Alberta makes chances to electricity pool as it moves away from coal

EDMONTON – The Alberta government is making more changes to how it handles electricity as it transitions out of coal-fired power.

The province is giving the entity that brokers the electricity system — known as the balancing pool — the ability to borrow money from the province to manage its funding obligations so those costs don’t get passed on to consumers.

The changes are in Bill 34, the Electric Utilities Amendment Act, which was introduced Tuesday.

The balancing pool was set up when Alberta deregulated electricity two decades ago, but Energy Minister Marg McCuaig-Boyd says that was a flawed approach.

She says power companies have been returning money-losing power contracts to the balancing pool, with any outstanding costs to passed on to ratepayers.

“We inherited a volatile electricity system that did not look out for consumers,” said McCuaig-Boyd.

“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.”

As it stands, the average electricity consumer gets a credit from the balancing pool each month of $1.95.

Without the proposed changes, the province says that $1.95 credit would become a monthly fee of $8.40, adding up to about $100 a year starting in 2017.

But opposition Progressive Conservative energy critic Rick Fraser said the province is once again using taxpayers’ money to backstop ill-conceived experiments that have contributed to this year’s $10.8-billion deficit.

“Allowing government to borrow unlimited funds from general revenue to keep the balancing pool afloat is a gross misuse of hard-earned taxpayer dollars,” said Fraser.

“We are facing electricity price volatility and a depleted balancing pool because of aggressive and ideological NDP policies.”

The province has been embroiled in a lawsuit with the power providers over the returned contracts.

The government says the power companies returned the contracts by exploiting an illegal loophole created under murky circumstances by the former Progressive Conservative government, with taxpayers left on the hook for a potential $2 billion in power costs.

In recent days, the province has struck out-of-court settlements with most of those power providers.

In the last week, Premier Rachel Notley’s government has announced fundamental changes to the power system as it moves toward electricity powered by natural gas and through renewables like wind and solar.

The current deregulated system will move to a capacity system in the coming years, to ensure there are no supply problems and price spikes.

The government is also capping power bills at 6.8 cents a kilowatt hour in the short term to shield ratepayers from steep cost increases.

Opposition members have said the government is moving too quickly to phase out coal without due consideration for the workers and communities affected.

Also Tuesday, the province announced it had hired Robert Bhatia, a former senior civil servant, to be the new chairman of the balancing pool’s board of directors.