Weathering the storm

Abstract

The power markets of Canada, the United States and Mexico differ greatly in the extent of their electrification and their methods of regulation. Upon looking closer, however, the developer would be struck by remarkable similarities in the three countries` current market conditions. All three countries are undergoing fundamental structural changes in the way electric power investments ar planned, built, and operated. Energy users are demanding greater flexibility in choosing suppliers and services, and traditional utilities are resisting forces that threaten their market positions. Economic and regulatory uncertainties have delayed new power investments, and independent power developers are finding a high level of competition for available project opportunities. In Canada, slow economic growth has resulted in minimal demands for new power. Similarly, utilities in the US have adopted a wait and see posture as regulators and legislators work to restructure the country`s power industry. In Mexico, the devaluation of the peso in late December continues to have a chilling effect on development in the country. This article examines prospects for independent power in North American markets during this time of transition.