommodate growing environmental obligations, the Canadian Gas Association and Electricity Canada have prepared a study titled: Net Zero: An International Review of Energy Delivery System Policy and Regulation for Canadian Energy Decision Makers. It presents international case studies (Australia, the UK and the United States (New York) and a roadmap for Canada to amend and update utility regulatory policy and legislation. The study was financed by the two associations with support from Natural Resources Canada, and was written by Gattinger and Associates.
Central to the report’s findings is that Canada must prioritize the creation of a task force with a mandate to develop concrete legislative and policy reform. The task force would convene federal, provincial, and territorial policymakers and regulators alongside Indigenous and municipal governments and organizations, industry, civil society and academic leaders to identify policy, legislative and regulatory barriers. The work of such a task force would not supplant existing efforts towards emissions reductions, but rather serve to reinforce, better coordinate, and strengthen them.
Key to the approach that needs to evolve is that it respects the roles of federal, provincial/territorial and municipal governments and the diversity of energy markets across the country. Such a process would be collaborative, transparent and represent the expertise needed to successfully accomplish it.
The findings of this study will be discussed at Electricity Canada’s annual Regulatory Forum held in Vancouver on May 4. Details on the Regulatory Forum can be found here.
QUOTES:
“If Canada wants to achieve the goal of zero carbon emissions by 2050, then energy companies need the freedom to invest in solutions that will help make that happen. We have seen this first-hand with many electricity companies in Canada, who need to do more, faster, to increase the capacity of the electricity grid and reduce greenhouse gas emissions – only for it to be hampered by outdated legislation. This report comes at a critical time. Policymakers in Canada need to pay serious attention to the recommendations of this report, and the examples given from other countries who have made similar legislative changes. Electricity Canada welcomes this new report and the guidance it has to offer.”
– Francis Bradley, CEO, Electricity Canada
“ The natural gas delivery industry has played a foundational role in ensuring Canadians have access to clean, affordable and reliable energy to meet their daily needs for over 100 years. The industry is committed to a culture of constant improvements, and this includes making important investments in enhancing environmental performance and innovation. The recommendations shared in this report will provide key guidance for utilities, policymakers and regulators to ensure that the regulatory environment is modernized in a way that allows th industry to continue to deliver. The natural gas industry is looking forward to continuing to engage all stakeholders to advance energy innovation and reach environmental objectives, all while continuing to put customer needs first.”
– Timothy M. Egan, President and CEO, Canadian Gas Association
About CGA
The Canadian Gas Association (CGA) is the voice of Canada’s gaseous energy delivery industry, including natural gas, renewable natural gas (RNG) and hydrogen. CGA membership includes energy distribution and transmission companies, equipment manufacturers, and suppliers of goods and services to the industry. CGA’s utility members are Canadian-owned and active in eight provinces and one territory. CGA members meet 38 per cent of Canada’s energy needs through a network of over 573,000 kilometres of underground infrastructure. The versatility and resiliency of this infrastructure allows it to deliver an ever-changing gas supply mix to over 7.3 million customer locations representing approximately two-thirds of Canadians. CGA members ensure Canadians get the affordable, reliable, clean gaseous energy they want and need. CGA is also working to constantly improve that gaseous energy offering, by driving forward innovation through the Natural Gas Innovation Fund (NGIF).
About Electricity Canada
Electricity Canada members generate, transmit and distribute electrical energy to industrial, commercial, residential, and institutional customers across Canada every day. From vertically integrated electric utilities, independent power producers, transmission and distribution companies, to power marketers, to the manufacturers and suppliers of materials, technology and services that keep the industry running smoothly – all are represented by this national industry association.
For more information contact:
Aysha Raad
Director, Communications
Canadian Gas Association
news@cga.ca