|Understanding How Energy Markets Work in Alberta||Actors in Alberta Energy Markets|
Understanding How Electricity Markets Work in Alberta
How Does Electricity Get to My Home?
The system that makes up your electricity service can be broken down into four steps:
- The majority of electricity in Alberta comes from coal-burning or natural-gas fired generation plants located throughout Alberta. Generation plants produce and sell electricity as consumers demand it in real-time (unlike natural gas, it cannot be stored in large quantities). This means that the quantity of electricity produced (and its price) can vary throughout the day, depending on the weather and consumers' needs.
- Electricity travels from its point of generation to local distribution systems over high-voltage transmission lines. These are owned and operated by regulated monopoly companies (utilities). The voltage of electricity is reduced at local transformers once it reaches the local distribution system.
- Once transformed to a lower voltage, electricity travels along the local distribution system that is owned and operated by the utility (also known as the wires services provider) that operates in the area. Utilities are also regulated by the Alberta Utilities Commission.
- Home Use
- When electricity reaches your home it is at a voltage that can be used by your appliances. You are billed for your monthly consumption by your power supplier (also known as your energy retailer). Along with billing, energy retailers are responsible for providing customer service.
You can find a more detailed explanation of your electricity service in our dedicated article.
How Does Deregulation Affect My Electricity Service?
Deregulation of electricity in Alberta has happened at two stages of the electricity service process: generation and retail. All electricity that is bought in Alberta must be sold over a single wholesale electricity market, known as the Alberta Power Pool. Electricity retailers purchase power on this market to meet the needs of their customers. With the deregulation of retail electricity markets, all power consumers in Alberta have a choice of energy retailer.
Understanding How Natural Gas Markets Work in Alberta
How Does Gas Get to My Home?
As is the case for electricity, your natural gas service works in four main stages:
- An energy-rich province, Alberta produces the majority of natural gas in Canada, and exports to other provinces in Canada as well as to the United States. Natural gas may be sold at the wellhead (point of production), after it has been processed, at a storage facility, or at the point of entry into the local distribution (utility) system.
- Once natural gas has been exploited and cleaned, it travels along transmission pipelines to its next point of storage or distribution. These pipelines are owned by regulated monopolies.
- Natural gas reaches your home through the local distribution system that is owned and operated by your local utility.
- Home Consumption
- As is the case for electricity, you are billed for your natural gas consumption by an energy retailer. This could be your local regulated rate provider, or a competitive energy retailer.
How Does Deregulation Affect My Natural Gas Service?
Similar to electricity, while the transportation and distribution sections of the natural gas service remain regulated, the production and retail sector have been deregulated in Alberta. This is actually the case for several other provinces in Canada. Natural gas prices are therefore based on market prices. Your energy retailer purchases natural gas on the wholesale market in order to meet the demands of its customers.
Actors in Alberta Energy Markets
The main actors in Alberta's energy markets can be split into five main categories: legislation, regulatory agencies, transmission, distribution and retail sector actors. You can find an overview of the different actors in Alberta's energy system in our dedicated article. Some important names that you might come across include:
- Utilities Consumer Advocate (UCA)
- The Utilities Consumer Advocate (UCA) represents the interests of small energy (power & gas) consumers in Alberta. The UCA provides information and educational resources about utility service on their website, and represent consumers during AUC proceedings. Find out how to contact the UCA.
- Alberta Utilities Commission (AUC)
- The Alberta Utilities Commission (AUC) a quasi-judicial administrative tribunal that regulates investor-owned natural gas and power utilities in order to ensure that energy service is delivered in a safe, reliable, and fair manner. The AUC approves regulated rates for electricity and natural gas, as well as the terms of service for utilities and regulated rate providers. Find out how to contact the AUC
- Competitive Energy Retailers
- Competitive energy retailers are licenced by Services Alberta under the Fair Trading Act. They offer a variety of contract options for energy (power and/or natural gas) supply, including prices at both fixed and variable rates.
- Regulated Rate Providers
- Regulated rate providers sell power or natural gas at the AUC-approved regulated rate. They have the exclusive right to provide the regulated rate within a certain utility's service territory.
Didn't find the name you were looking for? Check out our full article on Alberta energy market actors.