From time-to-time the Editors of Energy Regulation Quarterly invite law firms and others to address certain topics of particular importance to energy regulators.[1] Two articles on hydrogen in this Issue of ERQ continue the series. They concern an important new technology that will undoubtedly have a major impact on energy regulators and the companies they regulate.

In the past year, most countries have significantly increased their commitments to carbon reductions and the amount of funding they are prepared to invest in reaching that goal. As a result, there is a mad rush to develop new technologies that will lead the decarbonization process.

At the top of the list is hydrogen. Most countries now have a hydrogen program. In Canada, there is a federal hydrogen program as well as existing or proposed programs in most provinces. We invited the Gowlings law firm to review these initiatives and explain where they currently stand and how they are likely to unfold. Its review is found in the lead article in this Issue of ERQ under the title “Is Hydrogen the Silver Bullet?” We also invited the Stikeman Elliott law firm to address the unique hydrogen program that British Columbia recently announced. Finally, in something of a departure, we also asked a leading developer of this technology, Siemens, to provide commentary on where it thought the technology was going and what the regulatory barriers to entry might be. Siemens’ report is included in the first of these two articles.

The expanding role of hydrogen is of course a means of pursuing the overarching goal of reducing greenhouse gas emissions. In parallel with the adoption of emerging technologies, various policy, legislative and regulatory initiatives continue to pursue that goal with measures aimed directly at reducing the use of carbon. In “Carbon Tariffs – The Next Challenge in Canadian Climate Law and Policy?”, Dr. A. Neil Campbell et al. examine one such initiative, namely Carbon Tariffs or Border Carbon Adjustments (BCAs), which “adjust the import prices of carbon-intensive goods to match the cost of locally produced goods impacted by carbon pricing regimes.” Canada announced in the 2021 Budget that it plans to develop BCAs as an element of its Climate Plan.

Meanwhile, expanding the role of Québec’s “green” hydro-electricity in the North American energy supply mix continues to face significant obstacles in the form of “forceful and effective opposition abroad” to proposed new export transmission lines. In “Hydro-Québec and Its U.S. Transmission Projects,” Erik Richer La Flèche examines the history of Québec’s five largest export projects of the last three decades and discuss how such projects may be configured in the future to increase their chances of success. Interestingly, the author notes that the arguments against Québec’s exports “often overlap with those used against pipelines and, to the surprise of much of Québec’s political class, the ‘green’ credentials of Québec’s hydropower are insufficient to ensure the success of export projects.”

In “The Cause of the Ontario Electricity Price Increases,” Benjamin Dachis and Joel Balyk suggest that the crux of the problem of rising system costs in Ontario’s electricity sector for more than a decade is “increases in the cost of supply from high-cost contracts spread over less electricity consumption than forecast when the contracts were struck.” They suggest that Ontario should replace the current industrial electricity pricing system for large customers with “a market-based ‘interruptible rate’ that rewards them for agreeing to interruptions of supply during extreme peak demand hours.” They conclude that the government should end its “hands-on approach” to system planning and procurement and, instead, provide high-level policy direction that empowers the Ontario Energy Board to regulate and that ensures the independence of the Independent Electricity System Operator (IESO) “to avoid repeating past mistakes.”

In November 2020, the report of a judicial inquiry into the 2012 sale by the Town of Collingwood of 50 per cent of its interest in Collus Power Corporation, the local electricity distribution company, was released. The inquiry was called to investigate allegations of conflicts of interest, unfair advantages alleged to have been given to the purchaser and alleged malfeasance by certain parties. In “The Collingwood Judicial Inquiry: Lessons for Ontario’s Electric Utilities,” Ron Clark discusses the relevance of the inquiry’s recommendations to LDCs and the insights to be drawn from its report.

Jurisprudence on Indigenous rights continues to evolve, most recently in a significant decision of the British Columbia Supreme Court ruling that the rights of First Nations under Treaty 8 in the northeast of B.C. had been infringed by the cumulative impacts of industrial developments within the Nations’ traditional territory. The decision is analyzed by Sander Duncanson et al. in “British Columbia Supreme Court Significantly Expands Indigenous Rights.”

This Issue of ERQ concludes with a book review by Adam Chisholm of the latest edition of the indispensable The Guide to Energy Arbitrations.

  1. See: Paul Kraske et al, “Electricity Storage in North America” (2019) 7:1 Energy Regulation Q 55; KPMG, “Capitalizing the Cloud: The Regulatory Challenges” (2020) 8:1 Energy Regulation Q; Ron Clark, “The Ontario Generation Contract Review Report” (2020) 8:4 Energy Regulation Q 54.

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