Free market Alberta? - couldn't make this stuff up!

[grassfarmer]

As we've had a few posts on energy and oil I thought I'd post one about electricity in Alberta. Maybe some of the Con supporters can explain it because I find it incredible in the truest sense of that word.

On the energy pricing in our wholesale market:

The Alberta Electric System Operator runs an auction every 2 hours where all electricity suppliers must offer their output to meet estimated needs. They use a stacking system - so if the demand is expected to be 8000 mega watts 6400 MW might be offered at $0, the next 1200 MW are offered at $45 but the final 200 MW are offered in at $450. The 8000 MW have cost $144,000…. but no the AESO turns around and gives $450/MW for the entire 8000 MW to total $3,600,000.

Is this a free market or something you would blame on socialist, anti-free enterprise business model? Even the mafia wouldn't have the audacity to try something like this on.

Speaking of the mafia, the Quebec variety that comprise SNC Lavalin that's another "only in AB" tale.
Alta-Link was an $850million company that has been built up to a $3.2billion company using taxpayer money to pay 100% of the cost of power line and utility construction. On top of that the company was guaranteed a 9% annual return on investment in the infrastructure(that they didn't pay for) by the Government, again funded by the taxpayer.
So now SNC Lavalin who own AltaLink turn around and sell it to Warren Buffet for $3.2Billion and take their $2.35Billion profit to pay off some fines around the world.

The 500kv power line development currently going on in AB is slated to cost $16.5Billion whereas the most pricey projects the US have ever completed cost @$3Billion. It's OK though we taxpayers don't have to pay for it all at once - its being amortized over 100 years.

Is this how a free market economy is supposed to operate?

[farmaholic]

Sort of sounds more like Croney Capitalism.

[nicolaas]

this is what happens when we elect stupid people.... they get taken for a ride and so do we.

[checking]

Sounds equivalent to a demand charge where the meter sticks at the highest consumption of any day during a month, and you pay that rate for the entire month.

[sumdumguy]

I wish agricultural production was sold like that. How long do you think they would pay the highest price to everyone before someone would say, hold-it, there is something wrong with this picture?

[rockpile]

It was under Ralph Klein that the wholesale electrical market was "deregulated" but the production side was "re-regulated". On production, you could either own the copper or the electrons but not both. And that's what led to the sweetheart deals for AltaLink and TransAlta. The top end balancing provision (paying the highest bid price) was a concession to the coal lobby and those importing from BC and Sask.It's a total snafu!