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America's Canadian Problem
of total electricity generation, or about half the historic level.
Peak Demand Problems in Ontario
Ontario in particular is driving up peak load during the summer months, when North American prices are at their highest. In August 2002, Ontario logged an all-time peak of 25,414 MW. As a result, other provinces, including neighboring Quebec-the largest electricity exporter to the United States-supply Ontario during the summer, thus reducing available energy for export.
Ontario is not building enough new capacity to end its peak demand problem anytime soon, one analyst suggests. "The Ontario market is forecast to have a capacity shortfall as early as 2005, even with the 3,500 MW of nuclear capacity that is scheduled to return to service and with the 1,000 MW of independent generating capacity currently under construction," says John Dalton, a managing director at Navigant Consulting in Toronto. The timetable for the return of the nuclear plants could suffer from political factors as well as mechanical factors, however, further exacerbating peak load problems in Ontario.
Quebec leads Canadian provincial exporters, having sold 14.7 million MWh to the United States last year, followed by British Columbia with 7.9 million MWh, Manitoba with 7.4 million MWh, and Ontario with 2.4 million MWh. None of the other provinces that exported to the United States last year, including Alberta, New Brunswick, Nova Scotia, and Saskatchewan, sold more than a few hundred thousand megawatt-hours.
Still, Newfoundland and Labrador could become substantial exporters if negotiators agree on the terms of the proposed Gull Island hydroelectric project. This 2,000 MW project is located on the Churchill River in Labrador and carries an estimated cost of Cdn$4 billion for the construction of the dam and a transmission line to Ontario; completion is estimated six years from construction start. "At least initially, some of the electricity from Gull Island could be exported," Dalton says.
The states that imported more than 1 million MWh from Canada last year, according to Sam's NEB statistics, include:
- New York with 13.9 million MWh;
- North Dakota/Minnesota with 7.4 million MWh;
- Washington with 4.4 million MWh;
- Maine with 3.9 million MWh;
- Vermont with 2.1 million MWh;
- California with 1.9 million MWh; and
- Oregon with 1.5 million MWh.
While the volume of Canadian electricity supplied to the United States as a whole may be diminishing, much of the current supply will continue to be a critical component in the planning for energy-short regions like New England. In an October 2002 projection of the next four years' worth of demand and supply for the New England Power Pool (Nepool), ISO New England has modeled summer peak month supply plans that include a flow of 1,450 MW from Hydro Quebec and New Brunswick, the lion's share of all planned purchases for Nepool.
U.S. Supplies Provinces, but Deregulation Inspires Little Cross-Border Trade
A few states are major exporters of electricity to Canadian provinces, mostly during the winter months. In 2002, Washington led all state exporters with 5.6 million MWh sold to Canada, followed by New York with 3 million MWh and North Dakota/Minnesota with 2.1 million MWh, NEB