Making Sense of Energy

Energy Market Update – January 2013

Alberta

Albertans will not be forced into fixed-rate electricity contracts, and government will take steps to control costs on major new transmission lines now under construction, Energy Minister Ken Hughes said Tuesday. Hughes also predicted that residential power bills would go up “very modestly” in the next few months as utility companies begin to recover administration and other non-energy costs that were frozen for the past 11 months while the Retail Market Review Committee produced its report. (Source: Edmonton Journal)

Members of the Peace Country Rural Electrification Association (REA) have voted 78 per cent in favour of selling their electric distribution system to ATCO Electric. The sale vote is the result of an ATCO Electric purchase proposal requested by the Peace Country REA Board of Directors and membership. The Peace Country REA is an amalgamation of 10 REAs in northwest Alberta, making it the third largest REA in the province. Members of the Peace Country REA will receive $20,742 for each electric site they own. (Source: ATCO Electric)

Electricity Prices – Alberta

  • The Alberta power pool price averaged 5.879 cents per kWh in January 2013. This price is 0.117 cents higher than last month’s average of 5.762 cents per kWh. The pool price has averaged 6.215 cents per kWh over the last 12 months.
  • As of February 11, 2013, the forward market was predicting electricity prices for the calendar years of 2013, 2014, 2015, 2016 and 2017. These prices are 5.7, 5.0, 4.825, 5.1, and 5.425 cents per kWh respectively.

Gas Prices for Alberta

  • Direct Energy’s gas rate for January was $2.815 per GJ in the North and $2.917 per GJ in the South. The February rate has been set at $3.129 per GJ in the North and $3.253 per GJ in the South. Alberta gas prices have averaged $2.476/GJ over the last 12 months.

    As of February 11, 2013, the forward market was predicting gas prices for the calendar years of 2013, 2014, 2015, 2016 and 2017. These prices are 3.04, 3.52, 3.78, 3.95, and 4.20 cents per GJ respectively.

British Columbia

B.C. New Democrat energy critic John Horgan is warning B.C. residents to brace for what he’s calling rate shock under an NDP government when it comes to their electricity bills. Horgan said recent Hydro documents filed as part of the Crown corporation’s environmental plans for its proposed Site C hydroelectric dam reveal financial losses, power surpluses and low prices, all signalling higher Hydro rates for consumers. (Source: MSN)

Energy Minister Rich Coleman says smart meters won’t be forced into homes over the next few months but he denied reports the province has reversed its policy and will let objectors opt out of having the wireless devices. “We’re going back to talk to our customers,” he said Thursday. “We’ll not force any customer to take a meter.” Coleman said he believes most smart meter opponents will ultimately agree to take them after they talk to BC Hydro reps. But exactly what will happen to holdouts who resist to the end is unclear. (Source: SurreyLeader)

Ontario

Ontario’s Independent Electricity System Operator (IESO) released its annual statistics on electricity supply, demand and price, which reflect the changes taking place in the provincial electricity system in the way electricity is produced and consumed. Nuclear units remained the cornerstone of Ontario’s supply mix. Gas and hydroelectric units continued to provide important flexibility by ramping production up and down in response to changes in demand and wind output. Wind generation has grown to become a mainstream resource. In 2012, nuclear output showed a modest increase to 85.6 terawatt-hours (TWh), up from 85.3 TWh the year before, representing 56.4 per cent of total generation. Contributions from renewable resources continued to grow. Wind production increased from 3.9 TWh to 4.6 TWh. On a percentage basis, it represented 3.0 per cent of total output – up from 2.6 per cent in 2011 – and exceeded the output of Ontario’s coal plants. Output from hydroelectric and natural gas facilities was essentially unchanged. (Source: IESO Release)

In September 2010, Japan triggered a World Trade Organization challenge against the Ontario’s Feed-In Tariff (FIT) program’s local content rules. Consultations began between Japan and Canada with the United States and the EU subsequently joining in. On October 6, 2011, after the consultations failed to resolve the matter, the WTO Dispute Settlement Body composed a dispute resolution panel to resolve the dispute. The FIT program was established in 2009 under the Green Energy and Economy Act. The FIT program enables power producers to sell renewable electricity to the Ontario Power Authority under 20-year power purchase agreements. Japan and the EU complained that Ontario’s local content rules breach the General Agreement on Tariffs and Trade 1994 (“GATT”) by treating imported products less favorably than domestic products. They also argued that the premium electricity prices paid under the FIT program constituted a subsidy that is contingent on use of domestic rather than imported goods, and is therefore prohibited. Unless Canada successfully appeals the WTO Panel’s ruling, or refuses to comply with it, the WTO decision will put an end to a significant effort by Ontario’s government to foster a local renewable energy technology and manufacturing industry and to promote the generation of renewable energy in Ontario. (Source: Gowlings)

Electricity Prices for Ontario

  • The weighted-average Hourly Ontario Energy Price (HOEP) was 3.159 cents per kWh in January 2013. This price is 0.608 cents lower than last month’s 2.551 cents per kWh. The weighted-average price has averaged 2.437 cents per kWh over the last 12 months.
  • The Global Adjustment rate for February was set at 5.728 cents per kWh. This rate was 3.77 cents in January. The Global Adjustment is an additional charge paid by non-regulated customers. It has averaged 4.971 cents over the last 12 months. (Source: IESO)

Saskatchewan

SaskPower, an electric utility, has begun construction of the I1K transmission power line from Island Falls to Key Lake. This phase of construction will reportedly take place from the Lindsay Lake switching station to Key Lake. As announced previously, Valard Construction Ltd. (Valard) was awarded the current construction contract for the line. The construction period for this phase of the project is late January 2013 to June 2014, the company said. Valard will be applying to the Ministry of Environment for all required permits for construction. The onsite activity will be monitored by independent consultants as well as SaskPower’s Environment Department to ensure that compliance with procedures and permits is maintained at all times during the construction phase, the company added. (Source: Equities)