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ARTICLE · 18 SEPTEMBER 2020

The Static Quo – AESO Releases Its Pricing Framework Recommendation

Borden Ladner Gervais LLP
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In April 2019, Alberta elected the United Conservative Party (UCP). The UCP promptly announced it would undo the prior government's plan to switch Alberta's electricity market, from an...

CanadaEnergy and Natural Resources
Peter Bryan
Peter Bryan
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Introduction

In April 2019, Alberta elected the United Conservative Party (UCP). The UCP promptly announced it would undo the prior government's plan to switch Alberta's electricity market, from an energy-only electricity market to a capacity market. In deciding to maintain Alberta's energy-only electricity market, the UCP cited the structural and administrative simplicity of the market design, the proven track record of investment, and the reliable supply of affordable electricity in the province.1

Having affirmed the energy-only electricity market, the UCP directed the Alberta Electric System Operator (AESO) to consider if changes were needed to the existing energy-only market design, and, in particular, if any changes were needed to the price floor/ceiling and shortage pricing mechanisms.2 Such a review of the pricing framework is important as the Alberta electricity market continues to evolve and phases out of coal generation, increases renewable generation,

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