Canadian utilities are engaged in the North American transition towards competitive markets and are integrated with the American regional systems. The electricity supply industry in Canada is organised on a regional basis. The various utilities, responsible for electricity generation, transmission and distribution in each area, frequently trade power with each other via some of the world’s highest voltage DC transmission lines.
Canadian electricity generation is predominantly hydro-based and is generally cost competitive with other North American jurisdictions. Due to the operations of hydraulic systems, most hydro rich provinces have surplus energy available for domestic and international trade. Canadian legislation requires that exports must be authorised by the NEB and that interested Canadian electricity buyers be provided the opportunity to purchase the electricity, for use in Canada, on similar terms and conditions as the proposed export sale.
The US Federal Energy Regulatory Commission (FERC) is currently planning the creation of regional transmission organisations (RTS) to coordinate transmission systems. The electricity transmission interests in several Canadian provinces are considering membership in RTOs, which are expected to facilitate access by Canadian exporters to US markets and access by Canadians to US supplies. RTO formation could lead to more north-south trade and further integration of US and Canadian electricity markets. To the extent that Canadian competitiveness can be maintained, higher export revenue would result. Market integration could also result in upward price pressure in some provinces.
Due to the increasing interdependence of the networks in both countries, a dependency made clear during the 2003 Northeast blackout, there have been greater efforts to increase cooperation and coordination between Canada and the US. A bilateral commission is planning the formation of the Electric Reliability Organisation, an intergovernmental organisation that would monitor network reliability, settle trans-border disputes, and formulate common industry standards.