MLA report August 1

Hello Chestermere! First, a huge shout out to the City of Chestermere–especially Nancie Huneault for a wonderful Waterfest this year.  The event was so well attended, and it was an honour to participate.  In this great province we live in one thing you can always be sure about is that you don’t know what will happen with the weather, and Waterfest didn’t let us down.  As folks were gathering to hear the bands at the beer gardens, a massive wind picked up and it was so strong that it actually picked up large items and flung them across the parking lot.  We hope that everyone is ok.  What an intense storm!  It lasted for about an hour and then cleared up in time for some amazing fireworks. 
I wanted to talk a bit about electricity. As I write this wind is providing 96 MW, or 0.9% of Alberta’s 10026 required generation, far less than the rated 1445 MW of wind generation installed (check out http://ets.aeso.ca/ets_web/ip/Market/Reports/CSDReportServlet if you want to watch our generation mix: it updates about every 5 minutes). I have written many articles before describing what I think is the best model and why and so I would like to take some time to describe the outcomes of our working groups and why we are staying with an energy-only market instead of the NDP “capacity” market.  Basically, a capacity market pays people to have generation available whether it is being used or not. We consulted with many stakeholders across the province to make this determination.  The energy-only market works like this:  generators of electricity are paid for the electricity that they produce, and they are paid wholesale, and that can move around.  The companies that generate decide on what types of generation to do and they decide what facilities they want to use to create that generation.  Capacity works like this:  private generators are paid through something called the spot market, and it is a mix of competitive contracts that are auctioned and that pays their fixed capital costs and their revenue.  The government arm of this would be the Alberta Electric Systems Operator who then administers the contracts and buys capacity.  The Energy-only market was approved by the stakeholders because it is simple, it is affordable, it gives the right market indicators for a competitive market, and it takes renewables into the mix as well without over charging you the rate payer.  We will be amending this legislation in the next session.  This renews certainty in the electricity system as well as investor confidence.  Recently, Germany has had a crash with their wind power as they could not sustain the subsidies or keep up with the maintenance.  The need to review our market-based system was best for all of us as we cannot keep experimenting with the market.  It drives away competition and makes it more expensive for all of us.  We presently have 5000 megawatts of natural gas, wind and solar contracts approved by the province.  These projects create jobs and bring you the best price, that is fair and reliable.  Did you know that we have been operating an energy-only market since 1996 in Alberta? It has provided consumers with some of the lowest electricity costs in North America and that is a huge competitive advantage for Alberta. Let’s keep it that way. You may reach my office at 403-207-9889 or chestermere.strathmore@assembly.ab.ca.. As always we love to hear from you!