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Electricity policy of Alberta
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Electricity policy of Alberta
The electricity policy of Alberta, enacted through several agencies, is to create an electricity sector with a competitive market that attracts investors, while providing consumers with reliable and affordable electricity, as well as reducing harmful pollution to protect the environment and the health of Albertans, according to their 2022 website.
The underlying framework for the regulation of Alberta's electric industry is the Electric Utilities Act. The Act began Alberta's deregulated electricity market in 1996, where the province began to restructure its electricity market away from traditional cost-of-service regulation to a market-based system. The Act established arms-length agencies that oversee the province's electricity system—the Alberta Electric System Operator (AESO), the Balancing Pool, the Alberta Utilities Commission (AUC), Utilities Consumer Advocate (UCA), and the Market Surveillance Administrator (MSA).
Coal used to account for 80% of all electricity generated in Alberta. By the end of 2019, with coal representing 36% of the generation mix and natural gas accounting for 54%, 89% of Alberta's electricity in Alberta was produced from fossil fuels. Eleven per cent is generated with renewables, including wind turbines, hydroelectric, geothermal, and biomass.
From 2000 until 2021, the average wholesale pool price on-peak times was approximately CA$70/MWh and CA$70/MWh during off peak times. On August 12, 2021 the average wholesale daily pool price was CA$142/MWh representing the highest price in 20 years, according to AESO data.
The price of electricity had dropped in 2015 to below 4 cents/KWh for the first time since 2003, during the economic recession when oil prices, and therefore commodity prices, had decreased. The last time electricity rates were this low, was in 2003. In 2017 another historic low was reached, 2.88 cents/kWh. By 2018 prices began to rise to the prices experienced before the 2014 economic downturn. Since the regulated rate option (RRO) which placed a price cap of 6.8 cents/kWh on electricity was scrapped by the UCP government in their fall 2019 budget, electricity rates and bills have spiked considerably. By January 2022, electricity rates and bills reached their highest price ever—more than 16 cents/kWh in Edmonton and Calgary, which did not include fees for distribution and transmission.
On January 22, 2021, EDC Associates reported twenty years of success in retail competition in Alberta's electricity sector. On-peak pool prices averaged $70/MWh over the 20-year period and off-peak prices averaged $31 per megawatt-hour (MWh). The Alberta Electric System Operator (AESO) administers the Power Pool, which is the only market for all electricity sales and purchases in the province. The highest price in the Power Pool in the two decades from 2000 through 2020, was $90/MWh.
In August 2021, based on AESO data, wholesale power prices in the province increased sharply to over twice the average 2020 Alberta Power Pool price. From January to August 2021 the average pool price was $103.51/MWh; in August it was $142/MWh representing the highest annual price of electricity in twenty years.
On March 7, 2022 Premier Kenney announced an electricity rebate of $150. NDP energy critic, Kathleen Ganley, said that this was not sufficient and called on the UCP government to consider capping electricity rates, implementing a "rebate program or a reverse rate rider". Ganley said the government should amend the 2022 budget to "provide real relief". The UCP Minister of Natural Gas and Electricity responded that rate caps, which had been used previously did not increase future capacity and only provided short-term relief. They said that they were not fiscally responsible as future generations would pay a high cost for their implementation.
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Electricity policy of Alberta
The electricity policy of Alberta, enacted through several agencies, is to create an electricity sector with a competitive market that attracts investors, while providing consumers with reliable and affordable electricity, as well as reducing harmful pollution to protect the environment and the health of Albertans, according to their 2022 website.
The underlying framework for the regulation of Alberta's electric industry is the Electric Utilities Act. The Act began Alberta's deregulated electricity market in 1996, where the province began to restructure its electricity market away from traditional cost-of-service regulation to a market-based system. The Act established arms-length agencies that oversee the province's electricity system—the Alberta Electric System Operator (AESO), the Balancing Pool, the Alberta Utilities Commission (AUC), Utilities Consumer Advocate (UCA), and the Market Surveillance Administrator (MSA).
Coal used to account for 80% of all electricity generated in Alberta. By the end of 2019, with coal representing 36% of the generation mix and natural gas accounting for 54%, 89% of Alberta's electricity in Alberta was produced from fossil fuels. Eleven per cent is generated with renewables, including wind turbines, hydroelectric, geothermal, and biomass.
From 2000 until 2021, the average wholesale pool price on-peak times was approximately CA$70/MWh and CA$70/MWh during off peak times. On August 12, 2021 the average wholesale daily pool price was CA$142/MWh representing the highest price in 20 years, according to AESO data.
The price of electricity had dropped in 2015 to below 4 cents/KWh for the first time since 2003, during the economic recession when oil prices, and therefore commodity prices, had decreased. The last time electricity rates were this low, was in 2003. In 2017 another historic low was reached, 2.88 cents/kWh. By 2018 prices began to rise to the prices experienced before the 2014 economic downturn. Since the regulated rate option (RRO) which placed a price cap of 6.8 cents/kWh on electricity was scrapped by the UCP government in their fall 2019 budget, electricity rates and bills have spiked considerably. By January 2022, electricity rates and bills reached their highest price ever—more than 16 cents/kWh in Edmonton and Calgary, which did not include fees for distribution and transmission.
On January 22, 2021, EDC Associates reported twenty years of success in retail competition in Alberta's electricity sector. On-peak pool prices averaged $70/MWh over the 20-year period and off-peak prices averaged $31 per megawatt-hour (MWh). The Alberta Electric System Operator (AESO) administers the Power Pool, which is the only market for all electricity sales and purchases in the province. The highest price in the Power Pool in the two decades from 2000 through 2020, was $90/MWh.
In August 2021, based on AESO data, wholesale power prices in the province increased sharply to over twice the average 2020 Alberta Power Pool price. From January to August 2021 the average pool price was $103.51/MWh; in August it was $142/MWh representing the highest annual price of electricity in twenty years.
On March 7, 2022 Premier Kenney announced an electricity rebate of $150. NDP energy critic, Kathleen Ganley, said that this was not sufficient and called on the UCP government to consider capping electricity rates, implementing a "rebate program or a reverse rate rider". Ganley said the government should amend the 2022 budget to "provide real relief". The UCP Minister of Natural Gas and Electricity responded that rate caps, which had been used previously did not increase future capacity and only provided short-term relief. They said that they were not fiscally responsible as future generations would pay a high cost for their implementation.
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