Alberta electricity and natural gas 2019 year in review

2019 Review

2019 was a significant year for policy development and changes in the Alberta power and natural gas markets. Many changes likely impacted your business today. The year began with the provincial New Democratic Party (NDP) in power and a plan to move to a capacity market in 2021. The provincial carbon tax was $30/tonne, higher than the federal mandate of $20/tonne. At the end of 2019 the market looked much different, with notable changes.

Provincial

  • On April 16th, 2019 Alberta elected the United Conservative Party (UCP) as their provincial government
    • The party removed the provincial carbon tax effective April 30th, 2019
    • The party introduced Bill 18 – Capacity Market Termination which received royal assent in October
    • The party stopped funding the Renewable Electricity Program

Federal

  • On October 21st, 2019 the Liberal government was re-elected with a minority government in Canada
    • Under the federal government, the Greenhouse Gas Pollution Pricing Act came into effect in Alberta on January 1, 2020
      • There are two parts to this agreement, a regulatory charge on fuel (Federal Fuel Charge) and a regulatory trading system for industry (Output-Based Pricing System, OBPS)
    • Federal Fuel Charge: C&I customers will see a new line item on their Natural Gas bill of an additional $1.05/GJ from January 1, 2020 – March 31, 2020 and $1.58/GJ from April 1, 2020 through March 31, 2021
      • 80% GreenHouse – targeted relief for rural and remote residents, farmers and fishers will get partial relief 80% of natural gas levy charges credited back. For these natural gas users the 1st line item within the TBF will be the full carbon levy amount, whereas the 2nd line item will be the credit amount of 80% of the TBF carbon levy charge amount.
    • OBPS: For April 1, 2020 – March 31, 2021 Alberta was granted OPBS equivalency for the Technology Innovation and Emission Reduction (TIER) framework
      • TIER applies to large emitters and is priced at $30/tonne with industry driven standards.
    • On June 21, 2019 the National Energy Board (NEB) was replaced with The Canadian Energy Regulator (CER)
      • The CER approved the Temporary Service Protocol (TSP) to change gas flows during times of maintenance or outages. AECO gas saw significantly more volatility and a price increase because of this. Prices increased to above $2/GJ for the remainder of the summer contract. It was suspended over the winter contract but will start again April 1, 2020 for the summer contract.

Market News

  • The price of Alberta power averaged $54.88/MWh
  • The price of AECO gas averaged $1.66/GJ