Electricity Bills Rigged - What's Stacking?

[Kathy]

First article is news from last November where-in TransAlta declares their true corporate spirit! The second article is a letter to editor from Joe Anglin, about how power costs stack up - a must read... and spread the LTE around for all to see!

1.TransAlta Corp. admits to market manipulation - Utility fined $370,000 for bending power trade strategy rules

CALGARY — TransAlta Corp. faces paying the highest penalty in Alberta’s history after admitting to manipulating power prices last year but critics say the $370,000 fine is a pittance compared to an estimated $5.5 million consumers paid in inflated costs.

TransAlta, which controls 16 per cent of Alberta’s commercial power, admitted to purposely blocking the import of cheaper hydroelectric power from British Columbia over 31 hours last November, creating an artificial shortage of electricity — and higher prices.

A settlement agreement negotiated with Alberta’s energy market monitor pegged TransAlta’s profits for the trades at $245,000 — the difference between the inflated price and what it would have been without the push... [for full article go to: http://www.calgaryherald.com/business/TransAlta Corp admits market manipulation/5671487/story.html

Here's an excellent Letter to the Editor from Joe Anglin. Saw his presentation in Hanna on the 6th, and it was very informative.


2. How's that electric bill working for you now? (as seen Vegreville Advisor)

It’s difficult for most Albertans to decipher the complexities of Alberta’s deregulated electricity system, but it is not difficult to conclude that our so-called market based electricity system is not working. One only needs to read the bottom line of last month’s electricity bill for confirmation.

Albertans were told sixteen years ago that it was in our best interest to dismantle one of the best-regulated electricity systems in North America for a market based system that would lower the price of electricity. So how much longer do we wait?

Over the last couple of weeks industry representatives provided testimony to Premier Redford’s “Transmission Review Committee” hearings. The Alberta Electric Systems Operator (AESO) and other industry representatives praised our market-based system as a shining example of the success of deregulation. I have a question for these representatives ~ “What market based system?”

The AESO prices electricity approximately every two hours for Alberta’s wholesale electricity market. Every two hours generators offer to sell their electricity based on market demand. This is how the price is set, and it is called the stacking order. The stacking order is a simple creation of the AESO, and it favours the generators and transmission line companies at the expense of the average consumer. For example:

When the AESO requires 8,000 megawatts (MW) to supply the market for the next two hours, hydroelectric power might offer to provide 4000 MW of electricity to Alberta’s market for FREE. Coal generators might offer to sell 3800MW for $45 dollars a megawatt. The remaining 200MW might be provided (bid) to the market by other suppliers for $450 a megawatt. This completes the total 8000MW required by the AESO to meet the expected demand.

AESO accepts hydro’s offer first, and then accepts coal’s offer and so on. This is called stacking. How is this price passed along to the consumer? All the generation suppliers (hydro, coal, and the other suppliers) get paid the top rate of $450 a megawatt ~ regardless of what price they were willing to sell to the market! In this example, Alberta’s consumers don’t get the benefit of FREE hydroelectric power. Alberta’s consumers don’t get the benefit of $45 a megawatt from coal electricity. As long as demand remains close to the 8000MW level for the next two hours, consumers pay the full price as if the total 8,000MW cost $450 a megawatt, even though 50% of the electricity was offered for FREE and another 47.5% was offered for $45 a megawatt!

If this wasn’t bad enough, when hydro and co-generated electricity in Alberta drive the wholesale price of electricity to $0MW (FREE), the AESO interferes and clears the market (cancels all bids). The bidding process then starts over again.

Alberta’s electricity system is not a market-based system. It is a scam that guarantees the maximum price for the lowest cost electricity! Consumers are victimized by this pricing mechanism. Alberta didn’t move to a deregulated system. Alberta went from a regulated system to a rigged system, and it’s time we unrigged Alberta’s electricity market!

Joe Anglin
Rimbey, Alberta

[grassfarmer]

Thanks Kathy that letter from Joe never made it to
the local paper in Rimbey for some reason. Another
excellent expose of the BS that is "free enterprise" in
Alberta. How do you get the average Albertan aware
of this stuff, aware enough to think and to vote
against the people who allow it?

[ag-boy]

very interesting reading KATHY!!!!!
Manipulation! We where with Direct -Energe two billing system after many phone calls ,went back to the old billing and saving every month so far
TAXPAYER where manipulated by transalta scam small fine of $370,000
every day we read of manipulationand different collection outfits for transalta to get our fee.
We all have to keep watching our montly bill POWER AND GAS AS WELL
I noticed our Government is for the big CORP and this good topic on AGRI-VILLE about BILLS RIGGED !!!!!!
again KATHY keep us up to date
any more comments coming ?????
look at your monthly statement and
compare !!!!!!

[ASRG]

Thanks for posting that info Kathy.....somehow I missed it!
Have now posted it on the ASRG website: www.albertasurfacerights.com

[ASRG]

Incredible! Power lines Will be Built.....Redford Listened!

February 13, 2012
Committee recommends two north-south transmission lines; calls for new process for designating future projects

Government to respond to report in coming weeks

Edmonton... The Critical Transmission Review Committee has found that forecasts showing a need to immediately reinforce the transmission grid are reasonable, and recommends proceeding as soon as possible with development of two high-voltage direct current transmission lines between the Edmonton and Calgary regions.

“In our considered view, the planning for these transmission lines has been reasonable and they are required to meet the needs of Albertans,” said committee chair Brian Heidecker. “We do recognize concerns expressed about Bill 50 and recommend amending the legislation to remove the ability of cabinet to designate any future projects as critical.”
The committee recommended changes to legislation so that consideration of the need for future projects is returned to the Alberta Utilities Commission (AUC). It is also recommended that the AUC consider options that will mitigate the cost impacts of the transmission reinforcement to residential and industrial consumers.

“The committee has done a thorough job and I appreciate their efforts. Their findings will be carefully considered and responded to in the near future,” said Energy Minister Ted Morton.

The committee found that the cost impact of developing the lines is anticipated to be $3 a month for residential consumers. The impact on industrial consumers would be $1.25 a megawatt hour (MWh) per billion dollars of investment, or $3.75/MWh total.

The committee also noted that Alberta historically imports more power than it exports and concluded that concerns the lines will be used to export power are unfounded, as the export of thermal energy from Alberta against hydro and US gas-fired generation is not economically viable.

Appointed on Dec. 6, 2011, the committee heard from 30 organizations representing landowners, municipalities, electricity producers and consumer associations during the course of their review.

Heidecker chaired the committee which included Dr. Roy Billinton, Dr. Joseph Doucet, and Henry Yip. The committee report is available at www.energy.alberta.ca.


-30-
Backgrounder: Recommendations of the Critical Transmission Review Committee

Media inquiries may be directed to:
Derek Cummings
Public Affairs Officer
Alberta Energy
780-422-3786

To call toll free within Alberta dial 310-0000.




February 13, 2012
Recommendations of the Critical Transmission Review Committee

The following recommendations are being put forward by the committee to address concerns related to development of the north-south transmission reinforcement between the Calgary and Edmonton regions:

Economic, Demand and Generation Forecast
1. The committee finds that AESO’s economic, load and generation forecasts for Alberta are reasonable.

The data, methodology and intellectual rigour used to determine future demand for electrical transmission in Alberta is credible and robust. The AESO has access to exclusive statistics from real-time data points across the provincial grid to analyze the transmission system as well as appropriate information on load and generation development. We believe that the AESO’s team has greater specialized knowledge for the Alberta electric demand than any other single organization and also consults widely with stakeholders and external forecasting experts to vet its approach and results.

Need for Transmission Reinforcement
2. The committee agrees that the AESO’s recommendation to proceed with the development of two 500 kV transmission lines is reasonable.

*The need analysis conducted by the AESO indicated that the anticipated planning flows associated with the considered scenarios exceed the existing limits on the South of Keephills (SOK) cut plane. As a result, immediate reinforcement of the north-south transmission system is required due to the increasing difficulties in complying with industry standards and AESO operating rules and procedures. The committee notes that the need for the transmission reinforcement was established in 2004 and approved as part of the regulatory process in place. Since that time, growth in the province has increased and so has the demand for electricity. In addition, the likelihood of brownfield, greenfield and co-generation developments in northern Alberta increases the need for additional north-south transmission capacity. This approach also supports Alberta’s fair, efficient and openly competitive electricity market.

High Voltage Direct Current (HVDC) Technology
3. The committee has determined that the AESO’s decision to use HVDC technology is reasonable.

The use of HVDC transmission reinforcement is more respectful of landowners. The HVDC transmission towers have a smaller footprint making it less inconvenient for landowners. The technology can also be scaled up to provide greater transfer capacity without requiring future access to the right of way. There are additional technical benefits to the use of HVDC. This includes operating flexibility and the ability to control the flow of electrical energy on the north-south interconnection. The Alberta government, recognizing these benefits, directed the use of HVDC where possible.

Timing and Sequencing
4. The committee finds it reasonable for the Alberta government to proceed with the development of the two 500 kV HVDC transmission lines as soon as possible.

The committee agrees with proceeding with both lines due to the significant risk of regulatory and construction delays of the transmission reinforcements. With large scale projects of this magnitude, moving forward with both projects concurrently is a sound approach given the increasing pressure on the transmission system. By proceeding concurrently with the Western Alberta Transmission Line (WATL) and Eastern Alberta Transmission Line (EATL), the need for a reliable electrical transmission system between Calgary and Edmonton is more likely to be satisfied on time and provides capacity in advance of the need for a second line. The committee understands that the addition of either WATL or EATL alleviates the immediate operating concerns and meets the requirements to support the transmission needs of the Calgary region in the short-to medium term.

Electric Statutes Amendment Act, 2009
5. The committee recommends the government amend the legislation authorizing it to designate future proposed transmission facilities as critical transmission infrastructure. The need for future critical transmission infrastructure would then be considered under the authority of the Alberta Utilities Commission.

Rate Impacts
6. The committee understands that there will be rate increases associated with the development of north-south transmission system reinforcement and recommends the AUC consider options that will mitigate the impact to consumers.

The anticipated cost to the residential consumer is $3/month based on the estimate that consumers absorb these costs at a rate of $1/month per billion dollars of transmission infrastructure investment. It is important to note that only 25 percent of Albertans have chosen fixed price contracts. The remaining 75 percent of Alberta’s residential customers remain on the regulated rate option which exposes them to the volatility of the market. The estimated cost to an industrial consumer is anticipated to be $1.25/ MWh. The committee acknowledges the concerns of the industrial customers. Additional work in this regard is underway through the Transmission Facilities Cost Monitoring Committee.

Competitive Bidding
7. The committee encourages the use of the competitive procurement process for future critical transmission infrastructure projects and the continued use for procurement of components.

*A cut plane is an imaginary line separating two areas of the transmission system to enable the evaluation of flow of electrical energy on multiple lines connecting these two areas.


-30-

Media inquiries may be directed to:
Derek Cummings
Public Affairs Officer
Alberta Energy
780-422-3786
To call toll free within Alberta dial 310-0000.

Alberta Government | Newsroom | Ministries Listing | Energy Home Page | News Releases | Top of Page |



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Copyright(©) 2012 Government of Alberta

[grassfarmer]

Unbelievable as you say ASRG.
I can see Joe having fun with this little quote
"The committee also noted that Alberta historically
imports more power than it exports and concluded
that concerns the lines will be used to export power
are unfounded"

Maybe they'll draw up some new plans that will
include fake schematics showing some of the power
heading into Calgary this time? On the previous
round it was clear there was no intent in the plan to
direct any of this additional power capacity into the
city despite dire warnings that it would suffer power
outages by 2009 unless the extra capacity was built.
I was in Calgary on Saturday and the lights all
seemed to be working three years on.

[Kathy]

I have a copy of Joe Anglin's power-point presentation given in Hanna on the 6th of February. At first, I was confused about some figures (MW versus MW.h and generator capacity etc.), but Joe has set me straight. If anyone wants a copy just email me at lkczar@hotmail.com


Three Dollars per month extra on our bills for the building of these HVDC power-lines! What is Brian Heidecker smoking??

Edmonton Journal article from January shows ATCO and ALTA LINK have already committed to spending millions on projects. ATCO claims their line will only cost 1.6 billion, while ALTA LINK claims their western line will only cost 1.4 billion - for a total of 3 billion. RIGHT! Where's the guarantees?
http://www.edmontonjournal.com/news/alberta-politics/200M already spent proposed transmission lines under review/6006888/story.html

"$200M already spent on proposed transmission lines under review - Firms told to stop spending on $3B project

ATCO and AltaLink have already spent about $200 million - money consumers could ultimately be on the hook for - on two proposed Edmonton-Calgary transmission lines that are now under review, according to Alberta Energy.

The ministry has requested the two builders and operators of the respective lines to stop spending on the $3 billion project until a Critical Trans-mission Review Committee appointed by the premier reports Feb. 10." [see link above for rest of article]

Heidecker stated it was imperative that at least one of the lines goes ahead right away... my guess it will be the ATCO line, since they have spent a significant amount of cash and effort to prep sites for their camps etc.

Also, in Joe's power-point it shows maps from joint Canadian/American transmission line proposals and it appears the east-HVDC-line is the main branch; allowing all the excess power from Fort MacMurray (co-generation) to make its way south to California.

[Kathy]

Check out this letter from City of Airdrie Alderman Allan Hunter, to Premier Alison Redford - regarding the bullying and cussing of Minister Liepert at a recent meeting with Airdrie Council:

http://www.albertalandownerscouncil.com/Feb%2002,2012-Alderman%20Letter%20Regarding%20Minister%20Liepert %20Cussing.pdf

[sumdumguy]

Alberta used to be a leader. Sask stood by and
watched in awe as your resource weath
benefitted albertans. Low taxes, no sales tax
cheap booze and gasoline. The wealth trickled
down to feather the nest of every albertan.

I really dont know what happened. It seems so
out of control now. Fill me in.

[kato]

Interesting. Three billion for two lines going from Edmonton to Calgary? What is that, about 300 km? That's a lot per km, isn't it?

Manitoba Hydro is working on one that goes from the north, to Winnipeg, and takes the long way around the lakes (which is a whole other controversy), and they're quoting 3.28 billion so far. That's for over 1000 km of line.

Two provinces, worlds apart.

[grassfarmer]

If only it were so simple kato. Truth is the $3billion
figure is bogus - it will be way more than that. This
is not really about an Edmonton-Calgary power line
its about lines built for export.
What the plan really involves is using taxpayer
money to build power lines which will be given to
for profit corporations and on top of that the
Government has guaranteed them a 9% annual
return on the investment which they didn't make
(the taxpayer paid).
Imagine that in farm terms - the Government buys a
farm, sets up the buildings and facilities and gifts it
to a farmer and also guarantees them an annual
return of 9% on the capital value of the assets. You
can bet the next generation would all want to farm
with a deal like that in place!
And you think Manitoba is a crazy place to live? Here
it looks like the lunatics are running the asylum.

[kato]

Wow.

Here there is no hiding the fact that our line is being built primarily for exporting power. There are markets in the U.S. lined up to accept it now. The money from the exports is put back into Manitoba Hydro, and keeps our rates lower, as you can see. I guess the main difference is who gets the profits.

Interesting how attitudes are different just two provinces apart. That old "Ten Little Countries" theory of mine at work again. Hydro is one little bit of the theory that actually seems to work to a Manitoba advantage, which is nice to see for a change.

[Kathy]

A word of caution regarding exporting power to the bankrupt USA. At a meeting in Trochu last year, a gentleman from the crowd informed people that the province of British Columbia has not been paid for selling electricity to the state of California, for over 5 years worth of exports.... how can that be profitable? The point being the USA is going to TAKE TAKE TAKE - and there is no guarantee, or much hope, of us getting paid for the power we export here in Canada. The Transnational corporations like TransAlta, will simply keep the money they make from exports somewhere else in the world, where they are exploiting the citizens.

[Kathy]

Here is an AESO response to Joe Anglin's letter re: electricity pricing/stacking which was also printed in the East Central Review.

The response entitled "Inaccurate Information" was written by Margaret Keating Erickson of AESO "Director Market Design". (NB - can anybody tell me where she actually points out an ERROR in Joe Anglin's comments?). Ms. Keating-Erickson is not returning our call. I'll post my comments after I hear from some of you.

link: http://www.ecareview.com/index.php?option=com_content&view=article&id=2426: inaccurate-information&catid=6:article&Itemid=2

"Inaccurate Information

Friday, 24 February 2012 18:45
As the organization responsible for managing Alberta’s electricity grid on a 24/7 basis to ensure reliable power is available to meet the needs of all Albertans, the Alberta Electric System Operator (AESO) wishes to correct inaccurate information included in a Letter to the Editor that ran in a recent issue of your publication about the structure of Alberta’s wholesale electricity market. Alberta’s wholesale electricity market design is based on the premise of an uncongested transmission system that enables all generators to compete to offer their supply to the grid. This competition benefits Albertans by ensuring they pay the lowest price possible for electricity.

While the transmission of electricity is regulated, the generation component is deregulated and decisions to build and operate generation facilities are made by independent, shareholder-held companies. These companies bear the risk and reward of those investments. Wholesale electricity prices are determined hourly by the lowest price that delivers enough supply to meet the total demand for that hour. This hourly price is called the pool price, and this market structure is called a clearing price model. Generators of electricity offer their power into the AESO-operated market at their own chosen price from $0 up to a ceiling of $999.99 per megawatt hour (MWh). These offers are sorted from the lowest to highest price for each hour of every day into a list called a merit order. The retail price for electricity paid by consumers in Alberta is based on the average pool price expected for the month ahead.
The AESO’s system controllers use the merit order to balance electricity supply and demand, dispatching the lowest-priced supply offers and moving up to the highest priced offers until all electricity required for that hour is supplied.

Approximately 6,000 – 7,000 MW of the 13,866 MW of generation available on Alberta’s electric system offers in at $0. In a clearing price model, contrary to the assertions of Mr. Anglin, this does not mean that those generators want to give their energy away for free.

There are costs to producing the energy (capital for construction and maintenance, salaries, fuel costs, etc.); and generators need to see a return on that investment. What it does mean is that they are willing to be price takers: it is important to them, for a variety of reasons, to produce that energy in that hour and they are willing to accept whatever price the market sets.

This includes taking the risk that on very rare occasions, the hourly price may actually settle at $0, and then that is what they get paid for their production in that hour. This was in fact the case six times in 2011. The wholesale price of electricity, like other commodities, is driven by supply and demand and varies depending on time of day, time of year and other factors. Supply availability can be affected by planned or forced generation outages, transmission constraints and how much energy we are able to import across our interties.
Congestion on the transmission system can impact the wholesale market price by impeding a generator’s access to the market, resulting in higher priced generation dispatched to the grid.
According to a study commissioned by the Independent Power Producers Society of Alberta, the Independent Power Consumers Association of Alberta and the Utilities Consumer Advocate in 2011, London Economics International benchmarked Alberta’s electricity prices for the next five years against other Canadian provinces and concluded that, when compared fairly, Alberta’s all-in delivered energy prices are competitive across Canada for both residential and industrial consumers.
Openly competitive generation allows Albertans access to competitively priced power. Our existing wholesale market structure supports economic development in Alberta and provides a reliable price signal for producers, consumers and investors, aiding private companies in making investment decisions that ensure an adequate supply of electricity for many years to come. In the 10 years since the restructuring of the industry, this point has been well-proven with 6400 MW of new generation added to the grid.
Please go to www.poweringalberta.com to learn more.
Sincerely,
Miranda Keating Erickson
Director, Market Design "

[Kathy]

Joe Anglin's response to Ms. Miranda Keating-Erickson:

Where is our FREE electricity?

In a letter to the editor, Miranda Keating-Erickson, the Alberta Electric System Operator’s (AESO) Director of Market Design described Alberta’s wholesale electricity market and wrote, “Generators compete to offer their supply to the grid. This competition benefits Albertans by ensuring they pay the lowest price possible for electricity.”

On the website www.ctrc-ab.ca Albertans can actually listen to an audio recording of the AESO executives describe the wholesale electricity market, as “elegant”. The remarks, and description of the market are located in the audio version of AESO’s overview testimony; they can be found at the 1:30:49 mark on the time scale.

According to Ms. Keating-Erickson’s letter to the editor, electricity generators don’t want to give their electricity away for free. They are just willing to accept nothing in return, for giving their electricity away. Think about this for a minute! If the electricity generators are willing to accept nothing, why don’t we just offer $0 a megawatt to all the generators and we can all go home happy? The fact is the wholesale electricity market is biased and favours the generators. All the generat