Clear Federal Policy Guidelines Needed for Future Canadian Power Imports

EMD-82-102: Published: Sep 20, 1982. Publicly Released: Sep 20, 1982.

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GAO reported on the necessity of a clear Federal policy for future Canadian power imports which, since the Middle East oil embargo of 1973-74, have increased sharply and will continue to increase because of proposed new interconnections. As a result, Canadian power purchases have lowered electricity prices, increased dependence on Canadian power, reduced domestic oil use, and affected the environment. The Department of Energy (DOE) is responsible for issuing Presidential permits to utilities which want to construct electrical transmission facilities at international borders. To date, permit applications have been approved on a case-by-case basis without clear guidelines.

GAO found that the appropriate role for Canadian power within the United States remains undetermined. DOE has no direction on how to fulfill its permitting responsibilities and thus has no specific set of criteria to conduct a permit review process. The utility industry is without a clear understanding of the Federal Government's position on importing power and what is required in the permitting process. GAO believes that lack of policy guidelines in the permit process may be part of the general problem of not having a formal electricity policy. DOE has not fulfilled its electricity planning responsibilities which could provide an information basis for making permitting decisions. An effort now underway to develop a national electricity policy could include the policy guidance needed for Canadian electricity.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The "energy" strategic issue on electricity supply and demand will continue to recognize the impact of Canadian power imports within the United States.

    Recommendation: The Secretary of Energy should work with the executive subcabinet working group on regulation, competition, and efficiency in the electric utility industry to establish clear Federal policy guidelines on the role for future Canadian electricity in the United States. This could be done as part of this group's total effort in looking at a national electricity policy and could contribute to a better understanding of the problems confronting utilities. This function is appropriate for DOE to undertake since it chairs this group. If the subcabinet group is unable to develop policy guidelines, the Secretary should obtain input from the utility industry and the Department of State to establish policy guidelines on its own. After development, the Secretary should inform utilities of DOE requirements. During the interim period before clear policy guidelines are developed, the Secretary should expedite the permitting process by working more closely with utilities during the technical and economic reviews to assure that utilities are aware of the purpose for submitting the data, how these data will be used, and the circumstances under which a permit could be issued with conditions.

    Agency Affected: Department of Energy


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