Electric Statues Amendment Act Introduced by Provincial Government
The provincial government has proposed the Electricity Statues (Capacity Market Termination) Amendment Act to enable the return to an energy-only market. In July a review on the transition to a capacity market was conducted. After reviewing stakeholder input the government has made the decision to maintain an energy only market. If passed, Bill 18 will amend the Alberta Utilities Commission Act, amend various regulations that extended electricity policies to the capacity market and repeal Capacity Market Regulation.
Energy-only markets are based on generators being paid for the electricity they produce based solely on the fluctuating wholesale price of electricity and companies decide on the type of generation they produce and where their facilities are located. Capacity markets are based on generators being paid through competitively auctioned contracts which pay their fixed capital costs and revenue from the spot market. This system operates with an appointed entity which plans, approves and administers the contracts to buy the capacity needed to meet expected demand.