Written by: Heather Donaldson
The Market Surveillance Administrator has initiated an investigation into the Balancing Pool related to its strategies to offer electricity into Alberta’s power market earlier this year.
The Market Surveillance Administrator is in place to monitor Alberta’s electricity and retail natural gas markets to ensure they are operating in a fair, efficient and openly competitive manner. It exists under the Alberta Utilities Commission Act with a broad mandate including surveillance, investigation, and enforcement.
The Balancing Pool is an independent government agency created in the late 1990s to backstop power purchase agreements on behalf of consumers in a competitive market. Essentially, the Balancing Pool bears the risk of buying and selling electricity in Alberta in return for the opportunity to collect greater profits.
It’s expected the MSA will look into why the Balancing Pool was offering coal-fired electricity into the grid in the spring when power prices were tumbling, and demand was declining. Some power companies chose to shut down their generating units and many tried to reduce operating costs in response to the COVID-19 pandemic.
“The investigation focuses on the Balancing Pool’s conduct in relation to potential breaches of the Electric Utilities Act,” the MSA said in a notice issued this month. Under the act, the Balancing Pool is required to “manage generation assets in a commercial manner.”
If found to have breached the act, the Balancing Pool face administrative penalties of up to $1 million a day.
Agency officials say they believe the organization has acted within the rules.