Generation

Under the Electric Utilities Act, all consumers share the costs and benefits of the generation facilities in existence in 1995 when the Act was passed. This sharing is accomplished through legislated financial arrangements (hedges). The costs for new generation brought on line after the passage of the Act are not shared.
Also the act created an independently operated power pool through which electricity is bought and sold in Alberta.

How the Pool Price is determined

The Power Pool of Alberta operates an open market for the exchange of electricity by matching energy supply with demand, the Pool establishes an hourly market price which is broadcast on the Pool’s Web site (http://www.powerpool.ab.ca). Here’s how the price is established:

• The Pool receives energy supply offers and demand bids from Pool Participants (see the fact file: What are offers and bids?).
• Pool Schedulers sort the offers and bids, by price, into a stacked merit order. A merit order is developed for each hour of the trading day and given to the System Controller.
• As the demand for electricity shifts throughout the day, the System Controller keeps supply and demand in balance by dispatching the next offers or bids in the merit order.
• Every minute, the last energy block dispatched (the unit on the margin) sets the System Marginal Price (SMP). The SMP is published on the Pool’s Web site and updated every five minutes.

ENMAX RATES THE HISTORY

Prior to the Act Enmax purchased its energy from a single generator who charged Enmax based on the city wide peak demand, this occurred in the winter months. The generator provided financial incentive to reduce this peak demand, therefore, Enmax structured its rates to include similar incentives to customers.
Since the passing of the Act Enmax costs are based on demand at each of the 37 sub stations which can peak at any month in the year. Also energy is charged on the hourly Pool price.

MODIFICATIONS TO RATES EFFECTIVE OCTOBER 1 1998

In preparation for the deregulation of the electric energy industry in Alberta, Enmax Power Corporation, changed its rate structure for commercial and industrial customers.
In order to improve equity among customer groups, Large Power Rates (Rate Codes 662 to 680) are being eliminated. Customers on these rates will be switched to Enmax’ s Large Power Time of Use Rate. Large Power customers switching to the Time of Use Rate can expect to experience an increase in the cost of their electrical service. However, Enmax will provide shielding from increased costs associated with the rate change until October 1, 1999. In addition to deferring the impact of the rate change for 12 months, the shielding will allow time to adjust budgets and to explore various cost reduction alternatives.
Also, modifications to General Service Demand Energy (GSDE) Rates 511 to 629 took effect. The last change to GSDE rates took place more than four years ago in April 1994.

Purpose of new and modified

Rates To operate in a deregulated environment, Enmax’s rate structure must more accurately reflect the true cost of purchasing and supplying electric service. Over the past eight years, Large Power Rates have not fully reflected Enmax’ s cost of service. In effect, Large Power customers were not paying their fair share of costs. All the major electric utilities in the province are experiencing such rate disparities and all, including Enmax, are addressing the issue.

Other Options

Direct Access Tariff:
Background Information
Part of restructuring includes a chance for customers to make their own decisions on their electricity needs. Because this is now possible, customers may make these decisions based on the price of electricity in the market.
The hourly price of electricity in Alberta is set by supply and demand at the Power Pool of Alberta; therefore, customers who use time-of-use meters and have the ability to manage their electricity load may benefit from direct access to the Power Pool.
Customers who use a time-of-use meter are able to track their electricity consumption on an hourly basis. At this time, these are the only customers who are eligible for direct access to the Power Pool.
Alberta utilities are required by the Electric Utilities Act and Distribution Regulation to serve customers who want to deal directly with the Power Pool for their energy supply. When customers deal directly with the Power Pool, they are charged a direct access tariff.
In response to the Electric Utilities Act, Enmax is pleased to propose its own Direct Access Tariff. This tariff is designed to be a joint effort between Enmax and its customers and as a result, customers will be consulted for their feedback.

Before filing this tariff with the Alberta Energy and Utilities Board, Enmax would like input from its customers. To gather that input, customers with time-of-use meters have attend one of two information sessions. Further consultation and negotiations will begin in early 1999.

The Direct Access Tariff will be in effect from April 1, 1999 to Dec. 31, 2000 and will be available to 50 customers. By Jan. 1, 2000, 50 additional customers will be able to use the Direct Access Tariff.

And while customers without time-of-use meters are not currently eligible for direct access, their input will also be sought in early 1999.

During the coming months, Enmax will be working to identify and develop other options which might better suit customer requirements, including customized supply contracts, load management options and other time based rates.

Enmax will continue to work with customers to develop new rates and pricing options to better meet the needs in a competitive industry. Enmax will be informing customers of these opportunities through their team of Key Account Representatives who can be contacted at (403) 268-1118.