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Conference examines benefits of Ontario’s electricity deregulation

Toronto, ON -- March 13, 2002 -- Numerous leading energy experts from across North America provided compelling arg...


Toronto, ON — March 13, 2002 — Numerous leading energy experts from across North America provided compelling arguments on the long-term benefits of a competitive electricity market for consumers, industry and the environment at the EnerCom 2002 energy conference, held Feb. 26-27, 2002, in Toronto.

Many of the 51 speakers also clarified the structure of the new market and the roles and responsibilities of its participants, to more than 700 energy industry representatives, regulators and government officials who attended the third annual event.

The conference, developed by a committee of executives from the energy community, featured 14 sessions covering a range of topics and an exhibition of 26 companies and associations in the energy marketplace.

In his keynote luncheon address, David McFadden, Q.C., partner, Gowlings Lafleur Henderson, and co-chair of the Electricity Transition Committee, tackled myths that have developed around the competitive market opening.

First, McFadden emphasized that restructuring of the Ontario electricity system is often inaccurately referred to as ‘deregulation.’ "The Energy Competition Act has not introduced deregulation but has put in place a system of independent regulation for the electricity sector," he explained. "There is certainly no shortage of regulation and oversight through the Ontario Energy Board or the Independent Market Operator to ensure the proper operation of the market and to protect consumers."

Second, he attempted to debunk the myth of competition leading to higher electricity prices by citing examples from the United Kingdom, Germany, Finland and parts of the United States, such as New York and Pennsylvania, where prices dropped significantly in the wake of a competitive market.

McFadden also praised organizations involved in restructuring of Ontario’s electricity market, such as the Stakeholders Alliance for Electricity Competition and Customer Choice, for involving a full array of participants and commended the provincial government for mandating stakeholder involvement particularly when the "path to the competitive electricity market was not as straight or as rapid as we originally expected."

He concluded by predicting a positive environmental outcome. "Competition will encourage the development of innovation, whether it is through energy efficiency systems or the introduction of distributed generation, power cells, wind power and other forms of environmentally-friendly technology," he explained. The alternative, "lack of competition," he cautioned, "will tend to choke off new development in the face of an unfriendly playing field."

Also, a panel discussed the degree of competition when the market opens on May 1. Lauri Gregg, director of energy, Falconbridge Inc., called for acceleration of the sale of power generating assets owned primarily by Ontario Power Generation. "It is robust competition that I am looking for, and robust competition will be constrained," he said.

Ontario Power Generation (OPG) has almost 80% of the electricity production market in Ontario and must, under the new legislation, reduce its ownership to 35% during the next 10 years. Gregg wants to see this happen before the deadline. "We need to send a signal to the would-be new entrants that we are going to have competition here to compete on a level playing field with OPG. And really, assets have to be sold more rapidly," he told the audience.

On the last day of EnerCom, a panel of CEOs, including representatives from Bruce Power, Westcoast Energy, Hydro One, Mirant Americas East Region, OPG, Enbridge Consumers Gas and Toronto Hydro Corporation, discussed the implications of the new energy market. Ron Osborne, CEO, OPG, compared staying with your current electricity supplier versus switching to a new electricity marketer as the difference between opting for a "variable" mortgage or switching to a "fixed" one. Overall, he urged people to be informed consumers.

Next year, EnerCom 2003 will be held from March 4 to 5, 2003 at the Metro Toronto Convention Centre. Visit www.enercom.to for details.