IERN International Energy Regulation Network

The generation component is competitive and partially privatised.

In 2004, Three-quarters of Alberta’s energy requirements are met through coal-fired generation.

Alberta is a thermal-based generation region that has interconnections with British Columbia and Saskatchewan. Less energy flows between Alberta and Saskatchewan due to the limited transmission transfer capability.

Although it has no direct interconnection with the U.S., Alberta generally is a net importer of power from the Pacific Northwest (U.S.) through British Columbia. However, in 2001, Alberta exported significant power to the Pacific Northwest (U.S.) and California to capture price differentials resulting from the California crisis.

TransCanada Corporation Q&As (TRP), EPCOR Utilities Inc (EPCOR), ENMAX corporation (EMAX) wholly owned subsidiary of The City of Calgary and TransAlta Corporation (TransAlta) were the main exporters and importers in 2004.

A competitive wholesale market exists in Alberta, which is facilitated by the Alberta Electric System Operator (AESO) and monitored by the Market Surveillance Administrator (MSA). The Balancing Pool manages the financial accounts arising from the transition to a competitive generation market on behalf of electricity consumers including any obligations and responsibilities associated with Power Purchase Arrangements (PPAs).

There are numerous market participants. Some of the original entities such as EPCOR, ENMAX, TransAlta and ATCO continue to operate in many, but not all, of the restructured segments (e.g., neither TransAlta nor ATCO participate in the residential retail market) and new entities such as TransCanada Energy wholly owned by TRP, Direct Energy (Centrica Group), Alta Link and FortisAB.

The Alberta transmission system is owned and operated by the AESO under RTPA regime. AESO is a not-for-profit entity, independent of any industry affiliations and owns no transmission or market assets.

Main distribution companies and suppliers are EPCOR, ENMAX, TransCanada Energy, Direct Energy, Alta Link and FortisA.

Distribution and transmission prices are regulated by the Alberta Utilities Commission (AUB).

Retail for industrial and large commercial consumers is competitive.

In 2003, Alberta end-use consumption was dominated by industrial consumption, which continues to grow as a result of activities in the oil and gas sectors.

There are two main components to utility rates: the charges for the energy commodity itself and the charges relating to the delivery of the energy to a customer's home. In the restructured utility industry different companies may now provide these components. While the delivery component remains fully regulated, the energy charges are now determined in a competitive marketplace.

Eligible customers may choose to continue receiving their energy on a regulated basis, or they may choose to obtain their energy from a competitive retailer. Tariffs of eligible consumers are regulated by AUB.

The Province of Alberta, is the dominant gas production area in Canada (it produces the 80 per cent of its natural gas).

In the 2006-07 fiscal year, the drilling of conventional natural gas wells also declined by about 10 per cent, from 14,610 in 2005-06 to 13,140 in 2006-07. Alberta’s 2006 marketable natural gas production of 5.08 Tcf, which includes CBM, increased slightly from 5.02 Tcf in calendar year 2005.

Disposition of Alberta’s natural gas production in 2005 was approximately: 49 per cent to the United States; 26 per cent within Alberta; 24 per cent to the rest of Canada. However the natural production is going to decrease at 15% below)

Alberta is an established gas market hub, which can support and benefit from northern gas development. Six market centers provide gas producers and shippers with trading opportunities and interhub transportation between the TransCanada (Nova) system and the rest of Canada. Several of these centers are also situated such that they can provide their customers with broad access to U.S. market centers as well.

The Energy Resources Conservation Board (ERCB) regulates exploration, production, processing and transmission of natural gas within the province.

The ERCB regulates 159,500 operating natural gas and oil wells and 392,000 km of pipelines.

The sector is partially privatized.

Approx. 392,000 km of pipelines are regulated by the ERCB.

Main regulated distribution and providing companies are: AltaGas Utilities Inc (AltaGas) that serves approximately 64,000 residential, rural and commercial customers at regulated rate natural gas services, and Direct Energy Regulated Services (DERS), a subsidiary of entrica plc, that provides regulated natural gas and electricity service to Alberta residential and small commercial customers.

Distribution rates for investor-owned utilities (DERS and AltaGas) are approved by the AUB. The AUB does not set rates for municipally owned gas utilities, rural gas co-ops, or competitive natural gas retailers.

The Board does not set rates for municipally owned gas utilities, rural gas co-ops, or competitive natural gas retailers.

The sector is partially privatised.

Retail natural gas has been open to choice since 1996.

Main supply companies are AltaGas and DERS. There are also municipally-owned gas utilities and rural cooperatives.

The market is partially opened. Eligible consumers may choose to be supplied at regulated prices or at market prices by gas retailers.

Gas supply costs are dealt with as a separate component but are also approved by the AUC (only for investor-owned utilities AltaGas and DERS).

• Renewable development. The provincial government’s voluntary renewable supply requirement is to have an additional 3.5 percent of energy being generated by renewable and alternative energy by 2008, that includes wind, biomass and small hydro.
• Generation project under development. Thermal-based generation will grow as a result of the recently commissioned coal-fired 450 MW Genesee 3 generating unit located west of Edmonton.
• Transmission lines under construction.
  • By 2009, Alberta is expected to alleviate transmission constraints such that the ability to export power will increase to 700 MW for all times of the day.
  • the AESO was required to develop the 10-Year Transmission System Plan (2005-2014) (Transmission System Plan).
  • Two merchant transmission projects that would connect Alberta directly with U.S. markets are currently in the developmental phase. These are the Montana Alberta Transmission Line, a 300 MW AC line from Lethbridge to Great Falls, Montana, and the NorthernLights project, a 2 000 MW high voltage direct current (HVDC) line that would connect the oil sands to the PNW or Montana.
  • Stakeholders in the Alberta system are currently working with their counterparts from British Columbia and the western U.S. to determine the feasibility of enhancing the interconnected transmission grid.
  • A subgroup of the Northwest Power Pool Transmission Assessment Committee is presently evaluating numerous options and overall feasibility for increasing the transmission capacity from Northeast Alberta to California.