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

James Feehan

No 129, e-briefs from C.D. Howe Institute

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.

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) (search for similar items in EconPapers)
JEL-codes: L9 Q2 (search for similar items in EconPapers)
Pages: 6 pages
Date: 2012-01
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published on the C.D. Howe Institute website, January 2012

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