1. Lowering Electricity Prices Through Market Integration SESSION 2 - Energy Costs - How to Address Higher Power Costs Policy & Solutions Forum Windsor-Essex Regional Chamber of Commerce May 15 th, 2014 – Windsor Pierre-Olivier Pineau Professor, HEC Montréal Chair in Energy Sector Management

2. Residential Price Ontario & Québec 2 14.9¢/kWh8.9¢/kWh7.2¢/kWh 1.27¢/kWh 6¢

3. 3 Electricity Consumption per Capita by Average Industrial Price (2012) Statistics Canada (2014) Hydro provinces

4. Why does Québec have such a low energy price? Average cost of a kilowatthour = 2.09¢ (2012) → Cheap hydropower “Native load commitment”: obligation to sell electricity at a regulated price to local consumers 4

5. National Energy Program (1980-1984) Main elements of the program: a blended “made-in-Canada” price of oil consumed in Canada: $18.50 versus $35 (Sept. 1980 world price) a petroleum and gas revenue tax of 8% on all production of oil and gas in Canada a federal share of petroleum production income rising from 10 to 24% 5 Scarfe (1981) and Bregha (2013)

6. Nordpool 6 Statnett (24-04-2014 22:10)

7. How can reason prevail over history? Think of a Canadian energy framework – Electricity – Greenhouse gases – Oil & gas (i.e. pipelines) Assess the benefits of such a framework Explain – Educate – Engage 7