Canada lags U.S. in North American Progress in Electric Competition

Washington, DC -- Two Canadian provinces rank in the top 15 scores of an index measuring progress in electric competition in North America.

But because of heavy government ownership of generation assets, most Canadian provinces and territories have negative scores in the just-released update to the second edition of the Retail Energy Deregulation Index 2001 (RED Index), issued by the Center for the Advancement of Energy Markets (CAEM). On a national basis, Canada lags far behind the U.S.

The latest RED Index update includes Canada for the first time. It shows two provinces, Alberta and Ontario, with scores of 62 and 39, respectively, out of a possible 100. Alberta's score ties for third place in the ranking for North America, and Ontario ranks 14th.

The RED Index Canadian national average is 2 out of a possible 100, compared to the U.S. national average of 17. This demonstrates that a majority of Canadian provinces and territories, with significant government ownership of their energy facilities, have not identified retail restructuring as a priority.

But that's changing, as evidenced by a statement from the government of New Brunswick in January 2001 that the province needs to operate by rules compatible with those set by the Federal Energy Regulatory Commission (FERC) in the U.S.

The California crisis has also affected energy restructuring in Canada, especially in Western Canada. "Not only do the Canadians want to know what happened in California," said CAEM Canadian Scholar Mike McLeod, a coauthor of the report, "but they want to know more about successful restructuring in other provinces and states. Since there is no equivalent to FERC in Canada, it was important to look at energy restructuring from a North American perspective, because much of the energy flows in a north-south pattern."

Copies of the report can be ordered from redindex@caem.org or through the CAEM website, www.caem.org . CAEM is an independent, nonprofit Washington-based think tank whose mission is to promote an effective transition from the monopoly to the competitive model of regulation.