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More stability for electricity consumers

Proposed legislation would further reduce price volatility in the electricity system and support the province’s made-in-Alberta transition to a stable and reliable system that puts consumers first.

“We inherited a volatile electricity system that did not look out for consumers. The previous government created the Balancing Pool to deal with Power Purchase Arrangements but did not give it the tools it needed to properly manage the cost impact on consumers if companies said they were handing their PPAs back. We are correcting that and giving the Balancing Pool the tools it needs to limit cost impacts on consumers and enable greater predictability and stability.”

Margaret McCuaig-Boyd, Energy Minister 

Bill 34, the Electric Utilities Amendment Act, would allow the Balancing Pool to borrow money from the province to manage its funding obligations. This change, in conjunction with Ministerial Orders that allow the Balancing Pool to smooth price volatility over a longer period of time, would support electricity costs remaining low and stable.

Currently, the average electricity consumer receives a Balancing Pool credit of $1.95 on their monthly bill.

Without the changes proposed in Bill 34, the Balancing Pool would have to remove that credit and apply a charge of $8.40 per month (approximately $100 per year) starting Jan. 1, 2017, with similar charges applied until the end of 2020.

With the changes proposed in Bill 34 and with supporting regulations that give the Balancing Pool until 2030 to meet its net zero obligation, the charge would instead be 67 cents per month for the average consumer. That’s the equivalent of a
0.1 cent/KWh increase in electricity prices, and $7.73 less per month than if the government hadn’t acted. The amount will be reviewed annually and adjusted as necessary based on the wholesale price of electricity.

The changes – which allow the Balancing Pool to manage the cost of the power companies’ return of PPAs earlier this year – in conjunction with reaching a settlement with one of the PPA buyers and tentative settlements with two others, would protect consumers and provide price stability as the province transitions its electricity system.

“These changes are consistent with others we are making in the electricity system to protect Albertans from price spikes while ensuring the province has a stable, reliable system for the long term. Gone are the days when the average bill could – and did – swing by $30 in a single month. This government has taken a number of steps to ensure low prices and system stability. It has been a good week for electricity consumers, something that has not been said for a number of years.”

Margaret McCuaig-Boyd, Energy Minister 

By extending the operations of the Balancing Pool, providing a loan and setting the initial consumer charge, the province is ensuring that consumers do not see an immediate and disproportionate increase to power bills from the companies returning their power contracts. These changes complement the government’s work with the companies to settle the PPA disputes. The government will continue to work with the Balancing Pool to understand what steps the Balancing Pool could take to further reduce the cost impact on consumers.

Additionally, Robert Bhatia has been appointed to chair the Balancing Pool’s Board of Directors. The appointment is effective November 29, 2016.

Mr. Bhatia brings a wealth of knowledge and experience to the Balancing Pool, particularly in the areas of financial and fiscal management, strategic leadership, policy and legislation, governance, and operations. During his more than 30 years working for the Government of Alberta, Mr. Bhatia worked in government ministries responsible for finance and revenue, most notably in deputy minister roles.


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