5 things to know about the Senate's territorial energy report

A Senate standing committee's 64-page report on the state of Northern energy systemsreleased this week contains little that's new for energy observers or consumers in the territories.That all three territories struggle with energy consumption, generation and costs, even in the presence of numerous energy resources, is no surprise.

Still, the report calls onthe federal governmentto provide more financial support for energy projects in the territories, on both the demand and supply sides.

"In planning for the future, territorial governments must balance the need to supply affordable and reliable electricity to residents, businesses and industry while attempting to reduce the consumption of carbon-intensive fuels," the report stated.

"In recent years, advances in renewable energy technologies, energy efficiency, other fuel options such as natural gas and the possibility of connecting to the North American energy grids, are creating new opportunities. That being said, the committee heard that territorial governments are financially limited in advancing many large energy projects."

The report makes five recommendations to the federal government:

1. Improve energy efficiency

The report notes that Northerners use energy at a per capita rate double the national average, largely thanks to the cold, dark winters. Reducing that use is one of the easiest ways to cut both costsand greenhouse gas emissions, the committee says, calling such practices "low-hanging fruit." While all three territories have made efficiency gains, for example, through retrofitting government buildings or residual heating projects, senators believe Ottawa needs to develop a strategy to support these projects in the North.

Anne Middler, an energy analyst with the Yukon Conservation Society, agrees conservation should be the first priority. But she says the territories must take the lead.

"It should be done locally because that is wherea lot of the expertise will lie, knowing what needs to be done to reduceour energy demand and reduce our waste of energy," she said.

2. Increase funding for communities

With the move towardrenewable energy, local heat recovery systems, and the fact that many Northern towns rely on standalone diesel generators, funding for small scale energy projects is increasingly important.

Natural Resources Canada's ecoENERGY program has a specific fund for green energy projects in Aboriginal and Northern communities, but the last round of funding closed in February, with projects to be announced this summer. What's more, the Senate report says that only 18 per cent of this $18-million fund, or $3.2 million,went to communities in the three territories.

It's also worth noting that Yukon, for example, offers funding for micro power generation projects through its Energy Solutions Centre. Yukon is also expected to release a policy for independent power production this year. Still,the standing committee says ecoENERGY "should be renewed, expanded and a larger share should be assigned to the territories."

3. Streamline federal involvement

As is typical in the territories, the federal government's involvement with energy issues is spread across a dizzying number of departments and agencies no fewer than 10, according to the report, which calls on the federal government to roll these responsibilities into a "federal energy resource and knowledge hub for the territories."

The committee noted thatenergy policy and programs,community support, research, mapping renewable energy potential, energy literacy and awareness, building codes and other regulatory regimes, infrastructure funding and environmental initiatives are all scattered across different government agencies.

A federal clearing house that includes the territorial governments should also compile a list of best practices from communities across the Canadian North, as well as the wider circumpolar world, the report said.

4. Spring for new infrastructure

Once upon a time, the federal government ran nearly all power generation in the territories via the old Northern Canada Power Commission. Over the years, NCPC assets and responsibilities were downloaded to the territorial governments, which formed their own Crown utilities. But federal funding for capital projects basically evaporated, and the territorial governments,especially Nunavut,generally lacked the money to expand power systems.

Senators expressed their amazement that 17 of Nunavut's 25 diesel power plants are past their original design lives. Most were built in the 1970s. Newer equipment, even if it still burns diesel, is far more efficient. Ottawa has helped pay for some upgrades in Nunavut, but the committee says it hasn't been enough.

"These aging facilities increase the risk of power outages posing a risk to public safety and resulting in costly repairs," the report said.

"The committee holds the view that replacing existing generator systems with newer systems will allow more effective and efficient operation of the plant facilities avoiding costly and disruptive outages."

And it says Ottawa needs to pony up the cash to help territories pay for these projects.

5. Support energy megaprojects

In a similar vein, the report urges Ottawa to help pay for some of the larger-scale projects needed to reduce energy costs and carbon emissions. In recent years, all three territories have studied projects that would connect them to the southern power grid, and all three have backed off because long-distance transmission lines aretoo expensive.

Meanwhile, Nunavut, which is solely-reliant on diesel, has pursued hydroelectricity for years, but simply cannot afford the hundreds of millions of dollars it would cost to build hydro dams to supply Iqaluit and, possibly, the Kivalliq region.

The committee recommends the federal government offer loan guarantees and partial funding to help the territories build these projects because they're of "regional and national significance" and will help develop Northern industry, while reducing greenhouse gas emissions.

Officials with Natural Resources Canada told senators they're open to considering loan guarantees.

But a lot of these projects have been on the drawing board for years. Without some source of funding, it is there they'll remain.