Making Sense of Energy

Energy Market Update: March-April 2020


Opinion: Energy sector is vital to Canada’s economic recovery after COVID-19

April 20 will go down as an extraordinary day in modern economic history: the day the price of oil, at least in the futures market, turned negative. The severity of the liquidity crisis for these companies and the climb out of the COVID-19 downturn will be slower for the energy sector than most industries. Swollen inventories of oil that continue to build will keep downward pressure on oil prices, even as the world economy begins to recover. Many advocates for renewable energy have argued that the economic disruption brought about by COVID-19 marks the perfect time to steer resources toward more sustainable sources of energy. But this transition will take place on a much longer time horizon than what’s needed to get Canada’s economy back on its feet. Just last year, more than 20 per cent of the nation’s exports came from energy products, well ahead of all other leading shipments. In fact, for nine of the past 10 years, energy products — including crude oil, natural gas and other petroleum products — have led the way as our country’s top export and continue to be a major driver of economic growth. Source: Edmonton Journal

Electricity Prices for Alberta

The Alberta power pool price averaged 4.210 cents per kWh in March 2020. This price is 0.577 cents lower than last month’s average of 3.633 cents per kWh. The pool price has averaged 5.419 cents per kWh over the last 12 months.

As of March 27, 2020, the forward market was predicting electricity prices for the calendar years of 2020, 2021, 2022, 2023 and 2024. These prices are 4.900, 5.400, 5.300, 5.200, and 4.700 cents per kWh respectively.

Gas Prices for Alberta

Direct Energy’s gas rate for March 2020 was $1.66 per GJ in Alberta. The April 2020 rate has been set at $2.14 per GJ. Alberta gas prices have averaged $1.715 per GJ over the last 12 months.

As of April 2, 2020, the forward market was predicting gas prices for the calendar years of 2020, 2021, 2022, 2023, 2024, and 2025. These prices are 1.82, 2.27, 2.23, 2.23, 2.34, and 2.41 cents per GJ respectively.


British Columbia

B.C. rules prevent Indigenous communities from running their own clean energy utilities. Here is why that should change

BC’s electricity system is run as a provincial monopoly by BC Hydro, with the exception of a few municipal-level utilities. Beecher Bay wanted to build and run an electrical utility within the reserve. BCUC denied the request. That decision effectively denied Indigenous groups the ability to run their own utilities, and profit from the environmental and economic benefits that come with it. Many of the remote Indigenous communities in British Columbia rely on expensive and dirty diesel generators, even though they may have the potential to tap into renewable energy. Source: The Narwhal



Ontario Energy Association calls on government for end to most hydro subsidies

The association representing Ontario’s energy producers and distributors says the province should stop subsidizing the price of hydro and instead offer targeted help to customers who need it most. The Ontario Energy Association makes the request of the Ontario government in a policy paper released Wednesday, saying most of the nearly $6 billion the province spends every year to cut electricity costs goes to customers who do not need help paying their bills.

If the province continues with its current pace, it will spend $228 billion subsidizing hydro rates over the next 25 years, according to the association. Source: Global News

Electricity Prices for Ontario

The Hourly Ontario Energy Price (HOEP) was an average of 1.344 cents per kWh in March 2020. This price is 0.056 cents higher than last month’s 1.400 cents per kWh. The twelve month moving average was 1.353 cents per kWh up to March 2020.

The Actual Rate for the Global Adjustment rate Class B for March 2020 was set at 11.942 cents per kWh. The Global Adjustment is an additional charge paid by non-regulated customers. (Source: IESO)



Supreme Court moves Sask., Ont. appeals of carbon tax to September

Canada’s national fight over the carbon tax won’t get sorted out at the Supreme Court of Canada until the fall. The Supreme Court says appeals from both Saskatchewan and Ontario over cases that upheld Ottawa’s right to impose a carbon price on provinces will be heard in September. The cases were to go forward last month but were postponed along with all others scheduled for March, April and May when the court shut down due to the COVID-19 pandemic. The carbon tax battle has been raging in Canada for several years. On one side is the federal Liberal government, which implemented the national price on pollution last year. On the other, provincial conservative governments who argue Ottawa is overstepping its bounds. Source: CBC News



Pandemic causes drop in electricity demand across the province: Manitoba Hydro

The COVID-19 pandemic has caused a drop in the electricity demand across the province, according to Manitoba Hydro. On Tuesday, Manitoba Hydro said it has tracked overall electrical use, which includes houses, farms and businesses both large and small. Hydro said it has seen about a six per cent reduction in the daily peak electricity demand, adding this is due to the many businesses and downtown offices which are temporarily closed. “Currently, the impact on Manitoba electricity demand appears to be consistent with what we saw during the 2008 recession,” Bruce Owen, the media relations officer for Manitoba Hydro, said in an email to CTV News. Source: CTV News


New Brunswick

‘No need to panic’: Talk of selling popular electric utility in Saint John sparks concern

An unsolicited offer from an unnamed party to buy Saint John Energy is being treated gingerly by city officials trying to weigh the financial and political implications of unloading what may be one of Canada’s most popular electric utilities. “No need to panic,” wrote Saint John Mayor Don Darling on Twitter last week in response to rumblings of concern that the city might accept the surprise offer at its next meeting. There is not a lot of detail about the offer being made for the city’s 98-year-old electric company, or who it is from. Based on information released so far along with other city financial information, it appears to be worth approximately $150 million according to UNB accounting professor Matthew Wegener, who has reviewed the limited available material. He cautions that is a rough, ballpark estimate. Source: CBC News


Prince Edward Island

Stratford solar panel project scrapped due to cost

The Town of Stratford, P.E.I., has scrapped plans to install solar panels on the roof of its town hall. An engineering report has concluded it would cost more — and take longer to pay off — than the town originally thought. When the project was announced in 2017, the town planned to install panels that would generate 80 kilowatts of electricity — about 30 per cent of the electricity needed a year for the town hall. The panels were expected to save the town about $15,000 in electricity costs a year and pay for themselves within six years. The town also hoped to sell surplus power to Maritime Electric. But an engineering report by Coles Associates Ltd. in October 2017 found the gym roof would not be able to bear the weight of the panels needed to generate that much electricity, and the cost would be close to twice the $200,00 budgeted. In the best-case scenario the installation would take more than 17 years to pay for itself in energy savings. Source: CBC News



Quebec energy sector feeling the impact of COVID-19 as consumption drops

With everyone stuck in their homes and police checkpoints set up across the province to limit movement between regions amid the COVID-19 pandemic, Quebec’s energy sector is taking a hit. According to numbers from the past few weeks, consumption in products and services has dropped by at least 40 to 50 per cent, l’Association des distributeurs d’energie du Quebec (ADEQ) announced on Monday. Unlike other essential services, which have seen a rise in demand over the past few weeks, ADEQ suspects their numbers may continue to drop as limits on travel become stricter. Source: CTV News


Newfoundland and Labrador

COVID concerns lead to blue bags being dumped at landfill in central Newfoundland

Source: CBC News

Central Newfoundland’s processing plant for recyclables has been shut down since most employees refused to go to work last Monday over reportedly unsafe working conditions. Central Newfoundland Waste Management has now stopped taking blue bags at the facility since it is beyond full. All recycling bags put curbside in central Newfoundland will now end up in a landfill. Evans said he hopes people hang onto them in storage while they work through a plan to get the facility up and running in the next two or three weeks. Evans said CNWM has tried to use off-site storage facilities before, but the recyclable material ended up contaminated and had to be dumped in the landfill. They have also tried to compact the materials to allow for more storage in Norris Arm, but too much compaction makes the materials impossible to process and then they have to be dumped. Source: CBC News


Nova Scotia

NSP ordered to refund millions to customers, but bills not likely to shrink

Nova Scotia Power was ordered to pay a multi-million dollar refund to customers Friday by regulators who ruled a mega-project once again failed to deliver promised benefits. Ratepayers are on the hook for the $1.57-billion Maritime Link, which was completed on time and on budget in 2017 to bring electricity from the Muskrat Falls hydro project into Nova Scotia via subsea cable across the Cabot Strait. The problem is customers haven’t been getting what they paid for. The Maritime Link has not delivered any electricity from Muskrat Falls. That project is years behind schedule and billions over budget. But Nova Scotia Power customers were charged $109 million in 2018 and $115 million in 2019 for the Maritime Link. In 2020, it will cost ratepayers $144 million. Source: CBC News



Environmental review of Nunavut mine stalled by pandemic

The Nunavut Impact Review Board says it won’t hold public hearings on an expansion at the Mary River Mine until public health restrictions on travel and large gatherings are lifted. After strong opposition from North Baffin communities, the environmental regulator cancelled a series of eight teleconference meetings for that expansion that were set to start earlier this week. That expansion, by Baffinland Iron Mines Corporation, looks to see iron ore production at least doubled and a railway built to move that product to port faster. Source: CBC News


Northwest Territories

NTPC confirms ‘cyber attack’ from unknown source on Thursday, RCMP investigating

yellow and blue data code displayed on screenThe Northwest Territories Power Corporation’s (NTPC) confirmed it had suffered a “cyber attack from an unknown source.” It stated that an investigation is underway. Doug Prendergast, spokesperson for NTPC, said the cyber attack was a ransomware attack, but did not say if any ransom had been set. Earlier in the day, NTPC had said it was too soon to confirm a ransomware attack. Ransomware is a type of malicious software that allows hackers to view a computer’s files, gather information and spread through its network, unbeknownst to the user. The software then encrypts the files and the attackers demand payments from victims to release the data. RCMP told CBC on Friday morning that it’s aware of the alleged “security breach to website and data, with a local utilities provider.” They said their federal investigations unit is investigating but police don’t have updates at this time. Source: CBC News



Design for cleaner, quieter snowmobile wins Yukon Innovation Prize

A Whitehorse aeronautical engineer who designed an innovative hydrogen fuel cell snowmobile is the big winner of this year’s Yukon Innovation Prize. Stefan Weissenberg is a backcountry skier who loves the outdoors. He came up with the idea for a quiet, zero-emissions snowmobile because the noise from the machines was ruining the tranquillity of his wilderness experience. Weissenberg says his hydrogen engine will have longer range and perform better in cold climates than gas engines. Source: CBC News