Review finds electricity market protections in place
A review of Alberta’s market power mitigation framework has concluded the existing policy effectively protects against excessive market control.
In fall 2019, government launched a review to examine concerns from consumer representatives about certain parties gaining too much control of Alberta’s electricity market following the expiry of Power Purchase Arrangements (PPAs). At the same time, electricity suppliers raised concerns about unnecessary market control mitigation strategies.
The review – which included stakeholder feedback and advice submitted by the Alberta Electric System Operator (AESO) – concluded that the province’s existing policy and legislative framework is effective and will continue to restrict the abuse of electricity market control in the future.
The review also highlighted opportunities to provide clarity and certainty to the role of the Market Surveillance Administrator (MSA) and its oversight of the electricity market. To bring a renewed focus to this role, government has appointed Derek Olmstead as CEO of the MSA for an interim period of nine months.
In this role, Olmstead will focus on the important work of market surveillance and enforcement, providing greater clarity and certainty for Alberta’s competitive electricity market participants and investors. The appointment is effective immediately.
“Our government promised to ensure a fair and competitive electricity market for Alberta consumers and job creators. Establishing and maintaining clear roles for our agencies increases investor confidence and market stability in our electricity system. I would like to thank Gordon Kaiser, outgoing CEO, for his service.” Dale Nally, Associate Minister of Natural Gas and Electricity
“Alberta’s power market has worked to meet our province’s demand, to provide consumers with choice, and to provide the downward pressure of competition on power prices. We welcome Dr. Olmstead to this role and we welcome the government’s commitment to ensure efficient and complementary agency oversight of the market.” Evan Bahry, Independent Power Producers Society of Alberta
Government will continue to review Alberta’s electricity agencies, including the MSA, to ensure they are accountable, fulfil their intended purpose, and operate in the best interest of Albertans.
Alberta’s electricity markets operate under the principles of fair, efficient, and open competition. The Fair, Efficient and Open Competition Regulation restricts any one electricity supplier from holding market control greater than 30 per cent of the market’s total generating capacity.
Alberta has four electricity agencies:
Alberta Utilities Commission
Alberta Electric System Operator
Market Surveillance Administrator
The MSA is an independent enforcement agency that exists under the Alberta Utilities Commission Act. It is responsible for protecting and promoting the fair, efficient, and openly competitive operation of Alberta’s wholesale electricity market and retail markets for natural gas and electricity.
Derek Olmstead has significant experience within the electricity sector, including as director of enforcement at the MSA. His appointment is for a period of nine months – concluding on Jan. 21, 2021 – while recruitment takes place.
Provincial Press Release April 23, 2020 @ 2:44 PM