Traditional economic regulation – involving interminable hearings on issues such as cost of capital, rolled-in versus incremental tolls, system access and unbundling, all in quest of the holy grail of “economic efficiency” – no longer dominates the business of Canadian energy regulation tribunals, at least not to the extent it did in the 1980s. Today, the focus of government policy-makers is largely on the review processes for proposed infrastructure projects and the pervasive role that climate change plays on the public agenda, with direct consequences for energy regulators.

Stephen Littlechild’s article on “Electricity privatization and restructuring in Ontario and abroad: Some lessons from UK and elsewhere” offers comparative lessons on industry restructuring. His broad observations on the role of effective regulation also have particular resonance as Canadian governments continue introducing measures to address the issue of climate change, which will result in extensive restructuring of segments of the energy industries, with obviously significant implications for those industries and the tribunals that regulate them. Littlechild reminds us that, while governments will find ways to use regulation to further their policy ends, “regulation is probably not the main means by which Government implements its policies.” Furthermore, “[g]overnment cannot be expected to follow a consistent course over time….”

In their article on “Alberta’s Electricity System: Carbon Policies and the Risk of Unintended Consequences,” Donna Kennedy-Glans and Brian Bietz address the challenges of implementing the provincial government’s recently announced Climate Leadership Plan. The Plan is widely considered to be a necessary development to help address continuing opposition to major oil pipeline projects in particular. Implementing the Plan, however, presents its challenges, particularly in the current Alberta economic climate. With the risk of unintended consequences, Kennedy-Glans and Bietz ask if this is the right time to assess the implications of a transition back to a fully regulated electricity system for the province.

The dominant role now played by climate change in shaping energy policy is also highlighted in Erik Richer La Flèche’s report on Quebec’s 2030 Energy Policy, released in April, with its ambitious greenhouse gas reduction goal to decarbonize the province.

Nigel Bankes analyzes two cases in which the Supreme Court of Canada has granted leave to appeal decisions of the Federal Court of Appeal involving the jurisdiction of the National Energy Board (NEB) and the Crown’s duty to consult. The two appeals will be heard together. The Court will have to decide, inter alia, whether a tribunal’s processes can satisfy the duty to consult. Bankes concludes that, while both appeals arise from decisions of the NEB, the outcomes will be relevant for energy tribunals throughout the country.

We are particularly fortunate in this issue of ERQ to have “The Washington Report” from our regular contributor Robert Fleishman. The interconnection of North American energy markets means that policy, regulatory and judicial developments in the U.S. generally have direct, significant implications for the Canadian energy industry, perhaps even more so today than in the past. The developments discussed in Fleishman’s comprehensive review include LNG exports, fracking, crude-by-rail and the end of the U.S. ban on oil exports – each as topical and relevant in Canada as in the U.S. Scott Hempling’s case comment effectively complements this year’s “Washington Report” as it provides a closer look at how the US Supreme Court has delineated the interplay between state and federal jurisdiction in the regulation of American energy markets.

Just in the past few weeks, as this issue of ERQ goes to press, further political and regulatory developments make it clear that the business of energy regulation will continue to play a predominant role in the nation’s public discourse. In the wake of the National Energy Board’s recommendation for approval of the proposed expansion of the TransMountain pipeline, attention has shifted to the federal government’s interim revised process for the approval of major new pipeline projects and what that process will mean, not just for that particular project, but also for other current and future projects that are essential to provide market access for Canada’s oil and natural gas resources. Developments with respect to climate change initiatives continue apace in various provinces, particularly in Alberta and Ontario which have just announced a cooperation agreement that they are teaming up on measures to address climate change. It is our expectation that future issues of ERQ will continue to make a significant contribution to the continuing debate.

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