Making Sense of Energy

Energy Market Update – July 2014

albertaAlberta

TransAlta announced a $580-million plan to build, own and operate a new gas-fired power plant in Western Australia. This plant would generate 150-megawatt power to state-owned utility Horizon Power and subsidiary Fortescue Metals Group. All three companies have an agreement for 25 years and may be expanded to accommodate others in the future. This is not the first time TransAlta have invested in Australia, CEO Dawn Farrell stated in a release that they have been able to “invest close to a billion dollars in Australia in assets with stable long-term contracts”. Also, TransAlta also has 6 other plants totaling 425 megawatts of capacity. (Source: Edmonton Journal)

New energy price app makes it “as easy to read as a mood ring”, according to its founder, David Gray. Gray Energy Economics provides information on wholesale prices and overall electric system demand. Data is uploaded every 2 minutes and turns red if prices go up 25 cents / kWh and users get notified when price exceeds 75 cents / kWh. Furthermore, users can actually find a certain home item and the app can calculate annual costs to run that selected item. The company mission is to reduce electricity consumption by showing people the volatility of the electricity market. Which in the end drives the price of electricity down. The app is available on the app store for both apple and android. (Source: Edmonton Journal)

AltaLink has now been approved by the federal government for a foreign takeover by Berkshire Hathaway. The company will sell for $3.2 Billion. Along with the deal, Berkshire Hathaway Energy must not reduce the level of employment at AltaLink, its headquarters must stay in Alberta, and the majority of board of directors must be Canadians. Berkshire Hathaway also have to reinvest 100% of earning back into AltaLink for the next 5 years to support the company’s 3 year $2.7 billion investment in Alberta’s energy infrastructure.

At the same time, they have to invest at least $3 million of new funds over three years to support academic programs focused on energy-related topics. Lastly, Berkshire Hathaway Energy has had to commit to sharing best practices at no cost with AltaLink on safety, customer satisfaction, cyber security and supplier diversity and must provide opportunities for Alberta and other Canadian companies to supply products and services to its business. However, the deal has not been official just yet. Despite the billions of profit for the Quebec-based owner, the Alberta utilities Commission is still reviewing the deal to finalize the effect on Albertans. (Source: Calgary Herald)

Electricity Prices for Alberta

The Alberta power pool price averaged 4.218 cents per kWh in June 2014. This price is 1.187 cents lower than last month’s average of 5.405 cents per kWh. The pool price has averaged 5.909 cents per kWh over the last 12 months.

As of June 1, 2014, the forward market was predicting electricity prices for the calendar years of 2014, 2015, 2016, and 2017. These prices are 5.465, 4.725, 5.015, 5.390 cents per kWh respectively.

Gas Prices for Alberta

Direct Energy’s gas rate for June was $3.847 per GJ in the North and $2.730 per GJ in the South. The July rate has been set at $5.781 per GJ in the North and $5.138 per GJ in the South. Alberta gas prices have averaged $4.066 per GJ over the last 12 months.

As of June 3, 2014, the forward market was predicting gas prices for the calendar years of 2014, 2015, 2016, 2017 and 2018. These prices are 4.59, 4.25, 4.04, 4.13, and 4.44 cents per GJ respectively.

bcBritish Columbia

Smart meters have proven to be safe for homes and businesses in B.C. Currently, there are over 1.9 million meters and have been harmless for the past 3 years. In a study conducted by University Fraser Valley, there has been less residential fires since the implementation of the meters back in 2011 but there is no evidence of a smart meter causing any sort of fires. Earlier this month, Saskatchewan recalled almost all of their smart meters but in response, BC hydro’s smart meters are made from a different manufacturers therefore problem free. (Source: The Globe and Mail)

A report suggested by the David Suzuki Foundation shows B.C Hydro’s proposed Site C dam can threaten up to $8.6 billion in ecological values. The dam would flood 83 kilometres of land along the river. Faisal Moola, chief scientist with the environmental group says the 56,000 square kilometer watershed is full of ecological wealth. Policy makers usually ignore the worth of clean air and carbon stored in the forests but the fact is, they are worth well over $6.7 billion a year.

On the other hand, B.C Hydro stated that officials are undergoing a three-year federal-provincial environmental assessment process. They went on to say that the project will incur significant effects but the need for the project and benefits outweighs the negative aspects. The final decision on the proposed dam will see its fate later this year when the federal and provincial government is expected to release a final decision. (Source: MetroNews)

ontarioOntario

Electricity Prices for Ontario

The weighted-average Hourly Ontario Energy Price (HOEP) was 2.98 cents per kWh in June 2014. This price is cents 1.19 lower than last month’s 1.79 cents per kWh. The weighted-average price has averaged 3.193 cents per kWh over the last 12 months.

The Global Adjustment rate for May was set at 5.98 cents per kWh. This rate was 7.19 cents in May. The Global Adjustment is an additional charge paid by non-regulated customers. (Source: IESO)

saskSaskatchewan

Saskpower has been asked by the provincial government of Saskatchewan to remove all of their smart meters. According to Bill Boyd, minister responsible for the crown corporation, “anytime families are at risk here in Saskatchewan, actions have to be taken”.

Over the past 2 months, 8 fire incidents have occurred due to failure of the smart meters leading the government to order SaskPower to replace them with former style meters. The grand total number is close to 105,000 meters which can costs somewhere in the neighborhood of $15 million.

NDP deputy leader Trent Wotherspoon stated that it would “unacceptable” for rate payers money to go toward recouping the cost of the meters. He goes on to mention other instances in the United States that has added to the manufacturers bad track record. This situation is still under investigation by the government. (Source: CBC News)

manitobaManitoba

Manitoba Hydro has signed a 25-megawatt power sale with Saskatchewan. The sale is to start in November 2015 and last till May 2022. The deal is estimated to worth close to $100 million. This is the first 25-MW deal is the first of its kind between the 2 provinces according to president and CEO of Manitoba Hydro Scott Thomson. He goes to say that the demand for electricity is not just in United States but Canada as well. Since 2003, Manitoba Hyrdo export sales have totaled $5.6 billion and forecasts its total export revenue will be $16 billion over the next 20 years and $29 billion over the next 30 years. (Source: Winnipeg Free Press)