Again, if the wires business is privatized, it may be appropriate to have the PX and ISO as a government-owned entity. We received very little input on the question of the PX - whether it would operate on a pool basis or by matching bilateral arrangements. It is, therefore, an area requiring further study. All participants in our process recognized their responsibility for stranded costs, if they should arise. Accordingly, such costs should be borne through the tax system, or as a user cost through wires tariffs, or, for users leaving the system, through an exit fee.
User fees tend to be regressive and to temporarily distort energy choice because of the added cost.
Income-based taxes tend to be progressive and do not distort energy choices. If the Select Committee and the Government of New Brunswick consider the exit fee principle to be appropriate, the structure should be designed to ensure that no party is able to gain a financial advantage by leaving the system before all stranded costs are paid for. We can hardly overemphasize the importance many of the representations made before the task force attached to environmental issues. While a competitive market may address demand management issues through creative pricing options, the Select Committee should explore ways to promote demand management more aggressively. It is probably not wise to rely exclusively on the participants in the electricity system to promote demand side management.