Alberta legislation would unplug NDP plan to change electricity power market

EDMONTON — Alberta has introduced legislation to formally pull the plug on a fundamental overhaul of the province’s electricity industry.

Energy Minister Sonya Savage says the province will stay with the current energy-only system, where producers are paid for the spot price of electricity, rather than go with the capacity system that was set to take effect in 2021.

“Alberta’s energy-only market has been operating for more than 20 years,” Savage said Thursday after introducing Bill 18. “It has a proven track record for providing a reliable supply of electricity at affordable prices.”

Bill 18 follows up an announcement made by Savage in the summer that the government, after consulting with consumer and industry stakeholders, would scrap the capacity system.

Savage said the feedback was so overwhelming the government made its decision before the consultation period was over.

“There was no need to drag it out,” said Savage.

“We wanted to get a signal to investors quickly that we were staying with the energy-only market.”

The province did not provide details on who Savage met with and what advice she received before scrapping the capacity market plan.

The former NDP government passed legislation late in 2016 to move to the capacity system to ensure no electricity shortages as Alberta moved to replace coal-fired electricity with more natural gas-fired power and renewables like wind and solar.

Capacity markets pay producers for spot prices but also to build up capacity, even if it isn’t needed.

Alberta’s existing energy-only market is composed of publicly traded companies that get paid in the spot market for the power they produce.

As part of the capacity plan, the NDP capped prices at 6.8 cents per kilowatt per hour during the transition to 2021 to shield people from any electricity bill price spikes.

That 6.8 cent cap remains in place and Savage wouldn’t say if the government will keep it.

NDP energy critic Irfan Sabir said the NDP government launched the capacity system to avoid widespread power outages and to deliver price stability for consumers.

He said that is why Savage avoided answering questions on the fate of the rate 6.8 cent cap.

“What we’ve seen before from the energy-only market is rolling blackouts and price spikes,” said Sabir.

“Consumers will suffer because of this decision.”

Alberta’s electricity market is an outlier. Unlike other provinces, Alberta does not have a Crown corporation to produce electricity but instead relies on the free-market.

The system was brought in by the former Progressive Conservative government of Ralph Klein in 1996 to create a competitive market for electricity generation and give investors incentive to build and operate generating plants.

Sabir said Savage’s decision is all about politics.

“This decision is completely ideologically driven and irresponsible,” he said.

Savage countered that far from putting the system at risk, the decision to stay with energy-only has already attracted new projects, including solar and wind generation.

“These investments were enabled because of the security and the investment stability of an energy-only market,” she said.

This report by The Canadian Press was originally published on Oct. 17, 2019.

Dean Bennett, The Canadian Press

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The Mustard Seed to launch new wellness centre in Red Deer

A new service is coming to Red Deer to help the city’s… Continue reading

Penhold firefighters handle ‘difficult’ blaze

Penhold firefighters battled a “difficult” blaze Friday afternoon. Fire crews were called… Continue reading

Clearwater County firefighter recruitment campaign deemed a success

A firefighter recruitment campaign is being considered a success by Clearwater County.… Continue reading

Dems say oust Trump or he’ll betray again; ‘He is who he is’

WASHINGTON — Closing out their case, House Democrats warned Friday in Donald… Continue reading

Senators may have to rein in activism in minority Parliament: new govt rep

OTTAWA — Independent senators may have to curb their enthusiasm for amending… Continue reading

Fashion Fridays: The basics you need for your body type

Kim XO, helps to keep you looking good on Fashion Fridays on the Black Press Media Network

Your community calendar

Jan. 22 Downtown House Senior Center (5414 43 St.) in Red Deer… Continue reading

St. John’s, N.L., lifts state of emergency eight days after massive storm

ST. JOHN’S, N.L. — The City of St. John’s has lifted a… Continue reading

Former cabinet minister Peter MacKay announces Tory leadership bid

STELLARTON, N.S. — Former federal cabinet minister Peter MacKay says he will… Continue reading

No winning ticket for Friday night’s $17 million Lotto Max jackpot

TORONTO — No winning ticket was sold for the $17 million jackpot… Continue reading

French doctor: Virus from China seems less serious than SARS

PARIS — The lead doctor treating two Paris hospital patients for the… Continue reading

Trump lawyer says Dems want to ‘overturn’ last election

WASHINGTON — President Donald Trump’s lawyers opened their impeachment trial defence Saturday… Continue reading

Democratic candidates pour into Iowa for last-minute push

DES MOINES, Iowa — Freed momentarily from the Senate’s impeachment trial, several… Continue reading

Europe’s bishops mark Auschwitz anniversary denouncing hate

WARSAW, Poland — Europe’s Catholic bishops are marking the 75th anniversary of… Continue reading

Most Read