Application Filing | Expedited Approval Received

On June 14, 2024, the AESO filed an application for expedited approval of the Interim Market Power Mitigation Rules pursuant to Section 20.6 of the Electric Utilities Act (Act) with the Alberta Utilities Commission (AUC).

On June 19, 2024, the AUC issued Order 29093-D01-2024 approving the AESO’s Interim Market Power Mitigation Rules under Section 20.6(3) of the Act. Pursuant to Section 20.6(4) of the Act, subsection 2 of Section 206.2 of the ISO rules takes effect June 21, 2024 and the balance of the Interim Market Power Mitigation Rules take effect July 1, 2024.

The application, all associated appendices and Order 29093-D01-2024 can be viewed under Proceeding 29093 on the eFiling section of the AUC website. Click here to create a new account or log in to eFiling.

Please contact rules_comments@aeso.ca with any questions.

Purpose

To share with stakeholders the AESO’s plan and design to implement changes regarding the interim market power mitigation. The AESO will share key dates, relevant design details, ISO rule amendment information and other key training materials. A method for stakeholders to submit questions will also be made available. This engagement will be applicable to market participants directly or indirectly impacted by the interim market changes, and any other interested stakeholders.

Background

In March 2024 the Alberta government announced regulatory changes regarding economic withholding in the energy market, based on recommendations it received from the Alberta Electric System Operator and the Alberta Market Surveillance Administrator. Two new regulations, the Market Power Mitigation Regulation and the Supply Cushion Regulation, and ISO rule amendments will enable the policy changes. The first regulation implements a secondary offer cap on thermal offers of market participants with a five per cent or greater market share once a certain net revenue threshold has been reached in a month. The second regulation requires the AESO to direct long lead time assets online when the AESO’s supply cushion is forecasted to be below the specified threshold. The AESO will also be making ISO rule amendments to support the changes.

These changes are being implemented to address affordability and market power concerns which balance the mitigation of excessive exercise of market power with minimal interference with market functioning while also ensuring that generators are able to make a reasonable rate of return.

The measures are interim and are to be replaced with a different mitigation approach, which is to be consulted on in the final Restructured Energy Market design.

The rule changes to implement the interim market power mitigation will come into effect by July 1, 2024.