Quebec

Benchmarking electricity tariff competitiveness in industrial subsectors and possible solutions


SECTOR : , Utilities

client

Régie de l’Énergie

project description

Under the 2030 Energy Policy of Quebec, Quebec’s provincial Minister of Energy and Natural Resources requested the Régie de l’énergie to produce an opinion paper on the competitiveness of Quebec’s electricity tariffs in some industrial subsectors exposed to international competition. The Minister also asked for solutions regarding whether to maintain or improve Quebec’s competitiveness by following the best practices observed in competing jurisdictions.

highlights

Econoler conducted an international benchmarking study on the electricity tariffs in eight highly energy-intensive industrial subsectors.

Econoler carried out the following tasks as part of this assignment:

  • Identified the economic sectors with high electricity consumption;
  • Established the typical profiles for every subsector to capture the energy needs and key performance indicators (e.g., kWh/tonne);
  • Identified the issues related to competitiveness, such as the proximity to resources and the costs of procuring electricity and primary energy;
  • Identified competing jurisdictions in the subsectors assessed;
  • Identified the factors affecting electricity tariffs for each jurisdiction;
  • Assessed applicable tariff options and rebates, as well as economic stimulus programs;
  • Analyzed the volatility of electricity tariffs and primary energy supply in electricity production;
  • Developed findings and proposed potential solutions related to electricity tariff competitiveness;
  • Presented expert testimony and the report’s conclusions and responded to the regulators’ questions at public hearings.

When carrying out this assignment, Econoler consulted a number of associations in the subsectors, regulatory organizations and other stakeholders to ensure that the findings reflected the realities in the field.

Econoler analyzed a total of 10 jurisdictions, including one European country, one South American country, two Asian countries, and five states in the U.S. For these five U.S. states, the detailed tariff structures of five public utility companies were analyzed, including the economic development programs.

Econoler’s work allowed the Régie de l’énergie to gain in-depth knowledge about the key issues related to the international competitiveness of various sectors and use the practical findings and relevant solutions. All this knowledge allowed for stimulating the discussion and providing a clear, well-documented response to Quebec’s provincial Minister of Energy and Natural Resources so as to exert constructive influence on the province’s energy-distribution tariff-setting practices, making them favourable to the economic growth and vibrancy of Quebec’s industrial enterprises.

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