Alberta Government Announces New Rules for Electricity Generators

Alberta’s government is updating its electricity market rules with new temporary measures it says will help lower consumers’ utility bills. The new measures are aimed at the practice of “economic withholding,” a strategy regularly used by power generators in Alberta’s unique-to-Canada free-market electricity system. Under Alberta’s competitive market design, electricity suppliers submit offers into the energy market known as the power pool every hour. The Alberta Electric System Operator then dispatches the suppliers’ electricity, starting with the lowest-priced offers and moving higher until the province’s power needs for that hour are met. Economic withholding is when power producers deliberately hold back some of their supply, offering it at a higher price. It’s a gamble that can pay off if the operator needs that power, since the producer makes more money, but backfires if the province’s power needs are met before it gets to the higher-priced offer....