Thank you.

Good afternoon, Mr. Chair and committee members. Ms. Milutinovic and I appreciate the opportunity to appear before you today.

I'd like to open by familiarizing the committee with the National Energy Board's mandate with respect to electricity. The production of electrical energy in Canada and much of the infrastructure and trade in electrical energy are constitutionally within the powers of provincial governments, so the NEB's mandate on electricity is quite limited. The mandate we do have comprises two broad categories: an adjudicative function and an energy information function. We believe both are somewhat relevant to your study today.

There are two separate aspects to the adjudicative function. The first relates to power lines. A company seeking to construct or operate an international power line, or IPL, can apply to the NEB for either a permit or a certificate. The board always seeks public input for an IPL application. Under the permit application, the board hears concerns from stakeholders, but after they hear concerns, they are required to issue the permit under the NEB Act, although the board can attach conditions to the permit. Once permitted, an IPL is subject to regulation by the province it is in, if an energy regulator exists in that province. Should the board receive comments that somewhat concern it as a result of the permit application, the board can recommend that the IPL be designated for the certificate process by the Governor in Council.

A company can also apply directly for a certificate. Under the certificate process, the board can hold a hearing and approve or deny the IPL application based on the evidence gathered. The ultimate approval under the certificates process is subject to the Governor in Council.

The NEB has no automatic authority for the regulation of power lines that cross provincial or territorial boundaries. That said, the Governor in Council has the authority to designate an interprovincial line to be under NEB regulatory authority. Currently, the NEB does not regulate any electricity transmission lines that solely go between provinces.

The second aspect of our adjudicative process deals with trade. Exporting electricity to the United States requires a permit or a licence from the National Energy Board. The current default process is the permit process, which begins with a public comment period under which the board will consider factors such as the effects of the export on adjacent provinces and fair market access for Canadians. If the board has concerns, it can recommend that the application go to a licence process, which requires a hearing. If the permit process prevails, though, the NEB will issue a permit. Under the licence process, the board can approve or deny the application after the hearing. Approvals are subject to Governor in Council approval as well.

Since the permit process was introduced in the early 1990s, all export authorizations have been under permits rather than licences. With both permits and licences, the board has the authority to attach terms and conditions. For example, the board requires companies to submit monthly reports on the volumes traded. The NEB Act allows electricity export permits to endure for up to 30 years.

The NEB has no mandate for the regulation of electricity imports, nor for interprovincial electricity trade.

Beyond our adjudicative function, the NEB contributes to the national energy conversation by providing neutral, independent, and fact-based information to Canadians. The NEB's energy information program includes the collection, analysis, and publication of information on energy markets, including electricity. We regularly publish energy information reports, ranging from very brief targeted energy market snapshots to more comprehensive larger reports. These products increase the transparency of the Canadian energy market, support energy literacy, and inform Canadian decision-makers.

We will soon be releasing the latest edition in our energy futures series, entitled “Canada's Energy Future 2017: Energy Supply and Demand Projections to 2040”, or simply, “Energy Futures 2017”. Our energy futures reports are the only publicly available long-term Canadian energy outlooks that cover every energy commodity in all provinces and territories. An interesting fact is that next week's report comes 50 years after we published our first such report in 1967.

“Energy Futures 2017” will look at how possible energy futures might unfold for Canadians over the long term by considering three cases: a reference case, which is based on the current economic outlook; a moderate view of energy prices; and the climate and energy policies that were announced at the time the analysis was done.

A higher carbon price case considers the impact of higher carbon pricing than in the reference case, and our technology case considers the impact of greater adoption of select emerging technologies that impact energy production and consumption.

Technologies include less expensive solar and wind electricity generation, grid-scale battery storage, electric vehicles in the passenger transportation sector, steam-solvent technology for the oil sands sector, electrified space and water heating in the residential and commercial sectors, and carbon capture and storage technology for coal-fired electricity generation.

I'd like to point out a few key statistics with respect to renewables in Canada. Canada has a wealth of electrical generation capacity. Fifty-five per cent of Canada's capacity and 58% of our generation are from hydro. Non-hydro renewables account for 12% of capacity and 7% of generation, and coal, nuclear, natural gas, and oil round out the rest.

We've provided some slides to the clerk on non-hydro renewable capacity and generation projections, as well as Canadian end-use demand according to the three scenarios in our upcoming energy futures report. That's a bit of a spoiler for the energy futures report, as interesting as it might be.

Electricity generation varies greatly across provinces. For example, hydro accounts for 95% of electrical generation in Quebec, Manitoba, Newfoundland and Labrador, and Yukon, and 87% in British Columbia. Conversely, virtually none of Nunavut's power is hydro-generated. Instead, Nunavut relies heavily on diesel generation. Nuclear power generation, at 15%, is Canada's second-largest source of generation. However, it is concentrated in only two provinces, Ontario and New Brunswick.

A notable trend over the past decade has been the increase in the generation capacity for renewables such as wind, solar, and biomass. Non-hydro renewable energy has increased its national share by almost five times since 2005. In fact, according to our projections, renewables' share of generation capacity is expected to grow even more in the future, with wind capacity more than doubling and solar capacity more than tripling by 2040 in our latest reference case scenario.

In conclusion, the board stands ready to assess any electricity applications that are filed with it, and we will also continue to provide fact-based energy information to inform the energy debate in Canada.

With that closing, I'll thank the committee again, and we're open for questions.

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