APPrO outlines its vision
Speaking to the annual power producers’ banquet dinner hosted by APPrO on November 14, APPrO President David Butters laid out the principles and priorities that the organization has developed to move forward with development in the Ontario electricity sector.
“The preferred direction for evolution has been developed and reviewed with APPrO members and leaders in the power generation industry extensively for more than a year,” Butters said. “We believe we have been able to identify key principles that are widely accepted as necessary for healthy development of the sector, and we hope to build on these as we move forward in discussions with decision makers at all levels.”
The principles are summarized as follows:
• The achievement of an economically and environmentally sustainable electricity sector in Ontario that supports the business interests of electricity generators including a reasonable rate of return.
Goals for Evolution of the Electricity Sector:
• Encourage efficient and timely investment in Ontario’s power system to ensure adequacy and reliability.
• Produce the optimal electricity cost for Ontario consumers.
Principles for Evolution:
1. Decisions affecting the power sector should be made on an economically rational basis
2. Prices should reflect the true cost/value of production.
3. Robust competition among generators is a critical factor in achieving the optimal electricity cost for Ontario consumers.
4. Public and private sector entities should compete on a level playing field.
5. Markets with multiple sellers and buyers are the most effective way to harness the benefits of competition.
6. Stable and predictable public policy is critical to efficient investment and effective markets.
APPrO’s preferred direction for evolution:
1. The Electricity Conservation & Supply Task Force vision should continue to guide sector evolution.
2. An incremental approach, building on the current “hybrid market” should be employed to move toward an enhanced competitive market (i.e., one with multiple buyers and sellers, which operate on a level playing field, in the absence of undue market power).
3. Electricity trade should be organized primarily around long-term bilateral contracts, with the real time market used primarily for balancing.
4. Regardless, long-term commitments to backstop investment must continue to be in place to incent new supply.
Please note that the APPrO mission statement has been updated since the above vision was released. The current APPrO mission and objectives are visible at this location. (Please scroll to the bottom of the page to see the mission statement.)
For more information, please contact APPrO: www.appro.org