Consumers need a voice in electricity market

Transparency and accountability sorely lacking, Sheldon Fulton writes.

CALGARY In Japan, when a bullet train arrives at its destination more than a minute late, an investigation is immediately triggered, and its swift findings made public, along with an apology and a plan to address the issue.

But when Alberta's electrical grid was pushed to the brink across three nights in January and an emergency alert was issued to warn consumers to conserve power or face the consequences, the response that followed was high in rhetoric and low on accountability.

While residents across Alberta did their part to keep their neighbours safe, switching off to the tune of 250 megawatts, the price of electricity hit its maximum cap of $1,000/MWH, 10 times the average price.

In examining the technical documentation of the event, it appears that Alberta's pricing mechanism and the Alberta Electricity System Operator's (AESO) own operational procedures may have made the situation worse, in spite of their own forecasts indicating a potential shortfall two days prior to the grid alert. But have we heard an apology or a plan to fix it? No.

It's crucial that Alberta's electricity consumers have real authority and resources to influence decision-making around the electricity sector that directly impacts their finances and quality of life.

This was just another example in a long line of ways Alberta's electricity system treats consumers: as an afterthought. Albertans already pay the highest electricity rates in Canada — twice the national average.

Before deregulation in 2000, the government consulted with consumer associations ranging from large industrial, commercial and institutional users to special-interest agricultural groups. For groups with limited funding, the government offered financial help to allow them to participate.

Unfortunately, consumer opposition to some electrical industry initiatives led the government to eliminate this assistance and establish its own consumer advocate body. However, with a constrained mandate and ever-shrinking budget — currently less than 0.05 per cent of the $15 billion in annual expenditures for electricity supply, transmission, and distribution in Alberta — it's hardly the champion consumers need.

For Alberta electricity consumers in 2024, there are two principal barriers to advocating for their interests.

The first factor working against the average Albertan's participation in their electricity system is its sheer complexity: From the tangled web of players working in regulated or deregulated spaces each with their own priorities and agendas, the market design, and the Alberta Utilities Commission (AUC) hearing process by which consumers are engaged.

The second is their ultimate inability to effect change. Other than attending meetings — in which they can't participate — or reading post-facto reports — whose findings they can't influence — there's no meaningful way for customers to ensure their interests are represented or to exert any authority over decision-making processes.

Moreover, in 2008, the AUC was directed by government to severely limit eligible consumer engagement and has been constrained in gauging the impacts of its decisions on consumer costs. Taken together, these actions have stripped average Albertans of an effective voice at the table in making big decisions about the grid. Worse, it suggests that while frequently touting their intention of “protecting Albertans,” the government is actively undermining them.

It's time Albertans are rewarded with transparency, accountability and a seat at the table where decisions are made. This is what Alberta's most diverse and representative coalition of electricity system stakeholders has put forward in Leading the Charge: A Vision for Alberta's Electricity Future.

It's time for the government to recognize that without the consumer, there is no electricity market.

Sheldon Fulton, an energy market consultant living in Calgary, has had an active role in the evolution of Alberta's power market since 1996.

He is also a participant in the Energy Futures Lab's Alberta's Electricity Future initiative.