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Electricity Canada releases 'Back to Bonbright' Report
Report by Utilis outlines how economic regulation fundamentals can enable net zero
May 10, 2023 TORONTO, ON --
Report Link:
https://issuu.com/canadianelectricityassociation/docs/ec_sel_frame_-_2023_21_
Utilis is excited to announce the release of Electricity Canada's report, Back to Bonbright: Economic regulation fundamentals can enable net zero, prepared by Utilis Consulting (Report). Recent studies are in agreement that, even under the best-case scenarios for the emergence of new technologies such as hydrogen, electricity will be required to play a central role in the energy transition. As a result, electric utilities are critical to achieving net zero. However, before tackling the literal and physical challenges of rising to this monumental task, relevant governing bodies must first ask; do electric utilities operate within governance and regulatory structures capable of facilitating the achievement of net zero?
The Report catalogues the Bonbright Principles and commonly accepted Regulatory Constructs to assess their consistency with the achievement of net zero, and reports on interviews with regulatory professionals across numerous Canadian jurisdictions, including a healthy cross-section of perspectives amongst participants in the regulatory process. The Report concludes that while evolution of some regulatory constructs is required, the fundamentals of economic regulation can continue to serve as a foundation for energy regulators, provided interpretation takes present-day context into account. To respond to new pressures facing electric utilities from governments and customers, more flexibility is required for utilities to pro-actively submit innovative proposals. Conversely, regulators must be sufficiently resourced and maintain their independent decision-making capacity, empowering them to review more novel and innovative proposals. Finally, governments must set clear, outcome-based policy to provide a common understanding of required objectives; establishing the “What”, while leaving the “How” to regulators and utilities.
"Regulation is the backbone of any large-scale public investment, and Bonbright’s principles for regulation are the foundation of public utility pricing theories and policies and form the basis of the rates the public pay utilities. However, such principles pre-date concerns about climate change. This new report states that Bonbright’s principles can indeed work in a world driven by concerns around climate change and net zero. The report discusses different options and regulatory mechanisms that can enable regulators to support technologies that can help the world of 2023—and into the future."
- Electricity Canada
To discuss needs or engagements where the Utilis Team can help your organization, please email Utilis at admin@utilisconsulting.ca
General Website: utilisconsulting.ca
Founders: Brandon.ott@utilisconsulting.ca, Andrew.mandyam@utilisconsulting.ca
Utilis Consulting Inc. is a Canadian consulting firm specializing in utility regulatory consulting, research, rate modelling, and intelligence services. With over 70 years of combined experience in Canadian energy regulation and utility management, Utilis has rapidly expanded since its founding in Q4 2020, providing value to electricity and natural gas distributors, generators, associations, and regulatory professionals.
