For all the supporters of "free enterprise" and the Con
government in Alberta here is a little expose of the
electricity deregulation scam by Joe Anglin, in a letter
to the editor. How can any sane person support a
system like this and the politicians who allow it?
"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"
government in Alberta here is a little expose of the
electricity deregulation scam by Joe Anglin, in a letter
to the editor. How can any sane person support a
system like this and the politicians who allow it?
"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"
Comment