Alberta operates a system of electricity generation and distribution that is unique in Canada. Rather than being owned by the government, the electricity system is owned and operated by a mix of investor-owned and municipally owned companies. Also, the wholesale and retail markets are open to competition, while its transmission and distribution wires businesses are regulated.
Increased demand in Alberta’s electricity market has resulted in over 7,300 megawatts (MW) of new installed electricity generating capacity since 1998. Albertan industry has expressed interest in investing in another 13,000 MW of new power development in coming years. According to the Independent Power Producers Society of Alberta, Alberta’s net generation capacity has “increased by 40 per cent, while wholesale power prices have increased by 10 per cent.” The demand for electricity has grown at an average of 3.5% from 2000-2008, which is twice the Canadian and U.S. growth over that period of time.
Residents and businesses in Alberta have a wide variety of suppliers from which to choose. Companies such as TransAlta, Capital Power, ATCO, TransCanada, ENMAX, Balancing Pool, AltaGas and Oil & Gas Sector are all on-hand to provide their customers with the power they require to run their homes, offices and factories.
Given the large choice of suppliers, customers are in an advantageous position when it comes to deciding on the provider that best suits their needs. There are two main types of electricity consumer in Alberta, those who consume less than 25000 gigajoules of natural gas or 250000 kilowatt-hours of electricity per year and those that consume more. The smaller consumers typically cover households, farms, small businesses, office buildings, restaurants and smaller commercial properties. At the larger end of the scale are industrial and commercial properties such as ConocoPhillips Canada, Encana or Matrix Solutions.
To secure the power they require to service their customers, energy retailers purchase electricity through a combination of long-term contracts with generation companies and short-term purchases from the power pool. The electricity is then sold onto consumers. To ensure that market rates remain fair the Alberta system operator oversees the design and use of the transmission system to ensure fair market rates and non-discriminatory practices.
From a regulatory perspective, the Alberta Utilities Commission monitors and approves the costs for transmission facility owners to provide their services. They also approve the construction, connection and operation of all new transmission facilities planned for Alberta, in addition to system interconnection and the construction of new electric substations.
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