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Established to support Alberta's fair, efficient and openly competitive electricity market, the Balancing Pool’s primary role was managing fixed-price deals with electricity producers, known as Power Purchase Arrangements (PPAs).
Changes to the Specified Gas Emitters Regulation made under the previous government led to money-losing PPAs being returned to the Balancing Pool. That debt created no new system enhancements, and is being paid off through a surcharge on Albertans’ monthly utility bills – a rate rider expected to continue until 2030.
According to the financial review, $1.34 billion was lost between May 1, 2015 and April 1, 2019, largely due to losses from the sale of electricity and related services under the returned PPAs, payments made to settle disputes and towards terminated PPAs, and expenses for financing operations. The total does not include costs associated with ongoing disputes.
“The former government’s ideological agenda directly led to increased costs for Alberta ratepayers and failed to address the long-term issues facing Alberta’s electricity system. We will be tabling new legislation to modernize Alberta’s electricity system, taking steps to start dissolving the Balancing Pool and reviewing Alberta’s distribution and transmission policies to maximize efficiency. Most importantly, we are creating long-term solutions by supporting a competitive market that provides choice to consumers and strengthens the electricity system rather than the short-sighted approach taken by the previous government.”
“Every dollar paid for by Alberta ratepayers needs to be treated with respect and restraint. Alberta’s electricity market is attracting private, low-carbon investments at record pace – and these dollars could have been used to enhance the system, a major missed opportunity. Alberta Enterprise Group is pleased to see this fiscal accountability by winding down this agency, thereby protecting utility affordability and Alberta’s overall competitiveness.”
The independent financial review into the Balancing Pool is based on public information and is now available on alberta.ca.
Additional information on the government’s approach to begin the process of winding down the Balancing Pool in a coordinated and cost-effective way will be shared soon.
- The Balancing Pool was established in 1999 to help manage the transition to competition in Alberta’s electric industry.
- The company is a non-profit statutory corporation with a board of directors appointed by the Minister of Energy.
- The agency’s obligations and responsibilities are governed by the Electric Utilities Act and the Balancing Pool Regulation.
- The Government of Alberta has been evaluating options for the future of the Balancing Pool over the past year, prompted by the expiry of all the remaining PPAs on Dec. 31, 2020.