Current Affairs

Issue 70 - October 2024

Growth in Mutual Assistance

When extreme weather or other damaging events occur within a specific service territory, utilities can call on neighbouring utilities to assist in the restoration process called ‘mutual assistance’. In 2021, Electricity Canada developed a pilot program to act as the single point of contact for our members to assist in this mass coordination effort in case of emergencies. From ice storms, to derechos, to hurricanes, utilities that participate in mutual assistance agreements have access 24/7 support. Current Affairs sits down with Shelley Levoy, Manager, Distribution and Mutual Assistance to the past, present and future of the program.

Hi Shelley, thanks for joining us. Electricity Canada’s Ontario Mutual Assistance Group has grown over the last year! Talk to us about that growth.

Absolutely! The Ontario Mutual Assistance Group (OnMAG) has been steadily growing, and we now have 31 utility members, covering 91% of customers across Ontario. With this growth, we've organized into sub-regions to enhance efficiency and streamline restoration efforts.

Ontario is a province that spans 1,568 kilometers and includes three distinct climates. At some point in the future, we may be working to restore regions of Ontario affected by separate weather events. Ensuring we are well-practiced now to operate in regions that will serve us in actual situations in the future.

What is happening with the Canadian Mutual Assistance Group (CanMAG)?

In late 2023, we revitalized and updated the Canadian Mutual Assistance Agreement as a membership to enhance its effectiveness. Since then, we’ve actively encouraged all Canadian utilities to sign on. Our goal with the Agreement is to build a framework that will ensure our members experience a streamlined response during crises, eliminating key coordination challenges. Strengthening our national resilience regarding extensive restoration ensures faster, more organized support.

Right now, we're seeing momentum with our OnMAG members signing onto CanMAG, which broadens the pool of available resources for all our members. For example, if a utility from the East Coast needs help, they are not part of OnMAG, which is an Ontario program. But if the East Coast utility in our example has signed CanMAG and the Ontario utilities offering to send support have signed CanMAG, we're all connected and able to assist each other, no matter where the need arises!

There have been rumours about "TechMAG". Tell us about that.

Lately, it seems in all directions, there's been a shift in focus to cybersecurity— we know it's top of mind for our board and our members. We're working on a cybersecurity-focused mutual assistance agreement, similar to the Canada Mutual Assistance Agreement, specifically for cyber events. We're calling it the Technology Mutual Assistance Group, or TechMAG. Well, that's the working title. The idea is to create a roster of qualified experts who can assist utilities during a cybersecurity event or attack. We aim to launch in spring 2025 and are currently drafting the agreement and building the framework.

Looking ahead, we recognize that a utility could face a physical and cyber attack simultaneously, so getting TechMAG up and running is a top priority. Our future goals include hosting exercises to develop a framework for coordinating physical and cyber responses effectively, ensuring we're prepared for that dual-threat scenario.

What are upcoming developments in the mutual assistance space that you're looking forward to in the coming year and what is the most exciting?

As part of CanMAG, we're in the early stages of working with our U.S. partners along the Canada-U.S. border to improve cross-border mutual assistance efforts. Right now, each border crossing has different requirements, which can slow down emergency restoration efforts. We're mapping out how to standardize the process for moving crews and equipment across the border by land, air, and water so they can get to work as quickly as possible.

An exciting OnMAG development, we met at Hydro Ottawa this week. Part of our meeting focused on standardizing resources and best practices. For example, standardizing equipment names across companies would make it easier to share resources efficiently. We're also looking to streamline procedures for crews arriving on site, ensuring they have the correct information, permits, and local guidance to hit the ground running. It's all about improving communication and ensuring everyone is on the same page.

What do you like best about working in the mutual assistance community?

The people. This is a corny answer, for sure, but let me give you context. I have a long career in fundraising, and I have met my share of people who do good work. Everyone I have encountered in the mutual assistance space knows what they're talking about, and they are confident in what they're doing. There's a level of patience, understanding, and ease of explanation in everything that they do.

They focus on being efficient without compromising safety, with two top objectives: getting everyone home and logging how we can improve on what was done last time.

For more information on Electricity Canada’s Mutual Assistance Program, contact info@electricity.ca

Canada needs electricity regulations that work in the real world

The draft Clean Electricity Regulations (CERs) were released in August of 2023. Since then, Electricity Canada and its members have consistently engaged with the federal government on the proposed rules, the modelling behind them, and what the potential impacts might be for the electricity sector and broader economy.

In late August, Electricity Canada CEO Francis Bradley was interviewed by the Globe and Mail to discuss some of the chief concerns that industry has when it comes to the achievability of the proposed regulations in certain jurisdictions. We also took our concerns public and launched an online ad campaign to increase awareness about the potential reliability and affordability concerns associated with an unachievable final regulation. Current Affairs sat down with Electricity Canada’s Vice President of Government Relations Michael Powell to discuss the importance of getting these new regulations right.

Hi Mike, thanks for joining us. Why are the Clean Electricity Regulations important-- not just to the electricity sector, but Canadians generally?

The Clean Electricity Regulations will limit how much electricity can be generated using emitting sources in 2035 and beyond. Today, Canada’s electricity system is over 84% non-emitting, so we are starting from a good place. But the remaining 16% will be the most difficult to reduce, especially as we work to double or even triple the size of the grid by 2050.

These rules would have the greatest impact in specific provinces: Nova Scotia, New Brunswick, Ontario, Alberta and Saskatchewan. Emitting sources of generation continue to play a key role in providing baseload power in these, so it’s really important to get the rules right. It will be vital that the right flexibilities are included to ensure that reliability and affordability can be maintained beyond 2035.

The Clean Electricity Regulations are also important to get right because they will have an impact on our ability to successfully electrify the Canadian economy and reduce overall emissions. Although the electricity sector represents just 47 Mt of carbon emissions, the Canada Electricity Advisory Council highlighted that we have the potential to reduce 268 Mt of carbon emissions from other sectors by 2050. Doing so can only happen if we can keep electricity affordable and reliable.

What would you say are the biggest issues that need to be resolved when it comes to the CERs and the electricity sector?

We're worried that when the government sets these rules, they're going to choose a path that is too stringent. This would make it difficult, and in some cases impossible, for grid operators to keep the system reliable for Canadians.

Every province and territory in Canada is starting from a different place when it comes to decarbonization of the system. Some provinces will have a bigger lift simply because of the natural resources that they have available. Right now, we are concerned that if we don't see sufficient flexibility in the final regulations there is a potential for blackouts and brownouts in these jurisdictions.

The online ads Electricity Canada put out on August 23^rd say the CERs will lead to problems with reliability and affordability. How will this be the case?

First of all, it's important to remember that the regulations have not yet been finalized. The reason we're running a campaign is to ensure the Canadian public and federal decisionmakers are aware of the risks when it comes to not getting them right.

Getting them right means that independent system operators and utilities in all provinces can see a path towards meeting the regulations. They are the experts in building the system and providing electricity every day of the year. Their voice is crucial.

We're all working towards building a cleaner electricity grid. Significant work is underway across Canada on nuclear projects, refurbishing and adding hydro, and building more wind, solar and batteries. This is exciting and important to our energy future. However, we need to be mindful about what is feasible in these tight timelines while ensuring all Canadians have power. We're experiencing the fastest rate of growth in electricity demand in a couple of generations. These are big problems, but they require thoughtfulness and balance.

If we are going to get there, we really need to make sure we have tools that are available, dispatchable, flexible and affordable. While we build a future and invest in the scaling clean technologies, we need to understand that getting there will take time. On the road to that future, we will need to ensure that the lights can stay on for every Canadian household.

The way the regulations are drafted right now, in the jurisdictions that have the greatest challenge, they can’t yet guarantee that will happen.

What need to be the next steps to make the CERs workable. Where do we go from here?

The Government of Canada is going to be making a decision in the next couple of months on what the final regulations will look like. Our sector in the meantime will continue to be clean and getting cleaner.

What we hope to see is a final regulation that is sufficiently flexible so that a system operator in any of the jurisdictions can see a path with which reliability and affordability aren’t a serious concern. It has to work using the tools and the technologies that we have today, and it has to do so in a way that is sensible for customers. We will continue to engage and provide our perspective to this end. This is too important to get wrong.

The Canadian Customer

The electricity sector in Canada is constantly innovating, and customers expect more from their local utility because of it. Electricity Canada’s new report “A 360-degree customer view : an industry looking to empower the customer” describes how to use available data to build on customer interactions and build trust. Current Affairs sits down with Dan Gent, Director of Transmission and Reliability lead to discuss.

Hi Dan, thanks for joining us. What is a 360-customer view and why is it so important for the electricity sector to adopt?

The 360-degree customer view is a tool with the idea that it's going to give you a look at the customer and focus on them, from the first time they sign up with the utility, to the end. With the complete picture of the customer, it gives the utility information about their initial service or connection, the amount of outages they experience, or the invoices they receive or the programs they sign up for like energy efficiency programs.

It also gives you a good understanding of where they sit in the market. Are they educated or are they high income? Do what size of house do they have? Are they a business owner, do they have multiple locations?

All of that also comes into play. With this information, utilities can break the customer down into different segments.

Tell us a little bit about who was involved in creating this report.

In June of last year, Electricity Canada’s Customer Council and Technology Committee got together at ENMAX in Calgary. They discussed, presented and had open conversations regarding what is customer solutions of the future going to be and the 360-degree customer view was really the focus of that conversation and how to go about building it.

After copious amounts of note taking, the information was given to the Data Strategy Group to put together a model and framework that made the tool come to life.

What challenges do utilities face when trying to connect with their customers and what kind of technology can help with this?

Utilities have a lot of data already! We have all the technical stuff like usage data, voltage levels, how often they lose power etc. Those are customer touch points, but we need to take a deeper look into those things to understand the sentiment of the customer. And quite often, the sentiment data is hiding behind all of the technical insights. By breaking things down and analyzing things from a marketing perspective, you can really create an accurate profile of who is using your services and what they need.

If you think about it, someone who already owns an electric vehicle will most likely be interested in electrification in other ways around their home, so that customer is someone you can target with programming or products that can help with that. Artificial intelligence is going to be a big tool in how to organize all that data and automate that decision making.

In this industry, our idea of the customer really has changed over the years. Why do you think that Canadian’s are so connected to where their electricity comes from and how that process works?

There's a change of mindset in the customer base for sure in the electricity sector. More people are concerned of where their electricity is coming from and want to make sure their footprint is not that big. More and more people are becoming educated on that aspect because of the changing climate.

The other aspect that's also moving along is digitization or digital technology. People want customized and personalized solutions like they have in other industries, and if the utility can the helpful energy advisor to their customers and provide tools that are personalized to them, that's great.

Where do you think customer interactions will go in the future?

I think it's going to be much more personalized. It's going to be more digitized, and I think that the utility is going to get more empathetic. By the time you pick up the phone and call the call centre, the person on the line will probably already know who you are and what you need and will have a better understanding of your situation so they can help you.

Customer interactions will go beyond what’s in the invoice. With more information available to them, they want energy efficiency solutions and behind-the-meter solutions, and integrated solutions with the latest digital capabilities.

What is the most important take away from the report?

Well, there are a lot of recommendations in the report that utilities can act on. But I think what goes beyond and what's really important is that, with the 360-degree customer view the company must become even more customer centric. That customer service and customer focused culture needs to be enhanced even further. And that is probably the most important aspect of the of the whole report.

The 360-Customer View report is available here . The accompanying blog Changing customer needs and how to find them discusses the key recommendations of maintaining a positive customer relationship in the changing world.

Electricity Canada releases new report “Always On”

It is no secret that the Canadian electricity grid is going through big changes, faster than ever before. Electricity Canada’s new publication “Electricity in Canada: Always On” discusses the new age definition of ‘reliability’ and how it will affect the energy transition from electrification to aging infrastructure. Joe McKinnon, Manager, Economic Regulations & Standards at Electricity Canada sits down with Current Affairs to explain.

Why is reliability so important?

Reliability is one part of “energy trilemma” as we call it. As we pursue a decarbonized and expanded grid to meet our net zero goals, we must consider how to achieve reliability, affordability, and sustainability - the trilemma.

In recent years, sustainability has become the larger buzzword of the three for policy impacting the electricity sector. Even so, electricity providers have not forgotten the importance of reliability. It's a pressing issue that is consistently integrated into modelling and investment planning for service providers. However there are diverging priorities between utilities, regulators, and policymakers. That, and the rapidly shifting energy landscape, has led to the relegation of reliability considerations. Ultimately, everyone needs to understand that fundamental priority for electricity providers is ensuring that the lights are “Always on”!

Tell us about who was involved to create this report and why?

Tom Chapmen and Dr. Kathleen Spees from the Brattle group developed the report though primary research gathered from our membership. The substance of the report was developed though the industry expertise of Electricity Canada’s network. Thanks to the practical knowledge of our membership, the authors at the Brattle group were able to bring theoretical concepts to a practical level.

What do utilities need regulators to do most when it comes to making the grid ready for net zero?

Net zero is a huge challenge. Policy is driving this massive shift in our economy which is changing the energy landscape dramatically. This requires major investment and innovation from the electricity sector, but change can't be facilitated at the rate required through outdated and rigid regulatory frameworks.

Regulators across the country need to provide utilities with greater flexibility when it comes to rate submissions and rate design, as well as hold a progressive understanding of what should be considered reasonable investment for cost recovery through the rate base. While the principles behind rate design in Canada aren't outdated, interpretations of these principles can be.

Clean energy investments often require incremental reliability investment beyond typical replacement capacity cost. So, we need flexible application periods for utilities to manage evolving trends in supply and demand. And we need forward-looking, multi-year revenue plans with profit and loss sharing mechanisms that would provide utilities with greater ability to manage the considerable risks associated with investing to meet uncertain future needs.

In addition to flexibility, we need clarity. Regulators need to provide clear guidance for those utilities seeking to invest in grid modernization and develop distributed system operator capability.

What were the big recommendations made in "Always On"?

Always On makes the case for the importance for prioritizing reliability as the central consideration of planning our energy future.

Some of the big takeaways include:

· That we need greater coordination between utilities, policy makers, and regulators to set a strategic direction that optimizes the utility business model. Enhanced industry engagement for policy planning and implementation is required. There needs to be opportunities to engage in greater regional planning. Early and active industry engagement in policy development not only orients policy and planning goals towards achievable targets, it reduces inefficient regulatory burden.

· We need to meet energy needs across all hours – and not just peak times. In order to determine full resource adequacy needs, new assessments will be required to ensure that all potential grid disturbances are captured.

· Regulators need to develop more flexible financing mechanisms that allow utilities to seek approval for and recover prudently incurred net zero transition costs.

· Regulators and utilities need to proactively mitigate extreme weather risk by facilitating grid hardening investment. This needs to be based on long-term future projections, rather than historical events.

· Targeted funding is needed to address utility capital constraints, facilitate investments in infrastructure, and support the most impacted provincial economies. The current financing frameworks, which focuses on incenting efficiency and maximizing asset utilization, have recently had an impact on utilities access to capital for long term reliability investments. Targeted public funded can bridge this gap in capital.

Where should we start?

Regulators and policy makers need to provide more opportunities for regulatory innovation, experimentation, and flexibility. This can be done by establishing regulatory working groups and innovation sandboxes that look to coordinate policy preferences, regulation, and needs to utilities.

Across all jurisdictions regulators and policymakers should establish rate frameworks that acknowledge that reliability investments are “used and useful” allowing easier cost recovery for utilities.

Target funding from governments needs to be available to utilities given the capital constraints for these net zero investments. An expanded and decarbonized grid, pushed for by government policy, needs to be supported through ample government incentives.

Click here to read the report.

Introducing the Faces of the Industry

On Monday April 29^th, Electricity Canada welcomed the six winners of the inaugural Faces of the Industry award to a reception in downtown Ottawa. Chosen by an independent panel of judges these individuals were from all regions of Canada and represented every areas of the electricity industry. Electricity Canada’s Director of Communications Graeme Burk, sits down with Current Affairs to discuss where it all fits into National Electricity Month.

Hi Graeme, thank you for talking with us. Tell us how the Faces of the Industry award came about and how is it unlike than anything Electricity Canada has done before?

We have a lot of great awards that Electricity Canada gives out every year for sustainability, reliability, and for occupational health and safety to name a few. When we were looking at those awards we noted that they're all corporate: they're mostly about things our members have accomplished as an organization. We saw a gap there because the electricity sector as a whole is full of really talented people. And we wanted to celebrate that.

We work in an industry that encompasses everything from engineers to people who work with customers, to people who innovate in science and biology, to people who do communications - all these things are a part of the work. We thought an award that celebrated individual achievement in the electricity sector would be a really good thing.

Who are this year’s Faces of the Industry and what makes them special?

We have such a huge breadth of people!

We have Executive Vice President of Innovation – Gary Smith from Fortis Inc. with 40 years experience in the business.

We have Kim Griffin, the Manager of Sustainability in Communications at Maritime Electric who was the face and voice during Hurricane Fiona.

Lara Ludwig, who works in Stakeholder Relations at SaskPower - her and her team helped engaged about 60,000 people in terms of helping SaskPower determine what to do next in terms of the energy transition.

Keyra Hawley is our self-proclaimed bird nerd, and she works at ATCO as an Environmental Specialist, making sure that power lines are safe for wildlife and in turn, for people.

Then there is Rick Putman, who is something of a legend. He has worked for Hydro One for many years and is one of the architects behind mutual assistance in Canada.

We also have a network engineer from Hydro Quebec, Barmak Khosravi, who innovated the telecommunications part of the electricity sector.

There were over 50 applications, is this what you were expecting?

I think at the time we did this, we were hoping that maybe we get 12 applications and so that at least there was a one in two chance of winning! We were really overwhelmed by how many applications we got. I think it speaks to how enthusiastic people in the electricity sector were about the idea of an award that celebrated an individual achievement.

The independent judging panel for this had such a hard job because all 50 of those applications were so great. We have so much to celebrate in the sector and it was just amazing to read all the stories. After carefully thinking through each application, our panel made it down to six.

What inspires you the most about the winners of the Faces of the Industry award?

I'm inspired most by their attitude. All of them are very focused on the best possible experience for customers, and for the electricity sector to do the best possible work. Basically, it's the innovation and it's the commitment to making the electricity sector the best it can possibly be for everyone.

What can Canadians expect to see from this year’s National Electricity Month campaign?

Well, this is going to be the biggest social media campaign Electricity Canada has done in quite some time. We’ll be posting content every day during National Electricity Month on Instagram, LinkedIn, Facebook and YouTube. We were very grateful to every single recipient of the award for taking the time to come to Ottawa and meeting with us and they gave really great and thoughtful interviews. We’re also putting together a short documentary about it!

National Electricity Month is something I think we should really celebrate. And what Faces of the Industry has done is reminded us that the electricity sector in Canada is made up of people. Our hashtag is “We Are Electricity” and we want people to understand that people are behind everything when it comes to electricity. You don't just turn on a light switch— electricity happens through the genius and through the talent of the people you see here in our Faces of the Industry.

For more on National Electricity Month and Faces of the Industry, stay tuned to Electricity Canada’s Instagram and LinkedIn.

Electricity Canada comments on the 2024 Federal Budget

On April 16^th, the 2024 Federal Budget, Fairness for every generation was released. There were important announcements for the electricity sector, including the Indigenous Loan Guarantee program, Investment Tax Credits and improving the process for getting approvals. Current Affairs sits down with Manager of Government Relations Will Greene to discuss what this means for our clean energy future.

Hi Will, thanks for joining us. What were the big wins in budget 2024 for the electricity sector?
There were a couple notable inclusions for the sector in Budget 2024. First of all, we saw the announcement of $5 billion towards an Indigenous Loan Guarantee for energy and natural resource projects. This will be instrumental in the development of Indigenous-built and Indigenous-owned electricity infrastructure and will ensure that Indigenous Communities are an equity partner in the transition to a net zero economy.

Second, we saw a suite of measures to help clarify and reduce timelines for major projects, in particular establishing a new Federal Permitting Coordinator, which Electricity Canada identified as a critical element of its Build Things Faster report. The Budget included timelines and targets to ensure the federal government is being transparent and accountable when it comes to major projects that will be crucial to achieve net zero.

Third, we got further details regarding the Investment Tax Credits, with the most notable being an update on the conditionality for the Clean Electricity ITC. None of the ITCs have begun to benefit projects yet, so it’ll be important for the government to be surgical in their creation and consultation. The primary goal of each ITC should be to get money out to projects that need it now to realize the affordability and clean energy benefits.

How does this year's budget compare to last year?

Although this budget wasn’t as big for us as a sector as last year, there were some important developments for the electricity sector. Budget 2023 was a foundational step for the federal government’s electricity agenda. We saw $1 out of every $8 dollars earmarked to clean energy. While we continue to wait for much of that funding to make its way through legislation, regulation and eventually deployment, we continue to push hard for clarity, conditionality, and speed that favours building major projects.

That’s not to discount Budget 2024, as every federal budget can’t always mean tens of billions for the sector- although I certainly wish it would! Instead, this year’s focus was more geared towards regulatory streamlining for within government departments and fine-tuning details on many of the things that have been previously announced.

That’s not to discount Budget 2024, as every federal budget can’t always mean tens of billions for the sector- although I certainly wish it would! Instead, this year’s focus was more geared towards regulatory streamlining for within government departments and fine-tuning details on many of the things that have been previously announced.

What announcement could make the biggest impact to the electricity sector?

I think both the Indigenous Loan Guarantee and streamlining measures both have the potential to be game changers. It will come down to how quickly these things can be implemented to make sure that projects are providing benefits as soon as possible. We have a lot of timelines to meet.

What are you most concerned about when looking at this year's Federal Budget?

One of the major concerns we have is the absence of an exemption for regulated utilities when it comes to Interest Deductibility Limits. To put a very complicated tax measure in simple terms, without an exemption for regulated utilities (in Bill C-59), tens of millions of extra dollars will be passed on to electricity customers depending on where you live – without any direct benefit to those customers or their electricity services. Budget 2024 did grant an exemption on the same public benefit rationale the electricity sector has been promoting… but it was given for the development of purpose-built rental housing.

We think that the decision not to exempt regulated utilities is at odds with the goals of this government. Instead of addressing affordability challenges and making it easier to build good projects, these measures will add costs to Canadians and make building clean electricity infrastructure even harder.

Overall, does this this budget get us further along when it comes to getting to net zero?

I’m going to give the cop-out answer here and say that we’ll have to wait and see. Does Budget 2024 say the right things in terms of economic reconciliation, advancing ITCs and making it easier to build things faster? Yes. However, we won’t know if they will advance net zero until they are implemented, and we see shovels in the ground.

At the same time, measures like the Interest Deductibility Limits for regulated utilities almost certainly will make net zero harder, as it will lead to less money in the pockets of Canadians and less money at the disposal of utilities to build major projects.

Growth in Mutual Assistance

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Canada needs electricity regulations that work in the real world

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The Canadian Customer

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Electricity Canada comments on the 2024 Federal Budget

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Growth in Mutual Assistance

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Canada needs electricity regulations that work in the real world

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Electricity Canada releases new report “Always On”

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