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Newfoundland's Electricity Options: Making the Right Choice Requires and Efficient Pricing Regime

Author

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  • James P. Feehan

    (Memorial University)

Abstract

The Government of Newfoundland and Labrador is assessing whether to authorize the multi-billion dollar Muskrat Falls hydroelectricity project on the lower Churchill River in Labrador. Proponents say it is needed to handle expected increases in electricity consumption. A better first step, however, would be to reform provincial regulations that set artificially low prices for electricity and support excessive power consumption, which is a problem in Newfoundland as it is in other provinces. Changing regulatory regimes so that the price of electricity reflects underlying costs would make economic sense and promote energy conservation. For Newfoundland, such a change could make the expensive Muskrat Falls project unnecessary.

Suggested Citation

  • James P. Feehan, 2012. "Newfoundland's Electricity Options: Making the Right Choice Requires and Efficient Pricing Regime," e-briefs 129, C.D. Howe Institute.
  • Handle: RePEc:cdh:ebrief:129
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    File URL: https://www.cdhowe.org/public-policy-research/newfoundland%E2%80%99s-electricity-options-making-right-choice-requires-efficient-pricing-regime
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    References listed on IDEAS

    as
    1. Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1, January.
    2. David Laidler, 2004. "Monetary Policy after Bubbles Burst: The Zero Lower Bound, the Liquidity Trap and the Credit Deadlock," Canadian Public Policy, University of Toronto Press, vol. 30(3), pages 333-340, September.
    3. Philippe Bergevin & David Laidler, 2010. "Putting Money Back into Monetary Policy: A Monetary Anchor for Price and Financial Stability," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 312, October.
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    Cited by:

    1. Ake Blomqvist & Colin Busby, 2012. "Better Value for Money in Healthcare: European Lessons for Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 339, January.
    2. James MacGee, 2012. "The Rise in Consumer Credit and Bankruptcy: Cause for Concern?," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 346, April.
    3. Alexandre Laurin & William B.P. Robson, 2012. "Achieving Balance, Spurring Growth: A Shadow Federal Budget for 2012," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 344, March.
    4. Christopher Ragan, 2012. "Financial Stability: The Next Frontier for Canadian Monetary Policy," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 338, January.
    5. Adam Aptowitzer & Benjamin Dachis, 2012. "At the Crossroads: New Ideas for Charity Finance in Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 343, March.
    6. David R. Percy, 2012. "Resolving Water-use Conflicts: Insights from the Prairie Experience for the MacKenzie River Basin," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 341, February.
    7. Joseph Doucet, 2012. "Unclogging the Pipes: Pipeline Reviews and Energy Policy," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 342, February.

    More about this item

    Keywords

    Economic Growth and Innovation; Governance and Public Institutions; Water Series; Province of Newfoundland; electricity; hydro; pricing; Newfoundland and Labrador Hydor (NLH); Nalcor Energy; Muskrat Falls Plan (MFP); Isolated Island Option (IIO);

    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities

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