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UCP sticking with "stable" energy-only market

Last Updated Jul 25, 2019 at 7:17 am MDT

(PHOTO: Tom Ross - 660 NEWS)

UCP will stick with energy-only market, which pays generators only for the electricity they produce

Past government wanted to switch to capacity market in 2021, which would also pay for the ability to produce electricity

Energy Minister Sonya Savage says stakeholders told them they preferred to stay with energy-only market

The provincial government will be cancelling a switch in energy market payments that was introduced by the past NDP government.

Energy Minister Sonya Savage announced in Calgary that the United Conservatives will be sticking with an energy-only market, rather than adjusting to a capacity market.

An energy-only market pays producers for their real-time electricity generation, while the capacity market would have paid for a producer’s ability to produce electricity, in addition to their real-time generation.

Savage said they heard a large amount of feedback from stakeholders.

“We heard overwhelmingly from the generators and from the financial sector that there will be more investment in an energy-only market and not a capacity market. A capacity market is a new thing, it’s uncertain, investors don’t like that kind of uncertainty,” she said at the McDougall Centre on Wednesday.

Savage said the switch to a capacity market was an “experiment” by the NDP, and called it “ideological meddling.”

“We believe that system would have been more expensive to consumers. Both industrial consumers and residential consumers,” Savage added.

This decision will not result in any savings, as instead, Savage said it will prevent price increases.

Stakeholders told the province that they do not want any change, and would rather stick with the status quo system that was already in place as Savage said investors would be reluctant to invest in a capacity market.

Hearings were already underway around this market switch, and the Alberta Utilities Commission has been informed of the government’s decision.

Formal legislation will be put in place in the fall to make the decision official.