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By 2021, Alberta’s transition from an energy-only market model to a capacity market will be complete. It might seem like a long way off, but the process starts this year, and will bring tremendous changes to the energy market in Alberta. It’s never too early to take advantage of opportunities available today to help you prepare for the changes ahead.

Why is it changing?

Alberta’s moving to a capacity market model because our energy resources are changing. By 2030, the government has plans in place to eliminate coal energy and replace it with more natural gas and renewable sources like wind and solar. The province states it will need up to $25 billion of new investment in electricity generation to support cleaner energy sources and to meet the needs of our growing population. Alberta is transitioning to a capacity market to address and meet those needs.

What can I do?

While the details of the new market structure are still being worked out, it’s impossible to predict what these underlying energy market principle changes will do to electricity prices. Guaranteed rate plans are one way you can help hedge against future changes and find stability for your energy costs amid the changes.

According to ATCOenergy’s Senior Energy Marketer Taj Dhillon, “Prices for 2022 and 2023 are some of the lowest priced years for power. This could be a good time for building owners to consider forward hedging today, to guarantee those low-priced years.”

How will the capacity market operate?

The Alberta Electric System Operator (AESO) will function as the entity to secure the best capacity prices for consumers through a competitive process of auctions. One auction will happen every year for a delivery date three years away.

Rebalancing auctions will allow the volume of capacity bought and sold to be adjusted to reflect changing conditions. Capacity costs will be recovered using a weighted energy methodology, the details of which the AESO is currently consulting on.

The competitive nature of the auctions will challenge generators to become inventive and sustainable.

What’s next?

The process starts this year to prepare for the delivery of electricity in 2021. This could be a good time to consider your investment decisions for your properties or upcoming projects. A consultation with an energy expert can help you find solutions to keep your costs per square foot low and stable amid Alberta’s changing energy landscape.

Look for a trusted local advisor who understands Alberta’s energy market and can help answer your questions, help you secure low fees and pricing, and avoid broker or consultant fees.

To find out more about what changes to the capacity market could mean for you and your energy bill, contact your local ATCOenergy advisor at 1-844-887-6937.

All customers are free to purchase natural gas services from the default supply provider or from a retailer of their choice and to purchase electricity services from the regulated rate provider or from a retailer of their choice. The delivery of natural gas and electricity to you is not affected by your choice. If you change who you purchase natural gas services or electricity services from, you will continue receiving natural gas and electricity from the distribution company in your service area. For a current list of retailers, you may choose from, visit www.ucahelps.gov.ab.ca or call 310-4822 (toll-free in Alberta).