Creating a Western Canadian power grid to boost wind, solar - an Energi Talks Live episode!

Markham interviews Professor Kristen van de Bizenbos of the California Western School of Law in San Diego, California, an expert on North American energy law and, until recently, a former faculty member at the University of Calgary. 

What is Energi Talks?

Journalist Markham Hislop interviews leading energy experts from around the world about the energy transition and climate change.

Markham: 00:04

Welcome to episode 307 of the Energy Talks podcast. I'm energy and climate journalist, Markham Hislop. Western Canada is made up of 4 provinces. Alberta and Saskatchewan, with the best wind and solar resources in the country, are in the middle. Bookended by the hydro provinces, British Columbia, and Manitoba.

Markham: 00:22

All provinces trade electricity with US states to the south, but very little east and west with their neighbors. Yet everyone agrees that using the hydroelectric dams as big batteries to facilitate a huge renewable energy build out on the prairies would be the cheapest and quickest way to double or triple the power grid in each province. Why are the simplest solutions often the hardest ones to implement? To help us untangle the mess of constitutional issues around creating a Western Canadian power grid, I'm joined by professor Kristen van de Beazenbos of the California Western School of Law in San Diego, California. So welcome to the interview, Kristin.

Kristen: 01:04

Thank you. I'm happy to be here.

Speaker 3: 01:06

Well, it's

Markham: 01:06

nice to have you back. You were at the University of Calgary for about 6 years in the faculty of law, and I interviewed you a number of times about these kinds of issues. And, when did you move down to the, University of, well, tell us about the this, your position in in, San Diego.

Kristen: 01:26

So I worked at the University of Calgary Faculty of Law. I was actually cross appointed between the faculty of law and Haskayne School of Business for 6 years. And my specialization was electricity regulation and energy policy. And then I moved, last year. So I started this past fall at California Western, and I teach, energy and climate change, environmental law, and property law.

Markham: 01:49

Well, you have a very deep, insight into the constitutional issues both, and the regulatory issues around the power grids in Canada and the US. And I should mention for anybody who wants to Google this and look it up, I would recommend you have a read. Kristen, a couple years ago, wrote a paper called Lost in Transmission, a constitutional approach to achieving a nationwide net zero electricity system. So check that out, and she it goes over a lot of the basics, that we'll be talking about today. So, Kristen, we're gonna talk about a Western Canadian power grid, and what are the legal issues, what are the constitutional issues, but maybe we could start at the very highest level.

Markham: 02:34

Could you just give us a brief overview of how Canada structures its, electricity system, and what do the, the power grids in the western provinces look like?

Kristen: 02:46

Well, as you, we've discussed this in the past as well, but there actually isn't a Canadian electricity system. Each province has its own electricity system. And, as you mentioned before, Manitoba and British Columbia have Crown Corporations, Manitoba Hydro and BC Hydro that develop primarily large scale hydro resources. And then Saskatchewan and, Alberta have, traditionally depended more on fossil fuels. Saskatchewan actually also has a Crown Corporation Sask Power, and then Alberta is kind of the outlier.

Kristen: 03:18

So for the 3 provinces that have a Crown Corporation, those corporations are what is referred to as a vertically integrated monopoly. They own the generation facilities. They own the distribution lines. They own the transmission lines. They own all of the equipment that's required to generate and deliver power to consumers.

Kristen: 03:37

Whereas Alberta actually has a de disaggregated electricity market. So they broke up their electricity, markets into discrete sectors. There were, a few decades ago vertically integrated monopolies in Alberta, but they were privately owned or investor owned utilities. Sometimes people call them IO news. And so in the nineties kind of following the lead of the United States that also sort of embarked on this, desegregation process for most of its, that also sort of embarked on this disaggregation process for most of its, electricity systems as well, Alberta broke them up into distribution, transmission, and generation with the goal to create a competitive generation market that would, be cheaper, more cost affordable for people because it would competition would attract more people, more competition would be lower prices.

Kristen: 04:20

Although, that's that's not actually what happened in Alberta, but that was the goal.

Markham: 04:24

Yes. We've been reminded of that over the last couple of years that that was the goal, but that isn't the reality. And I've I've seen many of my friends and and, you know, folks that I know in Alberta, complaining on social media about, you know, $450,600 electricity bills in the middle of winter. They were not happy campers. Chris Kristen, maybe one of the things you could do is give us a comparison to the American system because in you mentioned that Canada doesn't have a power grid or an electric system.

Markham: 04:54

We've got 10 of them, essentially, but that's not true in the in the US where there's a a national regulator, the the FERC, and then we have these regional transmission organizations. There's a lot more more institutions involved that allow the Americans to do regional planning and market design, far more than than in Canada.

Kristen: 05:15

That's right. So in the US, you have, well, they actually there is kind of this meta regulator of reliability that's also active in Canada. That's NERC, the North American Reliability Corporation, which oversees very large interconnected systems, including, systems that include Canadian grids. Because as you mentioned, provincial grids are connected to the US grids just to the south of them. Then the federal regulator in the US is the Federal Energy Regulatory Commission, FERC.

Kristen: 05:44

So FERC has jurisdiction over what's called the wholesale power sector. That's transmission and the generation of power. And then, for distribution, which is I guess I should also just back up and really quickly for your listeners say the difference is so generation is actually the generation of electricity, so power plants. And transmission lines are the lines up on steel towers that you see when you're driving. That is generating at a very high voltage power generated from power plants to distribution systems where the voltage is lowered and then sent into homes and businesses.

Kristen: 06:16

So distribution networks are, in under state regulation in the US. So that's really kind of the difference. You have FERC which is in charge of transmission and generation and then you have the States which are in charge of their distribution systems.

Markham: 06:32

And so looking ahead now, we're gonna talk about the Western Canadian grid idea, and this is something that energy, media has an intense interest in. I've been advocating this for a long time, and I'm not I'm not alone. I mean, this idea has surfaced, one you know, in one way or another for really decades, and it's a very difficult thing to effect, for a variety of reasons. There are some technical issues involved, but the biggest impediments seem to be political and the way the politics work in this country around the exercise of constitutional power. And maybe, Kristen, you could give us an eye just kind of an overview of the, the Constitution Act, how it distributes powers, and what some of the issues are if we're gonna if we're trying to set up a east west grid, in Western Canada.

Kristen: 07:27

So as I mentioned, in the US, they have FERC, the Federal Energy Regulatory Commission that has jurisdiction over the transmission system and generation. And it has that because of a provision of the US constitution called the commerce clause that gives, the federal government the power over, goods in interstate commerce. Canada doesn't have a commerce clause, but what the constitution act has, there's really 2 things with respect to electricity that are particularly of note. The first is interprovincial works. So the federal government has jurisdiction over oil and gas pipelines.

Kristen: 08:10

And in theory anyway, that also is why they have jurisdiction over transmission lines that cross provincial borders. But the federal government has never once actually exerted its jurisdiction over an interprovincial transmission line. There is a process for doing it. A person would actually see, see, I've been in the US long enough to say process instead of process already. But there is a process for asking, Ottawa to take jurisdiction over an interventional, interprovincial transmission line, but it's never actually been done.

Kristen: 08:40

So it's it's possible. It's just been sitting there. The the regulator that oversees, interprovincial oil and gas pipelines in Canada. The CER, the Canada Energy Regulator actually has a placeholder section in the CER act for interprovincial transmission but it's essentially empty. It's a it's sort of like, we'll get back to this at some other time, but we want to note that we do have jurisdiction over these types of lines to be addressed at a later date.

Kristen: 09:07

So there is certainly been an awareness that the federal government has this power, but it's never exercised that there's no expertise among the federal regulators for actually doing it. So they've they've built and overseen plenty of oil and gas pipelines, but never, an electricity transmission line.

Markham: 09:25

Yeah. I I wanna stick my or in here around, pipelines, oil and gas pipelines because when the Trans Mountain expansion, project was very controversial in 2016 and 2017, maybe 2018, I did a lot of reporting on the conflict between the BC government, the city of Burnaby, and the federal government, over that issue. And the, as it was called at that time, the National Energy Board, has an act, which actually also makes it a superior court, and I think that would get transferred over to the Canadian Energy Regulator when they changed it. And the, there were a number of times when the constitutionality of Canada's regulation of interprovincial, that means, you know, pipelines that cross provincial borders, was challenged. And the National Energy Board was, as a superior court, actually ruled on it.

Markham: 10:18

And in every single instance, they ruled in favor of the Canadian government, And this is a point that's often lost in the debate around this. You know? Well, why didn't Trudeau declare the pipeline in the national interest? Why didn't he intervene more? Wait.

Markham: 10:32

It's not his job. It's not the government's job. That's delegated to the regulator, and the regulator has all the tools, and and it's set out very clearly in the, in the legislation and in well, in the legislation, how that's going to be exercised, and and they did certainly did so on on the pipeline. And it's very curious that they haven't done the same set up the same kind of regulatory powers on the, on the electric the power transmission side. So question, Kristen, if there was going to be some kind of an east west electricity market, does that mean at the very least that the federal government would have whatever government was, whatever party was in power, informed government, would have to, bring that legislation back to the House of Commons with that, part of the legislation spelled out, have it debated, go through the three readings passed, go through the senate, all of that kind of stuff, or can the government, bill it in on its own?

Kristen: 11:36

That's an interesting question. I think that if, the the well, it's the CER currently that has the in the legislation, in the CER act, it actually says that they are the regulatory authority federal exercise of jurisdiction over interprovincial transmission lines. So it would be them that would have to do it. Now it it on the one hand, I think there's an argument to be made that the CER can probably do it themselves, but it might be worth it to go through the parliamentary process and have parliament to actually consider, how they should address the regulations. They have essentially 10 different templates they can choose from because all of the provinces have their own electricity regulators and have been approving and permitting transmission lines for decades.

Kristen: 12:23

So they could either, you know, choose, one of the provinces the way that they do with their process and sort of model the federal process after that, or they could take a look at what FERC does and they could try to mirror in some ways, you know, trying to, I think, adapt it for the the constitutional structure that we have in Canada as opposed to the US. But I think they could also see what FERC does because the nice thing about being right next to the United States is that because the federal government in the US has been overseeing, 50 different electricity markets that are connected to each other, Well, I should say 49, not Texas, but the rest of them. Because they've been doing that for so long, I think that's actually quite a huge benefit for Canada. If the CER were going to be tasked with doing it or if parliament is going to do it, they have they have some templates to follow either from the provincial governments or by looking to what FERC has already been doing. I I should say really quickly though, I alluded to 2 parts of the constitution act that that really apply to the idea of a western grid.

Kristen: 13:23

The first part would be the interprovincial works part that gives the federal government power to oversee, transmission systems that cross provincial borders, but then it's there is also very specifically in the constitution act, provinces have power over their own electricity system. So, I think it would be a much more difficult thing to give the federal government some kind of say in the distribution asset, whether that's the distribution system or, you know, distributed energy resources like DERs. So they're they're still going there's no way to have the federal government just create a fully Canadian grid.

Markham: 13:56

Right. One of the issues that, has come up, is the, the ability of the federal government, the willingness of the federal government I mean, I guess, the ability of the federal government to actually craft regulations. You and I had this conversation off camera this morning where we talked about this, and I used the example of industrial policy. Now industrial policy prior to 1980 was very much in vogue and was used by governments around the world, and then it kind of fell out of favor for more market oriented approaches. But now in part in response to, China's very aggressive use of it over the last 2 decades, it's having a comeback, and we see the inflation reduction act in the US is one example of that.

Markham: 14:40

And there is I I had the the, the good luck to have a conversation with an academic who's an expert in industrial policy. And he told me about work he was doing with the federal finance department here in Canada, and he said that there simply is no horsepower, within the department to do the policy. All the economists that they have, who used to do, industrial policy, who knew industrial policy, essentially have left the government, and they haven't hired hired any back. So when the government says, yeah. We're gonna put together an industrial policy strategy, they have no one to do it.

Markham: 15:21

And I wonder if the same we're not gonna have the same problem on the electricity side. So if the federal government decided that it wanted to get in this game, where would it which department would it reach into to get the expertise that it needs to draft those regulations, put together the strategy, manage the negotiations with the provinces, which would be very prickly as they as they always are. That seems to be a real constraint here.

Kristen: 15:45

It definitely is. A lack of capacity in terms of people who actually are very familiar with electricity systems and can actually sort of opine on the optimal policy if the federal government were going to try to draft regulations for permitting interprovincial transmission. There really isn't anybody, well, I shouldn't say that. There might be individual people in different, federal agencies like the CER, actually, who do have a pretty good working knowledge of electricity regulation. But because the federal government has never taken a fed an active role in the electricity system at all, there isn't going to be any kind of institutional knowledge.

Kristen: 16:20

So what you're looking at is there might be some individual people, but the institution, including the CER itself, does not have any institutional familiarity with electricity. So that means they have to go to the provincial regulators. They have to go to FERC. They have to ask because they have no expertise themselves. They can begin to hire people.

Kristen: 16:38

Although I have to tell you, it's interesting. Electricity is a extremely, extremely important part of the lives of everyday Canadians, but it is not something that many people know a lot about. So, you know, you in any given province, most of the people who know a lot about electricity are working for the crown corporations. They work for the investor owned utilities or they work for the regulator and maybe some of them are in academia, maybe some of them are like you, but you're not talking about a lot of people. So that's

Speaker 3: 17:07

So For those

Markham: 17:09

of us who like to see a western power grid, we gotta we have to hope that there's some lone soul up on parliament Hill who maybe has some experience about this and remembers how to do, electricity regulation. Well, I I think the odds of that are pretty pretty slim. But let's you've had a little bit of practical experience in this because you've been to academic conferences, you've talked to the utilities and folks who are involved in this industry, and you've talked to them about east west trade. And tell us about some of the insights that you gained from doing that.

Kristen: 17:40

I think, historically, there have been at various times calls to to do something to connect the provinces more deeply to each other's electricity systems. Because since the development of electric power in Canada at the turn of the century, Canada was fairly slow to electrify especially compared to the United States. There are great stories about how, electricity companies would, like, put on fares. They would have traveling fares in places like Ontario where they would demonstrate electric lights. And the people in Ontario were just like, I'm not really sure that I need this.

Kristen: 18:11

So it was not it it didn't sort of take off the same way that it did in the US. And then what we ended up with were were crown corporations building these big hydro resources. So I I do think that, you know, there are people with deep knowledge of how to do this kind of work in Canada but they it it my impression has always been that you just could not get the hydro provinces to see the economic upside of connecting to their neighbors. That's what I've heard time and time again is that it's always this idea that Saskatchewan and Alberta are asking, well, they're they're not really asking, but the sense is you have a couple of provinces that are dependent on fossil fuels. We need to help them.

Kristen: 18:52

We wean themselves off of them. They're right next to these big hydro hydro provinces that supply, what's called baseload power. So we're talking about clean energy hydropower that provides 247 electricity, unlike intermittent resources like wind or solar without battery storage. So there's a a bond of, like, well, why don't we just connect to them? Like, why don't we just start trading with each other?

Kristen: 19:13

And what I keep hearing time and time again from people at BC Hydro, from people at Manitoba Hydro, is that they're just like, but what's in it for us? We make money trading with the US. Trading to Alberta doesn't actually make us any money really. Like, we'll have to spend 1,000,000 to build the transmission lines it would take to actually integrate our 2 electric markets and then for what? Like, it's it's not worth it.

Kristen: 19:34

We won't make that money back, and we'll have to tell the taxpayers in BC or Manitoba or whatever the province is. We'll have to tell them we're gonna have to spend provincial money on this. It could cause your taxes to go up. It could cause your bills to go up, but it's for the good of the nation. You know, they they they don't see the the rationale, basically.

Kristen: 19:53

They they don't see why they should want they should do this.

Markham: 19:57

I I think the situation has changed with the energy transition and the economies around the globe. I interview economist, economic modeler Chris doctor Chris Bataille all the time about this. And and the the the rule of thumb amongst folks like him is that, by 2050, advanced economies like Canada and the US are going to have to double or triple their power grid and their electric, generation and emerging economies, it'll be 3 to 5 times. And this is borne out by what BC Hydro was doing. This is very interesting.

Markham: 20:32

I don't know Manitoba Hydro, which is ironic because my dad worked for Manitoba Hydro, and I worked for Manitoba Hydro for a year after high school. But then I escaped from Manitoba and never looked back, so that's my excuse. But in BC Hydro, they've brought, just, a few months ago, a 10 year capital plan. So finally, the government gave the, the the utility the policy direction to prepare for electrification of transportation, to prepare for more heat pumps, prepare for growth 2% growth in load demand, which the province hasn't seen for 20 years. And and so, part of that, part of that is where are they going to get that new supply?

Markham: 21:19

Because unlike Manitoba, which still has, room on the Nelson River way up where I grew up, in fact, which then empties into the Hudson Bay, they can build more dams and very large dams, I might add. Whereas BC has 30 or 32 of them, and once site c is done, they're not building another one. I I've interviewed a a BC, vice president years ago, and he said, we're done. We'll we'll we'll use wind and solar, or we'll even go title, but we're not building any more dams. And so in that capital plan, what it calls for is they are going to, encourage first nations, independent power producers, communities to build wind and solar, and then they will enter into 20 year power purchase agreements with those independent suppliers.

Markham: 22:06

That's where they're going to get the supplemental or the incremental, electricity, to, you know, supplement their their hydro dams. And so that wasn't around, you know, like, even 2 years ago. This is a very new thing, and I wonder if that isn't the the change in the game that will make BC more interested in doing east west trade than it was before, Kristen?

Kristen: 22:33

Possibly. In the past, British Columbia has made a commitment to buy additional wind and solar that it needs through Powerex from the United States. And so I think it's great that they are refocusing on IPPs, independent power producers within British Columbia, especially First Nations. But I I wouldn't be surprised if the thought now is that the backfill would be coming from the US, not from Alberta. Which is not to say that it couldn't come from Alberta.

Kristen: 22:59

It certainly could. And I think that there is a compelling narrative there that is a true narrative that by connecting with the tremendous wind and solar resources in Alberta, you are helping to decarbonize the country, which is something that I think a lot of people in British Columbia would be very much in favor of. The problem is that there's no transmission capacity for that now. So it's a different story if you're talking about buying within British Columbia. It may be possible in large part to connect new resources in British Columbia to existing transmission lines or to build merchant lines, the shorter transmission connections to the closest larger transmission line.

Kristen: 23:34

And then there's already some pretty significant transmission capacity between, for example, British Columbia and Washington state. So it's it's one of those things where it's a great idea, and I absolutely think that that British Columbia would be open to it, but someone has got to explain to British Columbia who is going to be paying for all this new transmission because transmission is monstrously expensive. I think there's a great argument to be made. This is another place where the federal government can step in, especially the infrastructure bank. But again, it's like getting people to believe it.

Kristen: 24:04

Get it get them to the table. Get them to actually talk about these things like they're serious options.

Markham: 24:10

You know what? The federal government has been on this already. We don't hear about it very often because, oh, I forget. 3, 4 years ago, 4, 5, maybe 5 years ago, they were talking about this. They were gonna put put some kind of an authority together.

Markham: 24:23

Remember, there was gonna be a, I can't even remember the name of it, but there was going to be something to get the provinces to the table to talk about east west trade, and, the federal government would share it. And then it kind of faded into the into the woodwork, and we haven't seen it again for for years now. But one at the same time, what they did was they introduced 1,000,000,000 of dollars of subsidies for the construction of transmission inner ties into the budget, and I forget which budget it was probably 3, 4 years ago. So there is already somewhere sloshing around in the federal financial system 1,000,000,000 of dollars to pay for those very intertines. And I would imagine that this particular government, which may not be around, when it's, these discussions if they ever come up, but if this government saw that there was some serious movement towards east west trade, and the inner ties were in fact the constraining factor, I'll bet that there would they they would open the big red checkbook.

Markham: 25:25

And, I mean, they're willing to pay 1,000,000,000 of dollars to subsidize carbon capture and storage for the oil sands. I can't imagine that for electricity, they wouldn't pay 1,000,000,000 and 1,000,000,000 of dollars to build those those intertives. And so I I think that from from my point of view, the money issue may in fact not be nearly as much of an impediment as it has been in the past.

Kristen: 25:50

I agree with you. The federal government has been for years now. The when when, Catherine McKenna was actually still, heading up the infrastructure bank, she very specifically said, this is something that we would do. This is what we would be interested in because it will help to decarbonize, Saskatchewan and Alberta. And as you said, it will help to add more capacity to BC and Manitoba that is non large scale hydro, which there's a lot of environmental reasons why a large scale hydro is if you don't have to build more of it, even if you're like Manitoba that could build more of it, that maybe isn't the best way to go because they are incredibly destructive to the surrounding ecosystem.

Kristen: 26:29

So they do deliver clean power but at a pretty high environmental cost. So I think there's a a great case to be made. It's just, again, like, it's such a it's just never happened before. So it's really trying to get people to stop kind of thinking of conventional solutions and start trying to think a little bit more outside of the box.

Markham: 26:46

I I wanna bring up this issue of of what is the rationale that we will convince British Columbians or Manitobans to get on board with this. And I don't think it's gonna be climate change. I I I really honestly don't think that that's enough of a motivator. I think it has to be economic. It has to be a pocketbook issue, and there are a couple here.

Markham: 27:03

One is the ability to use abundant, low cost, clean electricity as an economic development tool. And this is something that I I've been, you know, thumping the tub for for a long time, and it's becoming more obvious, all the time as we electrify our transportation and and our homes and so on. This is this is going to be, important. The other thing the the other issue is I did an interview about, oh, 4 years ago with, professor Kent Fellows, your old colleague at the University of Calgary, and he had done a study looking at site c. And because site c is way over budget and the and the cost per megawatt hour is going to be probably a $100 or a $150.

Markham: 27:47

It's outrageous how much it is. So he looked at that, and he said, if you were if you were taking the power that sightsee, generates and just selling it on the retail market, would it be economic? And the answer was no. He said you should just bulldoze the dam and be done with it because it's it would just be a money loser. He said, but but firm dispatchable power actually is priced much higher than, intermittent power.

Markham: 28:19

And if you then use the site c as a battery so that every megawatt hour that it produces and sold was actually of, at a much higher value because it was used to firm up the grid, was used as a battery, then in fact, site c did make economic sense. And I think that you could argue to the British to British Columbians, and I happen to be one of them, so I'd be open to this argument, is why would we sell our our hydroelectricity down to California or down to Washington at 2, 3, 4¢ a kilowatt hour when we could we could use it as part of an east west system, and we could make 10¢ a kilowatt hour or 12¢ a kilowatt hour using it to for that electricity to firm up the east west grid. And, you know, that only that argument only makes sense if you're having a conversation about an east west grid, which we're not ever doing, so it never comes up. But I think the economics of this are the really powerful and compelling argument that would get Canadians behind it and maybe move the utilities and maybe well, I mean, move the you move the government.

Markham: 29:30

The government tells the utility what to do, I mean, in theory, anyway. And I don't know. What do you what do you make of that argument?

Kristen: 29:36

I no. I think you're right because while it's true that, you know, Washington State, California, Oregon, when you think about them as markets, electricity markets with British Columbia, what you see is that the 2 of them each have things the other wants, But Alberta and British Columbia each have something the other needs. So BC has a need for more peaking and load following generation that comes from It can come from ideally wind and solar, battery storage, maybe even some new technologies that are coming out that Alberta as a sort of technical hotbed, lots of engineers, lots of, like, innovation in Alberta has really been, you know, investigating a lot of these sort of newer technologies in a way that you don't see in places like BC because they have hydropower and there's I think maybe less of a sense of urgency about these types of things. But Alberta needs the firm clean power. It doesn't have that And that's what BC has.

Kristen: 30:25

BC needs that peaking and low following generation, which is what Alberta has if they had sufficient wind and solar power built out. And bringing it back to the idea about what could the federal government do. Well, if you look to the way that it's done in the United States, one of what you could do is have the federal government organize, or perhaps even mandate the creation of a electric system operator for the west for Western Canada. Because that's what that's one of the things that, system operators can do is that they can run, they can run electricity, a generation market that is several different jurisdictions, but just one market. Because that's the other piece that you need is it's really difficult to see the economic benefits if you just say, like, well, it's just, you know, BC high BC Hydro is buying power from Fortis Alberta, and Alberta is buying power from BC Hydro or from Fortis, BC.

Kristen: 31:19

If that's the way you're doing it, it can be difficult to see the economic upside. It's not as hard to see the upside though if you have someone who actually can see, the needs of multiple jurisdictions at the same time. Because there's no question, I think, the the cell in Alberta too is that Alberta really needs species power. There have been half a dozen events in the last 3 years where if it had not been for the one interconnection with British Columbia and the ability to bring power over when needed, the electric grid in Alberta would have gone dark. So there's also there are there are many different benefits to having these deep interconnections as well.

Markham: 31:54

I wanna make the point that while there needs to be intertieds built out between BC and Alberta to make this work, it's also true that the, the intertie the transmission system that runs south down from the US border down number 5 into Washington state and in and then into California is also congested. I mean, there's no way to substantially increase the amount of power that BC is selling to the the United States without building out that transmission system. So one way or another, whether you whether the federal government in Canada invested east west inner ties or somebody, whoever that somebody is, builds out the transmission system that follows the number 5 north and south, somewhere trans we need more transmission, is required, in the not too distant distant future. But I wanna follow-up your comment about, the federal government setting up an an independent system operator. This is fascinating to me because, David Gray, who's an energy economist, couldn't join us today, unfortunately.

Markham: 32:58

But, he was involved in the design of the original markets back in, in Alberta in the late nineties, and he's been very outspoken on the the dysfunction in Alberta electricity markets. But his he's working on this, campaign for the, the electric, sorry, the energy circle. And his idea was a federal crown corporation that would would both, build out the transmission and do the selling east and west. And it sounds like that his idea is very similar to your idea about a federal independent system operator.

Kristen: 33:36

Yeah. A regional operator. The certainly, the idea of a crown corporation is an interesting one. We not that different actually. What he's talking about, I think, is having a crown corporation that essentially functions as a trader.

Kristen: 33:49

And so that is definitely something, especially in the early years of trying to develop a new type of market like this, that's definitely a possibility. It also doing that also can help to prevent price spikes that can happen from whenever you set up a a new, trading system for electricity, you try to and and at this point, I think we're really operating with the benefit of decades of hindsight, both in Canada and the US. But you can see that the Alberta generation market is not competitive. It's dominated by, these big companies that have engaged in economic withholding and have been able to manipulate electricity prices. And so you do not want to see that happen on the interprovincial level, especially when you're talking about something that's a relatively fragile new thing.

Kristen: 34:34

And so I do think the benefits of having a federal crown corporation acting as an energy trader, one of the things that they can do is prevent price manipulation, price gouging, attempts to take advantage, in a way that could actually turn people against this, you know, what I think is actually something that will really pay off. But anytime you do something like this, there's going to be problems in the beginning. So there's I think there's something to be said for both a regional operator, but also a crown corporation that is, you know, handling trades to make sure that people are being treated fairly on both sides of provincial borders.

Markham: 35:07

So we have the idea of a re a federally owned regional trader, that would operate on an east west basis, and we have the idea of a regional independent system operator that handles east west electricity flows. And would those be could those be the same organization?

Kristen: 35:26

I don't think so because the trader the Crown Corporation that acts as a trader would actually be dealing with the the regional transit. So I'm just gonna call it a regional transmission organization. RTOs and ISOs are basically the same thing. It's just that I like the regional part of the RTO to distinguish it from the ISOs that exist already in in Canada, like the AESO. So, they they're not the same though.

Kristen: 35:49

So you you I think you don't want, any accusations of conflict of interest because the Crown Corporation would be acting like a market participant that would be obeying the rules of the regional transmission organization, and they would be acting as someone who's selling to the regional transmission organization into that market. So I don't think that you want them to be the same. I think you would want them to be different. I think the ultimate goal, if possible, would be to phase it out, the crown corporation. That is generally what's done when you have a government actor participating in the market because you that's not ultimately what you want.

Kristen: 36:24

It's just there to, you know, again, to prevent price gouging, price manipulation because you've got a lot of, like, monopoly behavior, in all the provinces actually when it comes to electricity. So we wanna make sure that the economic upside is is not the upside to the industrial actors is not canceling out the benefits to the ratepayers.

Markham: 36:46

Yeah. We don't need 4 and runs.

Kristen: 36:48

Exactly. We don't need that. No. No. No.

Kristen: 36:50

We don't want that.

Markham: 36:51

Well, look. I'm gonna ask one final question, folks. So if you can start raising your hand, we'll start, afterward, Kristen and I are finished with this last question, then I'll begin calling on you, and I'll I'll call on you, and you have the floor, and, you can then, at that point, open up your mic. So, Kristen, last question for our our interview, and that is, what about the politics of this? And this is where it gets really tricky, and I've heard it described many times that the biggest impediment to more east west trade is just the politics.

Markham: 37:27

You know, there's utilities don't wanna work with each other and governments don't like each other and, you know, there's a liberal government in one place or an NDP government in one place and a conservative government in Alberta, which there always seems to be, and and then that scuppers things. What's your take on that?

Kristen: 37:44

That that is definitely a problem. The politics are a big part of it. You know, it used to be in British Columbia. There was actually, a I think it was actually part of the official, policy for buying renewable power that BC would not be buying renewable power from Alberta because it was dependent on fossil fuels, but there's like a political edge to that. And then Alberta has this really important intertie with BC, but it's not something I mean, I think it's become something people are more aware of recently, but, of course, the current party in power in Alberta, I think, very much gets quite a lot of mileage out of making itself seem like it's opposing all these evil liberal forces, which would be both the creation of this regional system and having to deal with British Columbia.

Kristen: 38:25

So I think as you said, the way that you get this to overcome politics is you convince everybody that they are getting the best deal. Like, it's not you know, British Columbia, you are saving Alberta's butt. And, yeah, and also you're buying all this renewables. And, yeah, it's gonna make us all this money, and it's gonna be great. And then Alberta, you're really saving British Columbia's butt.

Kristen: 38:43

Like, it's a good thing that you have all this wind and solar power and all this innovative genius here in the home of oil and gas. And you you basically have to, I think, tell a true story, which is that everybody wins.

Markham: 38:55

So they're stressing the selling the benefits of, east west trade and any kind of a a recommended system, you know, with the independent system operator and a trader, that sort of thing. It's you have to if there are 4 provinces at the table, the folks in the Canadian the Canadians in all of those provinces have to be sold on the benefits, and, the political support has to be there for this kind of a a an arrangement to work.

Kristen: 39:22

I think so. As much as you can get. You can't make everybody happy. You'll never convince everyone. But I I do think that you need to have that.

Kristen: 39:29

And I think it's important for people to recognize too that nothing like this has ever been done before. All of those oil and gas pipelines that we have, those are owned by private companies. It's a different thing altogether when you're talking about connecting provinces. And it really is with respect to Saskatchewan, Manitoba, and BC. It is the provinces.

Kristen: 39:46

These are crown corporations. There is a very strong connection between the people that live in those provinces and their expectations from their crown corporation. That is not something that people in Alberta have necessarily, but I think it's something we need to be cognizant of.

Markham: 40:00

One final question before I get to Roy. Can the federal government make the provinces do this?

Kristen: 40:09

I don't think they can make them do it, but even more importantly, I don't think they should make them do it. I think that they should be able to make the case that you'd be a fool not to do it. I think that's the best way to go. I think trying to make them do it is exactly how you get provinces, especially like Alberta, but trying to make a province do something, especially with respect to electricity has not worked out historically. It's one of the reasons why Ottawa has never gotten involved beginning with Churchill Falls and trying to make Quebec do something.

Kristen: 40:41

Like, it if you can avoid that, I think you should.

Markham: 40:45

I think that's very good advice. Roy, you your hand is up, and you have the floor, sir.

Speaker 3: 40:55

K. And I won't make the same mistake. I've made it last live meeting. I have a question that I'm gonna come out right out with. You're a legal person, so I Christian, thank you.

Speaker 3: 41:06

By by the way, this has been very enlightening. And and some of the enlightenment comes from you know, you've mentioned the Fed's lack of expert tease in this kind of stuff, and I have personally seen that in my business with them. You know, I work with NRCan over the years, and every once in a while, I got a question from one of the highest level people at Enercan about something that's ego what? You don't know that already? You know?

Speaker 3: 41:37

So, yeah, it's a big deal. And so we have the problem is when it ends up happening is do they go to the loudest and most generous lobbyists to get their information? And the answer is probably, yeah, because that's where they're getting their information. There's really great people at Enercan, but, you know, I see it over and over again. I'm just not able to handle all this.

Speaker 3: 42:04

So my question is, like, what, what do we do to try and get, you know, from a legal standpoint, what, you know, what drives this? Like, the government has responsibilities. They have legal you know? Uh-huh. Where do we push this?

Speaker 3: 42:24

What what buttons do we push here to make them get the expertise? Because I think that's one of the biggest things they have to believe. Like, I'm I'm not a big the biggest fan of the federal government. I don't think you're evil Like, certain people in this country say they're trying to do a good job. And so but to do that, they need to believe in what happening.

Speaker 3: 42:48

And to believe in it, they have to get the right numb the right information. How do we get that to them? What can we do as a group our group and other groups to say, okay. You you're you're in the wrong you you gotta listen to these people, that those people. I you know, it's a this is a broad ranging question, but it's important.

Kristen: 43:09

That is a really good question. I also have had the experience of having people from, federal agencies at a very high level ask me questions that made it very clear that they really wanted to do something, they just did not know what to do. And so I get the feeling, my thought about this is that's why it's so important to have groups like the energy circle because I think what they really want, and I think that all of us in a way have a dream like this. They want someone to tell them exactly what to do and to make the arguments for them, show them exactly why this is something that can work. It's something that would be we would it makes no sense not to do it.

Kristen: 43:48

Canada is blessed with tremendous natural resources for the generation of electricity. The technologies are only getting better. They're getting cheaper. The demand for electricity is not going down, especially with industrialization and increasing digitization. Everybody who consumes electricity is gonna need more and more and more.

Kristen: 44:06

And so it doesn't make sense to not do this now. But I think what they need is they need people to show them, here's the technical way to do it. Here's what you start with. These are the lines we need to begin with. This is how we need to structure the market.

Kristen: 44:19

We need to have this regional organization if you, you know, went that way. We'll have a crown corporation training company to make sure that there's no price gouging or manipulation of the market. This is how you bring them to the table. And then I I think that's how you do it. You basically give them a blueprint and say, now just press the button.

Kristen: 44:37

So Well, Chris and I have easy, budge. Yeah.

Markham: 44:40

No. I I couldn't I couldn't agree more. And, one of the points that, is, driven home to me over and over again as I report on energy stories within Canada, particularly in Alberta, is the lack of leadership. And, I often I remember, you know, 5 years ago no. 6 years ago because it was 2018.

Markham: 45:01

And I was in Calgary, and the Ecotrust Foundation had asked me to be a keynote speaker at an event. And at during the q and a, somebody said, what's the one thing that has to change for us to begin, you know, Canada or Alberta to begin adapting and and do the energy transition? And I said then leadership, because the leaders don't get it. They're they're more interested in protecting the, incumbencies, the incumbents, you know, like the utilities and the oil and gas companies, and this and the basic system, than they are in responding and adapting to rapid change, and that's that's a really serious problem. And lo and behold, here we are 6 years later, and the same issue, leadership.

Markham: 45:45

Who's who's going to lead this process? Who's gonna show the federal government how it needs to be done? Who's going to bring the the provinces to the table and convince everyone in those various provinces that this is a good deal for them, good deal for the government, good deal for the utility, for their crown corporation, and and so on. And, you know, nobody's stepping up. So I guess, for some of you who aren't familiar, we have at Energy Media, we've sort of fomented the creation of the energy circle, which is a citizen led, initiative to both educate around, energy transition issues and also to create campaigns for various changes that need to be made.

Markham: 46:31

And one of those we have 4 campaigns underway now, and one of them will be to put together to try to stimulate the creation of east west power grid, east west system that allows the 4 provinces to to trade electricity for all the benefits that we've talked about, today. So, we need some folks to put up their hands, so that I can call on them. And while we're waiting to do that, I wanna, Kristen, I wanna bring up an example because I saw James Van Lewin here from Pincher Creek. And James and I, and in the meetups and so on that we've been having lately, we've been talking a lot about electricity, clean, abundant, cheap, electricity as an economic development tool. His circumstances and the circumstances of Southwest Alberta, where they have a lot of wind power, are very unique, and they also have access to, trunk lines data trunk lines.

Markham: 47:40

And the explosion of, artificial intelligence over the last year or 2, and the absolute mushrooming of data centers all over the world and the the the energy demand, the electricity demand from those data centers is nothing short of of a it's a gold rush. And Pincher Creek, and James, they think that they can get get in on that. And so, that's one of the reasons why I I just what I wanted to do is ask you what you thought of that. You know, is that something that's come up in conversation? Is there academic literature on it?

Markham: 48:16

What any insights you can share with us?

Kristen: 48:18

This is, I think, one of the reasons why there is, I think, a continuing belief that we need more transmission. There's a renewed interest in DERs, Distributed Energy Resources in virtual power plants, building things on the distribution side because that doesn't require building transmission, which has a lot of pluses. Building transmission is extremely difficult to do. It takes many years. There's a lot of resistance to it.

Kristen: 48:45

It's very expensive. But I think it's also pretty clear that because there is going to be this continued demand and not just it's not just power, it needs to be 247 and it needs to be clean. That's what these companies want. That's what they need. And so any province that can supply that to them is going to be a place of great interest to these industrial actors.

Kristen: 49:13

So there's a huge economic benefit to being able to supply reliable, clean power, And it probably will need at least some of it is going to need to be utility scale. So it it will need to be sent via transmission. Because there are so many incredible technologies coming out. There's so much awareness now of what can be done with virtual power plants, DERs. But I think there's also an understanding that what we're beginning to see though is that there are different types of consumers, which is always true, but the power that they need is not always the same.

Kristen: 49:45

So that's an additional wrinkle. How do you plan your electricity grid when there are these different consumers that are going to need such different things? And in some cases, it's long been true in Alberta that industry consumes more power than residential customers do. That has not been true in other provinces, but it might be soon. And they are not ready.

Kristen: 50:05

So

Markham: 50:06

Yeah. That's that that's something that we're seeing in the United States right now is this, like, you know, thanks to in part to federal spending around the inflation reduction act, the infrastructure act, the chips and science act, is there's been a just a mushrooming, an explosion of of of new manufacturing plants. I think, I was reading a Bloomberg article the other day that said there might have been 2 or 300 new ones launched, just in the last year or 2. And one of the things that's doing is is, increasing the demand for electricity, And that then puts strain on, you know, new generation and new transmission and new distribution and or is it gonna be DER? You know, where are they gonna self generate on-site and not be plugged into the grid?

Markham: 50:46

I mean, the the it's it's things are changing so fast. I I remember back in the nineties, I was kind of on the edge of the of the Internet boom, and and we started talking about this Internet time. We're gonna do things in Internet time. And Internet time ain't got nothing on energy transition time because the pace at which the global energy system is changing and capital is flowing into these new areas and new technologies are coming, are transforming industries or parts of industries is nothing short of spectacular. And I think in Canada, and I will say, I think, especially in Alberta, which is so bent on protecting the status quo, that we just really don't have our arms around this issue yet.

Markham: 51:34

I just your thoughts, please.

Kristen: 51:36

No. I agree with that. And I do wanna say that, when I talk about I don't actually think it's DER versus, like, utility scale transmission, generation. I think it's both. I I think it's not either or I think it's end.

Kristen: 51:47

I think it's both. Alberta is such a frustrating place because on the one hand, it's got the the disaggregated electricity market in Alberta is the closest thing, to an American style. Like, this really could be a kind of, like, energy gold rush because of the opportunities for, companies that then build wind and solar, which Alberta began to see. I mean, before the moratorium, the amount of new proposals for wind and solar, facilities was insane. I knew people at the AUC who would just endlessly complain that most of their time they were having trouble making time for rate cases because they they have so many hearings about new, especially solar in the last few years.

Kristen: 52:25

I mean, in the past, it was wind and then it was a huge thing for solar, And then there came the moratorium, which was just there is a problem with Alberta with renewables, but it's not the fact that so many people want to build them. It's the fact that Alberta doesn't actually have any way to plan their generation build out. They deliberately deregulated the generation market and then just left it there. So it there is no planning capacity. The agency has no ability to actually do things in a thoughtful way.

Kristen: 52:52

They just trust in the fact that the economics of it will make it work out. Like, well, nobody's gonna build it if it doesn't if you can't make money. Right? So that will the problem will fix itself. No.

Kristen: 53:01

The problem isn't gonna fix itself. And the moratorium has strangled this incredibly vibrant market in Alberta, when what they should have been doing was thinking about how do we actually create a new set of regulations that allow Alberta to add huge amounts of wind and solar and other types of new technologies in a way that makes sense. Not just like willy nilly whoever wants to spend the money. That's my own personal feeling about that.

Markham: 53:27

Well, I think that's really that that your insight, is consistent with what I've seen, and I wanna provide, an insight that I got from an interviewee in the in the, recent past. And this was provided to me off the record, and so I can't say anything that would identify this person. But they had worked in the oil and gas industry for 2, 3 decades and and moved into the Alberta government around the time that the government was drafting the document that came out last year. It was called the emissions reduction in energy development, plan or strategy. And the point that this person made was that it was an entirely political document.

Markham: 54:09

There was nobody with oil and gas or power sector or any kind of energy experience and expertise involved in writing that document. The the the report was an entirely a political affair, and I suspect that that for far too many of these and then the moratorium, I think, illustrates this quite nicely. It's political. We're not doing it for regulatory reasons. We're not doing it for economic reasons.

Markham: 54:44

We're not doing because it makes sense or because we're adapting to changes in our global markets, any of that. We're doing it for politics. And then we get the the people that are in there. You know? I don't know if they're 25 year old poli sci graduates from the University of Calgary, you know, or what I don't know who just well, I do know some of the people who are doing it because and I've said this before, so I'll say it again.

Markham: 55:04

I get drunk emails. I get drunk and I got a drunk email from the, former chief of staff of, premier Kenny and talking about that very plan and that person that had a fair amount of input into it, and it was incoherent. The email made no sense whatsoever. If a if a grade 5 student had emailed it to me, it would have made more sense. And my thought at the time was, good lord.

Markham: 55:34

This is the caliber of person who is drafting these very important plans for the Alberta energy system. And and then I've had that insight reinforced over and over and over again over the past year or 2. And so it's no wonder that we don't have a a strategy. We don't have a an institution or an organization responsible for this. We don't even do it within the Alberta Energy Energy, Department of Energy.

Markham: 56:03

This is a I mean, this is so basic when it comes to running energy systems and running energy economies is you have to have planning and regulation and resources dedicated. And Alberta, it just seems completely and utterly dysfunctional and happy to be that way because it works through the interest of those who are already incumbents. And I I apologize for my rant, but this has been a long time coming, and it is a serious problem. And, it's not that the other provinces don't have their own similar problems, which I'm sure they do, but this one is, I think, most acute in Alberta. James Van Lewin, you are next, sir.

Markham: 56:43

You have the floor.

Speaker 4: 56:45

Thank you, Markham, and, thanks for bringing up the, the data center context. It's it's getting very interesting. More more stuff that I'll share another time. But, the lack of a strategy and, what I would describe as strategic capacity within Alberta is a serious liability to our being able to respond to these changing realities, energy transition and digital transformation as well. And the data center industry development opportunity is both of those.

Speaker 4: 57:17

It capitalizes on both. So on the one hand, very exciting, but on the other hand, for lack of any kind of a strategy, it's really hard to get investors to take Alberta seriously as a place where they can invest safely. And I think the practical question at this point for Alberta is where could we start in developing a strategy and actually beginning to rally the people whom we need in order to really craft a robust strategy? 1st and foremost, the people with the expertise that we need. So I I wanna give Mark, all the credit he deserves here for taking the initiative with the energy circles.

Speaker 4: 57:56

Hopefully, this is gonna attract more and more talent and capability. But do you site do you see something else, any other opportunities, that are available to us here in Alberta to really advance this agenda, this this strategic or strategy development agenda expediently? We have to really get this on the rails.

Kristen: 58:17

That is a really tough question. It's the expedience problem that's an issue because the most rapid build out of generation that was happening in Alberta was coming from renewables. So the the moratorium really hit that pretty hard. Expedience, if you're talking about trying to make it possible for the data centers to the the electricity that they need faster, the most expedient thing I would think would be to change the regulations about the AUC's permitting requirements for small generation installations, because that would make it possible for more of the data centers to build their own distributed power for themselves. But again, like, that can be problematic.

Kristen: 58:53

What we saw in Alberta was that some of these data centers were building natural gas essentially, like generators for themselves without telling anybody. And so there's it's really difficult to do this in a way that's quick that provides the kind of power that they need and the power that they want. Because I think that we're starting so far behind the 8 ball when it comes to having when it comes to doing anything about the problems that we currently have with the electric system the way that it already is in Alberta. So, I mean, Markham was sort of alluding to this, but the oil and gas industry has made demands on the electricity system that have really worked against ratepayers, including industrial ratepayers. For example, they demand 0 congestion transmission, which means that we have overbuilt transmission, but not like a big footprint.

Kristen: 59:37

We have a lot of repeated transmission lines because oil and gas companies didn't want any congestion pricing. So we've overbuilt transmission in some places which drives up the fixed cost of electricity, but then also a lot of the other gas companies got sick of paying their power bills. So they actually self supply their own power and then sell back into the grid. And so they were able to do that in a fairly expedient way, usually using combined cycle natural gas. And I probably the fastest way to go about it would be to say, well, build your data center closer to the oil and gas operation so maybe you can actually buy directly from them.

Speaker 3: 01:00:08

Okay.

Kristen: 01:00:09

Because I they already have their own power plants and that's yeah. That is something I don't know how many people know that but it it just they they have the ability to build their own self supplying power in a very expedient way. And so oil sands. And thank power the real sands.

Speaker 4: 01:00:33

And thank you very much. I from a risk management standpoint, that makes a lot of sense. And, one last question, if you if you can indulge me here. Australia has developed a strategy now. Australia 4.0, it's through a philanthropic foundation down there called the Pearsidy Foundation.

Speaker 4: 01:00:53

Have you studied Australia's footprint? I mean, we have a similar history, you know, as colonies of the British Empire, and to varying degrees, we still resemble each other in in some ways. Do we have much to learn from Australia? And especially these initiatives they're taking?

Kristen: 01:01:09

You know, I have to admit, James, I'm not that familiar with with Australia's electricity policy. In teaching energy law, I'm a little bit familiar with their mining industry because it's so powerful. I mean, Australia, I think, has a lot of lessons to deliver, especially for Canada because as you say, not only is their status as part of the former British Empire at Commonwealth Country the same, And so they're also working from within this common law structure. This British legal structure underpins a lot of their regulatory processes and and structures. But they're also extraordinarily dependent on natural resources for most of their money.

Kristen: 01:01:44

And so that is definitely something you can see that Australia also really struggles with how to meet environmental obligations, especially because Australia has some very unique ecosystems that don't exist anywhere else in the world, but they also make most of their money through mining and other natural gas operations. So I I I think what we might have to learn from them I'm afraid I can't get anything specific because I'm embarrassingly not very up to speed with what they're doing with electricity in Australia. But I think to the extent that they have got anything figured out when it I don't think they have the same kind of balkanization between the Australian states as we do in Canada between the provinces. I don't get that impression. But I would be interested to know what does Australia do when they want to try to invest in innovative solutions that are against the interest of established natural resources industries.

Kristen: 01:02:36

That I think would be how do you walk that line between innovating and meeting the future, especially with something like power demand. Do it in doing it in a way that acknowledges that the future is clean power, but also do it in such a way that you are not constantly running directly into incredibly wealthy, powerful mining and other natural resources interest. Mining for them, oil and gas for us.

Speaker 4: 01:02:59

That's a really practical takeaway question. Thank you. And, and I I wanna thank both and you and Markham for creating this opportunity. This has been really, really informative. Thank you.

Kristen: 01:03:09

Thank you.

Markham: 01:03:09

Thanks, James. I I have I have a question for you, Kristen, because you brought it up a number of times. You've talked about entrenched interest. You've talked about the, oligopolies, utility oligopolies in the Alberta power system. And do you have any insights that you can share with us on how the power of incumbents can be broken?

Markham: 01:03:33

Because what I I interviewed, Val Jensen, who used to be a an ill a vice president at an Illinois investor owned utility years ago when he became a consultant, and I was, talking to him about changes in utility business models. And he said, there's big change coming, and the one thing you have to do is do not let the utilities gatekeep. Do not put them in charge of the process. Do not let them have undue pro influence over the process. Because as incumbents, they will always gatekeep, and they will gatekeep information.

Markham: 01:04:08

They will gatekeep access to the process, and they will manipulate it for their own benefit, which okay. So that's the way things work in the real world. How do we we see that happening in Alberta in a huge way, of course, oil and gas, but then also in the utility in the electricity system with the utilities. Any insights on how that could be dealt with?

Kristen: 01:04:30

I think this actually goes to the ideas of having a regional transmission operator and a crown corporation, as an active market participant, at least in the early days of creating an east to west electricity market. I think it's really this is where I think you really see the federal government needs to be a part of this. That's how you break up the power of the incumbents. The incumbents protect their own market position in a variety of different ways. One of the things that you see between that and we don't necessarily think of BC Hydro, for example, as being like an evil corporation, but BC Hydro is a monopoly.

Kristen: 01:05:04

And so one of the things that you have to you have to overcome with monopolies is their refusal to share information or data. You can't expect an electricity market to create itself when you have actors who will not share information with each other. That is one of the biggest ways that incumbents protect their market position. They simply will not give you any information. And so you're kind of operating in the dark.

Kristen: 01:05:29

You're trying to guess what's going to be, you know, an acceptable price. You're guessing what a competitive market would look like because you just don't have the information that you actually need. The only the only entity out there that could both make the provinces give them this information or make private companies within the provinces give them this information, but also be able to guarantee that the information won't be publicly disseminated is the federal government. They can say you need to give us all the information as part of being a member of this regional transmission group. But that information is confidential.

Kristen: 01:06:03

It's protected. We're not going to use it so that you will lose your market share. We're not gonna do it so that SaskPower can somehow, like, you know, profit off of the work of BC Hydro. And I think that's what you need. You need essentially, like, a neutral third party who's not in it for the money to say, you can give your information to me.

Markham: 01:06:22

One more argument for having the federal government intimately involved in this and and have its hand get its hands dirty, if you will. Roy, you've got your hands up, hand up. So, you have the floor, sir.

Speaker 3: 01:06:36

K. One last question, and this is this is, you know, Kristen, I'm glad you're a legal person. Full disclosure here. I'm the local rabble rouser for a group called Sioux Big Oil in, Parksville, Qualicum Beach, West Coast Environmental Law. I'm not sure if you're familiar with them, but they're they're running this campaign.

Speaker 3: 01:07:00

And, you know, when I saw this moratorium put on by the the Alberta government, I thought, can't people can't connect, can they be sued for this? Like, this is insane what they're doing. Right? So I guess what I'm saying is you, you, you have a better understanding. So sue big oil is a, an attempt to put together a class action lawsuit by municipalities in British Columbia, based on the fact that they are going to have unusual and, expensive costs to accrue due to climate change.

Speaker 3: 01:07:40

And so, you know, I don't know if it's gonna whether we're tilting at at windmills here or what. What what's your opinion on this? You know, I mean, more and more I mean, city Chicago. Right? They're they're gonna sue big oil.

Speaker 3: 01:07:55

But is this a a legitimate and, reasonable way to approach trying to expedite, as you say. Like, let's get things happening here. You know? So, anyways, over to you.

Kristen: 01:08:11

Do you mean are you do you mean is there is it a viable strategy, for example, with respect to the moratorium for the the wind and solar companies to sue the Alberta government?

Speaker 3: 01:08:22

Yeah. I think that and, not Oh, no

Kristen: 01:08:30

Oh, I'm so sorry. For some reason, I'm not able to hear you. I'll go ahead and answer the first part. It's it's a harder question about suing big oil because I think there's ongoing litigation of citizen groups trying to sue the oil and gas industry, on and there's, I think, multiple legal theories upon which the different parties are basing their arguments depending on the country that they're in. With respect to Alberta and the moratorium, that so they're actually I think there is a legal foundation for suing the Alberta government if, the companies have already spent money.

Kristen: 01:09:02

Because once you begin to spend money on obtaining permits on buying, equipment, you have what's called a vested right. So by taking away the value of property that you've procured, if you can't get reimbursed for it, you can sue the Alberta government for reimbursement, for taking away your vested property rights essentially. I I don't know whether or not any companies have done that. It's possibly that it's possible that they haven't done it because the thing about a government like the current government in Alberta is that you have to think carefully and strategically. Is it actually worth it to sue them or do you plan on ever doing business here again?

Kristen: 01:09:37

So I there may be kind of a sense of maybe we should just wait and see what happens. You know, the moratorium, it it doesn't it it's very it's just insupportable. It's clearly a political move. I do think that there's room to sue, but I think there's room to sue. He's coming in for the moratorium to be lifted.

Kristen: 01:09:56

But I think as Markham alluded to, the problem for Alberta is that it does have a chilling effect on future investment by wind and solar companies, especially international companies. Because obviously the Alberta government has no problem with taking a look at a robust industry that is turning a profit but is threatening the profits of other entrenched interest including, incumbent generation owners in Alberta and is willing to tell them to stop. And so that is the kind of regulatory uncertainty that can absolutely have a chilling effect on investment. Well, my goodness. Grist for a

Markham: 01:10:31

whole another interview. You have a moratorium. Interview. You have a moratorium. Roy, I have I muted you.

Markham: 01:10:39

Sorry, man. We're we're out of time for any more questions from you. Paul, you're up next, so you have the floor, sir. You can unmute your mic.

Speaker 5: 01:10:49

Quick question. Both BC and Alberta are members of WEC, and you have Manitoba and Saskatchewan that are dealing with MISO. Do you see any legal impediments that basically these US entities of which the provinces are often members could be, if not, forcing at least stimulating some type of transmission and trade between the provinces in Canada.

Kristen: 01:11:16

I'm really glad that you asked me this question, Paul, because I have kind of a crack theory that I think actually does have some legal legs that goes to this idea. So as far as WEC, the Western Interconnection, that I don't think so because that's really that's NERC. Right? The the North American Reliability Corporation, which is not an actual regulator. So they don't actually have their authority comes from, I think, industry norms and, the industry not wanting any particular government to get more tough with them when it comes to reliability standards.

Kristen: 01:11:46

So I don't know that WEC gets you there, but I do think actually there's an argument to be made. So any, electric company that sells, generation or that how I should say any company that sells, generated electricity and owns transmission in the United States has to file an open access transmission tariff on the public record. So the open access transmission tariff means that any generator can connect to that transmission line, for the same price, pays the same price. Everybody pays the same price. And this was one of the things that FERC did, when it was creating a competitive market for generation because they were concerned that otherwise the former vertically integrated monopolies would make it so like they'd say, like, sure, you can connect to my transmission line.

Kristen: 01:12:27

It'll be $10,000,000 And so without even having to do anything, they've destroyed a competitive generation sector by making it impossible to sell your product. So the open access transmission tariff prevents that from happening. FERC rules require that, for example, BC Hydro owns transmission assets in the United States, so do companies in Alberta, so does Manitoba Hydro, so does SaskPower. That means that they have open access transmission tariffs on file, and I think an argument could be made that they should be a complaint could be made to FERC that if they're not using their open access transmission tariff even within Canada, that they have violated FERC anti monopoly rules. Just a theory.

Markham: 01:13:11

Oh, wouldn't that be interesting? And I and I guess that would be probably an an application to FERC or maybe even a lawsuit to challenge

Kristen: 01:13:18

Yeah. Because that's I mean, it is true. Generally speaking, FERC regulations wouldn't have extraterritorial effect, but it's also true that as, you know, an entity subject to FERC BC Hydro, for example, has agreed to have an open access transmission tariff for all of its transmission lines. So if it tries to charge a different price just because the utility is now located in Alberta, I think there's an argument that it's a violation of FERC rules.

Markham: 01:13:45

Well, Kristen, this has been a fascinating conversation. I really appreciate the time you've, you've set aside to talk to us. Thank you very much for this. Really appreciate it.

Kristen: 01:13:54

Thank you all so much for having me too. I'm so sorry I couldn't get to any of the questions in the chat either, but, yes, thank you all for having me.