Very hot weather has settled over Alberta over the past week with the province setting a new all-time summer peak demand of 10,802 MW with prices rising over 14% compared to the previous week. There was a big drop in the spot price for AECO gas, down $0.76/GJ week over week, attributed to reduced exports due to a TransCanada pipeline outage at Empress.

The Balancing Pool announced that terminating a subset of PPAs is in alignment with the organization’s mandate requiring it to manage its generation assets in a commercial manner and to conduct itself in a fashion that supports a fair, efficient, and openly competitive (“FEOC”) market. In order to proceed with termination, the Balancing Pool must seek feedback from various representatives of customers and the Minister of Energy regarding the reasonableness of its decision on termination of the Sundance A, B & C PPAs. If the PPAs are terminated and returned to the owners, it is expected that offer behavior will become commercially driven.

The forward markets are reflecting upward movement in 2018 (over $46/MWh) as the performance standard carbon tax is introduced at the same time Sundance 1 is retired and both HR Milner and Sundance 2 are mothballed and Battle River 3 is assumed to remain offline.