Varcoe: Province targets energy market reform — expects decrease costs — however critics demand impartial probe

The query is how rapidly any aid will arrive for weary shoppers as numerous authorities research and evaluations are going down

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Alberta’s energy market is ”not working,” and the easiest way to assist shoppers and companies grappling with hovering payments is to reform the electrical energy marketplace for the brief and long run, says the province’s utilities minister.

Talking to a Calgary Chamber of Commerce luncheon on Tuesday, Affordability and Utilities Minister Nathan Neudorf mentioned the province is continuing with a collection of evaluations by numerous businesses into Alberta’s energy system, which ought to wrap up early subsequent yr.

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These embrace the contentious provincial pause on approving new renewable tasks and a examine into the broader construction of Alberta’s deregulated market.

Energy costs have soared up to now two years, even with an inflow of wind and solar energy tasks onto the grid, he mentioned throughout his handle.

“The market is just not working as meant,” Neudorf informed the group.

“We’re not simply capping (costs) and placing a Band-Support on it for a brief time period. We’re making key investments to permit for that stabilization.”

On Tuesday, the Alberta NDP referred to as for the province to carry an impartial investigation into excessive electrical energy charges.

It additionally blasted the UCP authorities for placing a moratorium on approving new renewable tasks, and in addition questioned the permitted observe in Alberta of permitting financial withholding by suppliers.

Information from the Alberta Electrical System Operator (AESO) reveals energy pool costs have averaged $139 per megawatt-hour (MWh) this yr, in contrast with $153 throughout the identical interval final yr.

However that’s up sharply from a mean of about $102 per MWh seen in 2021 and fewer than $50 in the course of the first yr of the pandemic in 2020.

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Residential and enterprise shoppers have been feeling the pinch of their month-to-month payments this yr.

“From a enterprise standpoint, that is completely one thing we’re centered on and really involved about,” mentioned chamber CEO Deborah Yedlin.

Nathan Neudorf at the Calgary Chamber of Commerce
The Calgary Chamber of Commerce hosted the Honourable Nathan Neudorf, Minister of Affordability and Utilities in Calgary on Tuesday, December 12, 2023. Darren Makowichuk/Postmedia

The regulated fee choice — also called the default fee — for electrical energy spiked to a report 31.9 cents per kilowatt-hour (kWh) in Calgary in August. It has dropped to 19.36 cents for December.

Because the AESO is market reforms, “what our market wants is both higher regulation or extra competitors,” NDP MLA Nagwan Al-Guneid informed reporters.

“We’d like an impartial investigation into energy costs. We have to get a full understanding of what’s driving costs. Most significantly, we want options that may assist Albertans.”

The query is how rapidly any aid will arrive for weary shoppers as numerous authorities research and evaluations are going down.

Within the throne speech in October, the UCP authorities vowed to overtake the electrical energy system because it undergoes vital adjustments, such because the speedy progress of renewables, the event of recent applied sciences and the push to decarbonize.

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Ottawa is looking for provincial energy grids to be net-zero by 2035, whereas the Smith authorities is demanding a 2050 timeline.

A evaluate is now underway on the way forward for the regulated fee choice, one other examine is being completed by the Market Surveillance Administrator (MSA) — the province’s electrical energy market watchdog — and AESO’s course of can also be transferring ahead.

“We’re trying on the sustainability of the market construction,” AESO chief government Michael Legislation mentioned Tuesday, noting suggestions might be given to the federal government in February.

“Then, there’ll clearly be an ongoing evaluation, as soon as they decide the place their coverage path goes. There’s a technique of design and implementation that may take quite a few years to implement.”

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For the renewable sector, which has attracted billions of {dollars} of recent funding up to now decade, the time for solutions is sooner, not later.

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Alberta noticed 1,391 megawatts of put in renewable capability added throughout the province final yr, representing greater than three-quarters of all additions throughout the nation.

The pause on mission approval shocked many within the sector and it’s slated to run till Feb. 29. Based on knowledge from the Canadian Renewable Vitality Affiliation, development of beforehand accredited developments with a mixed 1,240 megawatts of capability remains to be underway.

The Alberta Utilities Fee is inspecting a number of points round proposed tasks being accredited, together with using farmland, the impact on “viewscapes” and the potential of obligatory reclamation safety necessities for brand spanking new developments.

“What must occur is we want the pause to raise as quickly as potential,” Evan Wilson of the Canadian Renewable Vitality Affiliation mentioned in an interview.

“We’d like coverage readability on the best way that we’re transferring ahead on all the regulatory points which are occurring.”

Power transmission lines in eastern Calgary
Energy transmission traces are proven on the jap fringe of Calgary. Jim Wells/Postmedia

Neudorf insisted the pause on renewables will “come off, it doesn’t matter what” by the tip February. The federal government will then put ahead a complete path ahead for market reform, as early as the start of March.

And with extra thermal era being constructed and coming onto the market subsequent yr, energy costs are anticipated to return down, he mentioned.

“We’re additionally key directives to handle transmission, distribution, retail and administration prices,” Neudorf informed reporters after the speech.

“I’m very assured we is not going to solely have the ability to stabilize it, however convey it all the way down to historic costs of lower than 10 cents a kilowatt-hour, in addition to the all-in value to the ratepayer being at a way more inexpensive degree.”

Chris Varcoe is a Calgary Herald columnist.

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