Making Sense of Energy

Energy Market Update – October 2013

Alberta

TransCanada Corp. is repairing a northeastern Alberta pipeline after a natural gas leak was detected on October 17, 2013. Around 2:50 a.m., TransCanada’s gas control centre detected a drop in pressure on a section of its north-central corridor natural gas pipeline, said company spokesman Shawn Howard. The section is part of the company’s Nova Gas Transmission Limited system, and occurred between the Wooden House and Buffalo compressor stations, located 138 km west of Fort McMurray. TransCanada shut down operations of the pipeline and said the area was being secured and isolated. Rebecca Taylor, a spokeswoman with the National Energy Board, said people were being sent Thursday to set up an emergency operations centre, ensure safety and stabilize the site. The cause and the amount leaked are not yet known. TransCanada and the National Energy Board are investigating. (Source: Edmonton Journal)

An organic waste processing facility that will be the first of its kind in Alberta when it opens in 2015 got a major funding boost. The City of Edmonton received $10 million from the not-for-profit Climate Change and Emissions Management Corporation for its Anaerobic Digestion Facility. The facility, which will be fully integrated into the Edmonton Waste Management Centre, will produce compost. The bio-gas produced in the process will generate renewable energy in the form of electricity and heat. It’s expected the project will reduce emissions by the equivalent of 198,570 tonnes of carbon dioxide over 10 years, similar to taking more than 39,700 cars off the road. The new facility will process 40,000 tonnes of organic waste per year, complementing the 125,000 tonnes of organic waste already processed annually at the Edmonton Composting Facility, which uses an aerobic process. The total cost of the facility is about $30 million. (Source: Edmonton Journal)

Capital Power Corp. had its eyes set on diversifying assets across North America, but Alberta’s open power marketplace and strong growth prospects have convinced the Edmonton-based company that this province is where it’s at. The company recently sold three merchant power plants in New England and made 220 staff reductions at U.S. and Canadian operations, paring its acquisition-seeking department. The money from this sale will go toward paying its share of the 800 megawatt Shepard Energy Centre in Calgary. Capital Power also is set to announce its own energy project, called Genesee 4 and Genesee 5. These two combined-cycle gas turbines would produce just over 1,000MW, and sit beside the company’s three other coal-fired power generators southeast of Wabamun Lake. “People in the industry here have a very positive outlook, and the significant thing is that we know the coal-fired plants will be retired on schedule — there will be 1,000MW retired by the end of this decade and another 3,000MW by the end of the next decade, plus AESO is talking about a four per cent increase in demand (each year), so there are lots of opportunities for new plants,” said Brian Vaasjo, President and CEO of Capital Power. (Source: Edmonton Journal)

Electricity Prices for Alberta

The Alberta power pool price averaged 6.456 cents per kWh in October 2013. This price is 4.742 cents lower than last month’s average of 11.198 cents per kWh. The pool price has averaged 8.531 cents per kWh over the last 12 months.

As of November 8, 2013, the forward market was predicting electricity prices for the calendar years of 2013, 2014, 2015, 2016 and 2017. These prices are 6.100, 5.675, 4.975, 5.125, and 5.375 cents per kWh respectively.

Gas Prices for Alberta

Direct Energy’s gas rate for October was $2.427 per GJ in the North and $2.397 per GJ in the South. The November rate has been set at $3.721 per GJ in the North and $3.685 per GJ in the South. Alberta gas prices have averaged $3.077/GJ over the last 12 months.

As of November 4, 2013, the forward market was predicting gas prices for the calendar years of 2013, 2014, 2015, 2016 and 2017. These prices are 3.20, 3.27, 3.38, 3.51, and 3.67 dollars per GJ respectively.

British Columbia

B.C. Hydro says even a small number of smart meter holdouts will cost it millions of dollars in extra work. Hydro expects to spend more than $7 million in capital and operating costs in the first year of a proposed opt-out program for customers who refuse to accept a wireless smart meter, company documents show. The calculations assume only 10,000 people choose to pay the monthly opt-out fees, out of more than 60,000 current holdouts. The new estimates were contained in the Crown power company’s application to the B.C. Utilities Commission last week. The commission will decide whether to approve monthly fees of between $20 and $35 for customers who want to keep their analog meters or turn off the wireless transmitter on new smart meter devices. The smart meters transmit home power usage data directly to B.C. Hydro, eliminating the need for meter readers. The cost of continuing manual meter readings every two months is estimated at $1.7 million, Hydro said in its submission. Costs increase as more customers refuse the meters, Hydro charts show. At 20,000 holdouts, capital and operating costs rise to more than $12 million, Hydro estimated. The government began installations in 2011 for its $1-billion smart meter program, and has so far installed almost 1.9 million devices across the province. (Source: Vancouver Sun)

Ontario

TransCanada Corp. has acquired two additional solar power facilities in Ontario as part of a multi-year agreement with Canadian Solar Solutions. TransCanada didn’t disclose the cost of the individual plants but Canadian Solar said they’re valued at more than $95 million. The power-generating operations — one in Brockville and the other in Ottawa — will sell their electricity to the provincial grid under 20-year agreements. The Brockville 2 plant has a capacity to generate 9.0 megawatts of electricity while the Burritts Rapids plant in Ottawa can generate 7.0 megawatts. (Source: Toronto Star)

Electricity Prices for Ontario

The weighted-average Hourly Ontario Energy Price (HOEP) was 2.243 cents per kWh in October 2013. This price is 0.017 cents higher than last month’s 2.226 cents per kWh. The weighted-average price has averaged 2.670 cents per kWh over the last 12 months.

The Global Adjustment rate for October was set at 5.810 cents per kWh. This rate was 8.720 cents in September. The Global Adjustment is an additional charge paid by non-regulated customers. It has averaged 5.557 cents over the last 12 months. (Source: IESO)

Saskatchewan

SaskPower has submitted a multi-year application to the Saskatchewan Rate Review Panel to fund ongoing major investments in the province’s electrical system and keep pace with the growing economy and population base. SaskPower is requesting the following system average rate increases in 2014: a 5.5 per cent rate increase in 2014; a 5.0 per cent increase in 2015; and a 5.0 per cent increase in 2016. Saskatchewan residential customers will, on average, see their bills increase by $5, $4 and $4 per month in 2014, 2015 and 2016 respectively, if the rate application is approved. To help offset the impact of rate increases, SaskPower will continue to help customers reduce their electrical use through efficiency and conservation programs, including the popular Refrigerator Recycling Program, and various lighting discounts and offers. (Source: SaskPower)

SaskPower and SaskEnergy are moving forward with province-wide installation of smart meters and upgraded gas modules this fall following a successful series of tests that began in June 2012. SaskPower is installing almost 500,000 smart meters, while SaskEnergy will make upgrades to nearly 370,000 natural gas meters. All work is scheduled for completion in 2015. Smart electricity meters use digital technology. SaskEnergy will upgrade its existing meters by installing a gas module on the current meter allowing it to send actual meter read information. The new meters will provide regular information on your electrical and natural gas consumption to SaskPower and SaskEnergy, using a secure two-way wireless communication system. This will enable both companies to use actual consumption information instead of generating estimates for billing purposes. (Source: SaskPower)