Alberta's energy watchdog, the Market Surveillance Administrator (MSA), has indicated electricity providers in the province are “signaling” each other to keep prices up.
Surprise, surprise.
Electricity prices in Alberta have been on the rise since the PC party created a system based on markets and competition, which included the MSA as an overseer to ensure “Alberta's electricity markets are fair, efficient and competitive.”
However, it now appears the body entrusted with ensuring competitiveness is claiming the very companies created to compete with each other and keep prices reasonable are colluding to ensure prices keep rising, using the Historical Trading Report (HTR).
According to the MSA's report, available to the public on Albertamsa.ca, “The (HTR) is a spreadsheet published by the Alberta Electric System Operator (AESO) 5-10 minutes after the end of the settlement interval (every hour of the day). It discloses all market participants' offer prices...includes the volume offered at each price. It does not identify the assets associated with the offers. However, in practical terms, sophisticated market participants can decode the report with a high degree of certainty and therefore know the price and volume their counterparts were prepared to sell at, effectively their competitive intentions, and this is repeated 24 times each day, seven days a week.”
The report goes on to call Alberta's electricity market an oligopoly - a market form in which a market or industry is dominated by a small number of sellers. Oligopolies can result from various forms of collusion, which reduce competition and lead to higher costs for consumers.
The PC party started restructuring the public market in 1996, which up until then prescribed prices based on regulation. The goal of deregulation was to sell off the public utilities and diversify Alberta's power market.
Evidence suggests the system has diversified, adding wind power to its mostly coal-fired power grid. There are also steam generators used in oilsands extraction that produce more power than the companies using them require. The excess is then sold back to the power grid.
There has also been significant spending on new infrastructure and upgrades to older items.
Certainly, building and upgrading electrical infrastructure requires initial investment from the power provider, but once the construction is complete, the cost are passed on to the consumer indefinitely, while the company completely recoups its investment and in turn increases profit.
Albertans require power to survive this climate. However, the current system is clearly gaming the consumers and that is not right.
The government stepped in nearly two decades ago to change what it deemed a flawed system. Will it step in again, this time to protect the people, or will corporate interests continue to run the province's power grid?
