Key Facts

• Alberta's Power Market

  Click on chart below to see full size images.

  Restructuring intended to bring the benefits of competition to Alberta’s regulated electricity industry. It intended to spur new, efficient generation technologies, such as wind, and to have power producers compete to create a downward pressure on price. Restructuring also sought to introduce consumer choice in terms of long-term contracts or new products like green energy, neither of which existed in the regulated power industry.
• The price of power in Alberta would have risen whether the market restructured or not. Alberta’s economic growth required new plants to meet demand and the cost for new plants has kept rising. The competitive market was introduced to keep downward pressure on those costs.
• Since 2001, the open market has added 5400 MW of new supply.  (Compare this to SaskPower’s entire 3500 MW of supply).  That’s a 40% net increase in generation capacity.
• From 2001 to 2011wholesale market prices have increased by less than 10% .
• This new supply has met the fastest growing demand for power in Canada. The new supply is also the most efficient wind, gas and coal technology that is economic to build.
• Thanks to the advent of these new generation technologies, the emissions intensity of Alberta’s power production has fallen, which is a measure of the tonnes of carbon per megawatt hour of electricity produced.
• Alberta’s wholesale power prices are tied to natural gas prices, since Alberta does not have sufficient coal-fired generation to meet demand. Thanks to softening natural gas prices and a competitive wholesale market, wholesale power prices are now below the replacement cost of new generation .
• Residential prices (contracts & Regulated Rate Option) have fallen along with wholesale prices.
• Nearly $3 billion of residual value has been returned to Alberta consumer in the form of Balancing Pool credits that appear on monthly bills . This is roughly equivalent to providing every Alberta consumer with half a year worth of free electricity.
• The restructured industry does face some challenges, such attracting more residential competitors and adding more transmission to connect growing demand with future supply. The greatest challenge facing the industry, perhaps, is to create public confidence in, and understanding of, how the industry has restructured. This document is intended to provide some food for thought of how the market has evolved to date.