By: Nigel Bankes
Matters commented on: Market Surveillance Administrator, “Advice to support more effective competition in the electricity market: Interim action and an Enhanced Energy Market for Alberta”, (21 December 2023, released 11 March 2024) (MSA Advice); Supply Cushion Regulation, Alta Reg 42/2024, and Market Power Mitigation Regulation, Alta Reg 43/2024.
PDF Version: Some Quick Fixes for a Broken Market, And then the Possibility of an Enhanced Electricity Market for Alberta
On March 11, 2024 Nathan Neudorf, Alberta’s Minister of Affordability and Utilities, issued a press release announcing two temporary adjustments to Alberta’s electricity market rules to lessen opportunities for economic withholding and to create new rules for so-called “long lead time” generation assets with a view to further constrain opportunities for physical withholding. Long lead time generation assets are generators that require more than an hour to synchronize to the Alberta interconnected system (AIES). The non-availability of such assets during tight supply periods may effectively be a form of physical withholding of generation from the electricity market which serves to drive up the pool price. Economic withholding refers to the practice of bidding physically available generation into the pool “at prices sufficiently above marginal cost that the generator is not dispatched” also serving to drive up the pool price (MSA Advice at 4).