By: Nigel Bankes
PDF Version: Market power in the electricity sector prior to the implementation of a capacity market
Report commented on: Charles River Associates, Offer Behaviour Guidelines prior to the implementation of a capacity market, Report Prepared for the Market Surveillance Administrator, December 18, 2018
On September 27, 2018, Alberta’s Market Surveillance Administrator (MSA) provided notice that it was starting a process to determine if it needed to adopt guidelines for market participants in the electricity sector in Alberta during the period prior to the implementation of a capacity market. It will be recalled that the MSA had a set of Offer Behaviour Enforcement Guidelines (OBEG) that were in force until withdrawn by the MSA with the announced advent of a capacity market. For an earlier post referring to the development see here and for discussion of the transition to an energy plus capacity market see here.
To initiate this process the MSA retained Charles River Associates (CRA) to address three questions:
- Could there be a problem with offer behaviour that would need to be addressed during the transition period?
- If so, could the problem identified be addressed in whole, or in part, through MSA guidelines and what form could those guidelines take?
- If guidelines were made and market participants did not follow those guidelines what remedies should the MSA seek from the Alberta Utilities Commission (“Commission”) in an enforcement proceeding?
The MSA has now received that report and this post summarizes some of its key findings.