The electrical power industry of Manitoba : an economic analysis

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Gardiner, Alan George
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A study of the electrical power industry presents certain difficulties when undertaken from the point of view of conventional supply and demand analysis. The existence of high overhead costs, the tendency towards monopoly, and the special "administered" nature of electricity prices suggest that usual price analysis may be inappropriate. At the same time, a cursory examination of demand, the conditions of utility operation and the history of the industry in Manitoba indicate that the subject might best be analysed in terms of policy formulation. Industry policy and the manner in which policy objectives have been determined have therefore been made the focal point of investigation. Various characteristics and problems of the industry are related to issues and conditions associated with the early stages of hydroelectric development in the Province. Two generating and distributing utilities became established in Winnipeg, while a Provincial agency was given the commercially unattractive responsibility for extending service to the rural areas. This was the situation which existed until after the Second World War when a threatened power shortage induced the Manitoba Government to assume responsibility for the overall direction and development of the industry. In addition, the Depression of the 1930's and fear of postwar unemployment led to the major program of farm electrification which, while still continuing, is largely completed. However, the planned reorganization of the industry and transfer of City Hydro generating facilities to the Province which was necessary for the proper discharge of the Government's responsibilities, was halted by political controversy in Winnipeg, and the integration of the industry has proceeded on an ad hoc basis since that time...