The province is changes the way it makes and sells electricity. Almost 20 years after the system was turned over to private companies, the government will again have some control over the system.
It’s moving towards a capacity market, which means power producers will be paid to build up capacity so that there’s always enough in reserve. It’s a system that’s used in more than half of U.S. states.
Right now, it’s considered “energy only”, where generators are paid wholesale market prices for just the electricity they produce through a province-wide pool. Only Texas does the same in North America.
While there’s a risk Albertans may have to pay more for excess capacity, Energy Minister Marg McCuaig-Boyd says it will make sure prices stay affordable as the province moves away from coal-fired electricity. The switch is set to happen by 2021.
Premier Rachel Notley announced Tuesday the electricity prices will be capped at 6.8 cent per kilowatt-hour between 2017 and 2021 to “protect consumers from volatility during the transition.”