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REM Technical Design

Important Materials and Dates

April 10 | REM Design Finalization Session

April 4 | Stakeholder Update

Stakeholder Update | April 4, 2025

Thank you for your investment of time and resources in the Restructured Energy Market (REM) engagement process. We have come a long way in a short time. We have been listening and thoughtfully considering your feedback. Themes we’ve been hearing consistently across all stakeholder groups include concerns about the extent of the proposed changes. You suggested that refining the scope and concentrating on the essential market changes would enhance the success of REM.

At an AESO-hosted CEO Roundtable Breakfast on April 4, 2025, Aaron Engen shared with industry leaders that we have listened and are refining the proposed REM design by not moving forward with two of the three markets we have been exploring as part of the detailed REM design: the proposed day-ahead commitment market, and the day-ahead energy scheduling market. We determined these could be taken off the table while still achieving the reliability and affordability we need from Alberta’s grid. The day-ahead market for reliability products will be retained and expanded.

We will continue to develop new ramping reserve products. We will also push forward with formalizing a reliability unit commitment mechanism built off the Supply Cushion Regulation. The proposed energy offer cap will be increased above the current $999.99/MWh. The higher offer cap will help incent investment in new supply and will better support supply, demand and intertie market responses to tight market conditions.

Other elements of the REM design remain in place including:

  • Co-optimization of energy and ramping reserves, wider real-time price range (price cap of $3,000/MWh) to send more dynamic signals in the market
  • Congestion pricing (AESO preferred option: Locational Marginal Pricing [LMP]) in coordination with Optimal Transmission Planning (OTP) to manage congestion within the market
  • Market power mitigation measures (secondary offer cap) to provide guardrails against excessive exercise of market power

These changes focus on designing a reliable grid where:

  • Firm generation is compensated for its dispatchability (ramping reserve products, scarcity pricing)
  • The AESO has better tools to manage an increasingly complex and more congested grid with an improved market management IT system incorporating Security-Constrained Economic Dispatch
  • System costs are minimized through more efficient use of grid resources (OTP, co-optimization)
  • Transmission build costs are minimized (OTP)
  • Prices guide generators to develop facilities at cost-effective points on the grid (congestion pricing)
  • The impact of Transmission Regulation changes is minimized through temporary financial transmission rights for those affected by congestion in the system today
  • Loads have the opportunity to access lower energy prices at various locations (congestion pricing)
  • Alberta’s competitive electricity market continues to be supported with consumer protection guardrails (market power mitigation including a secondary offer cap)
  • Innovative grid solutions including batteries and demand response are incentivized

We recognize that stakeholders may have additional questions on this refined direction, so we are hosting an all-day session on Thursday, April 10 to share additional details about this step forward, rationale and implications to the rest of the REM design and timelines. Please note this one-day in-person session will replace the planned four-day Design Finalization Session Week 3, shortening it to just one day. There will be a virtual attendance option; however, similar to previous sessions, virtual attendees will be able to listen in only. We look forward to hearing your feedback and having further discussion.

Following this session, we will be releasing more information about the revised elements of the REM design and design finalization sessions before the end of May. Please also note that the sessions originally planned for April 23 through April 25 have been cancelled and will be rescheduled.

This will impact our planned stakeholder engagement schedule and timelines in the near term and may push rule approval into early 2026. We do not expect it to affect the longer-term implementation timelines.

Agenda - Design Finalization Session Week 3: Thursday, April 10, 2025
Time: 9:30 a.m. to 4:00 p.m. (Doors open at 9:00 a.m.)
Objectives:

  1. Discuss and Clarify Design: Provide the AESO an opportunity to explain the rationale and intent behind the recent refinements to the REM design. Stakeholders attending in person will be able to ask questions and gain clarity on the updates and next steps.
  2. Explore Design Impact and Interdependencies: Discuss how we are changing the proposed REM design. We will:
    • Keep and enhance the day-ahead market for reliability reserves
    • No longer moving ahead with the proposed day-ahead commitment market and the day-ahead energy scheduling market
    • Consult on a possible increase to the offer cap; and review the reliability unit commitment mechanism
    • Gather participant perspectives on what considerations the AESO should take into account as it evaluates the broader impacts and design
  1. Align on Stakeholder Needs and Priorities: Identify the information, formats, and topics that stakeholders need to move forward in the consultation process efficiently. Reassess and realign on priority topics for future discussions

Purpose

We have embarked on a multi-phased engagement with industry stakeholders to advance work on the new market design. It is comprised of a series of information sessions, written feedback cycles, and design sessions (sprints) to dive deeper into each workstream to explore and consider stakeholder perspectives and inputs prior to beginning the rules consultation process.

We will strive to ensure overall alignment with the stated REM objectives of:

  • Reliability
  • Affordability
  • Decarbonization by 2050
  • Reasonable implementation

Important Materials and Dates

April 10 | REM Design Finalization Session

April 4 | Stakeholder Update

Stakeholder Update | April 4, 2025

Thank you for your investment of time and resources in the Restructured Energy Market (REM) engagement process. We have come a long way in a short time. We have been listening and thoughtfully considering your feedback. Themes we’ve been hearing consistently across all stakeholder groups include concerns about the extent of the proposed changes. You suggested that refining the scope and concentrating on the essential market changes would enhance the success of REM.

At an AESO-hosted CEO Roundtable Breakfast on April 4, 2025, Aaron Engen shared with industry leaders that we have listened and are refining the proposed REM design by not moving forward with two of the three markets we have been exploring as part of the detailed REM design: the proposed day-ahead commitment market, and the day-ahead energy scheduling market. We determined these could be taken off the table while still achieving the reliability and affordability we need from Alberta’s grid. The day-ahead market for reliability products will be retained and expanded.

We will continue to develop new ramping reserve products. We will also push forward with formalizing a reliability unit commitment mechanism built off the Supply Cushion Regulation. The proposed energy offer cap will be increased above the current $999.99/MWh. The higher offer cap will help incent investment in new supply and will better support supply, demand and intertie market responses to tight market conditions.

Other elements of the REM design remain in place including:

  • Co-optimization of energy and ramping reserves, wider real-time price range (price cap of $3,000/MWh) to send more dynamic signals in the market
  • Congestion pricing (AESO preferred option: Locational Marginal Pricing [LMP]) in coordination with Optimal Transmission Planning (OTP) to manage congestion within the market
  • Market power mitigation measures (secondary offer cap) to provide guardrails against excessive exercise of market power

These changes focus on designing a reliable grid where:

  • Firm generation is compensated for its dispatchability (ramping reserve products, scarcity pricing)
  • The AESO has better tools to manage an increasingly complex and more congested grid with an improved market management IT system incorporating Security-Constrained Economic Dispatch
  • System costs are minimized through more efficient use of grid resources (OTP, co-optimization)
  • Transmission build costs are minimized (OTP)
  • Prices guide generators to develop facilities at cost-effective points on the grid (congestion pricing)
  • The impact of Transmission Regulation changes is minimized through temporary financial transmission rights for those affected by congestion in the system today
  • Loads have the opportunity to access lower energy prices at various locations (congestion pricing)
  • Alberta’s competitive electricity market continues to be supported with consumer protection guardrails (market power mitigation including a secondary offer cap)
  • Innovative grid solutions including batteries and demand response are incentivized

We recognize that stakeholders may have additional questions on this refined direction, so we are hosting an all-day session on Thursday, April 10 to share additional details about this step forward, rationale and implications to the rest of the REM design and timelines. Please note this one-day in-person session will replace the planned four-day Design Finalization Session Week 3, shortening it to just one day. There will be a virtual attendance option; however, similar to previous sessions, virtual attendees will be able to listen in only. We look forward to hearing your feedback and having further discussion.

Following this session, we will be releasing more information about the revised elements of the REM design and design finalization sessions before the end of May. Please also note that the sessions originally planned for April 23 through April 25 have been cancelled and will be rescheduled.

This will impact our planned stakeholder engagement schedule and timelines in the near term and may push rule approval into early 2026. We do not expect it to affect the longer-term implementation timelines.

Agenda - Design Finalization Session Week 3: Thursday, April 10, 2025
Time: 9:30 a.m. to 4:00 p.m. (Doors open at 9:00 a.m.)
Objectives:

  1. Discuss and Clarify Design: Provide the AESO an opportunity to explain the rationale and intent behind the recent refinements to the REM design. Stakeholders attending in person will be able to ask questions and gain clarity on the updates and next steps.
  2. Explore Design Impact and Interdependencies: Discuss how we are changing the proposed REM design. We will:
    • Keep and enhance the day-ahead market for reliability reserves
    • No longer moving ahead with the proposed day-ahead commitment market and the day-ahead energy scheduling market
    • Consult on a possible increase to the offer cap; and review the reliability unit commitment mechanism
    • Gather participant perspectives on what considerations the AESO should take into account as it evaluates the broader impacts and design
  1. Align on Stakeholder Needs and Priorities: Identify the information, formats, and topics that stakeholders need to move forward in the consultation process efficiently. Reassess and realign on priority topics for future discussions

Purpose

We have embarked on a multi-phased engagement with industry stakeholders to advance work on the new market design. It is comprised of a series of information sessions, written feedback cycles, and design sessions (sprints) to dive deeper into each workstream to explore and consider stakeholder perspectives and inputs prior to beginning the rules consultation process.

We will strive to ensure overall alignment with the stated REM objectives of:

  • Reliability
  • Affordability
  • Decarbonization by 2050
  • Reasonable implementation

  • Stakeholder Updates

    March 19, 2025

    Notice of Request | Proposals to Support Governance Model Initiatives for REM

    On the first day of the Restructured Energy Market (REM) Design Finalization Session (Week 1), the AESO presented an overview of the 2025 engagement activities across the REM, Optimal Transmission Planning (OTP) and Tariff engagements.

    As part of the REM development, we are seeking independent external expertise with respect to our design work and rules development, and stakeholder feedback process. To augment our engagement approach and review our design process, we will be contracting the services of independent parties and have issued Requests for Proposals (RFPs).

    Interested parties wishing to participate in the formal process can review the RFPs by visiting Alberta Purchasing Connection.


    Feb. 19, 2025

    2025 Engagement Plan Overview | Feb. 25

    On the first day of the Restructured Energy Market (REM) Design Finalization Session (Week 1), the AESO will present an overview of the 2025 engagement activities across the REM, Optimal Transmission Planning (OTP) and Tariff engagements.

    • Click here to register

    REM Design Finalization Sessions Week 1 | Feb. 25-28

    The purpose of this engagement week is to continue to discuss and evolve how market access, and congestion will be managed under REM. It will explore changes in our policy landscape, specifically the movement to an optimally planned transmission planning framework, and the introduction of transmission reinforcement payments (TRP), and the implications that these changes have (and don’t have) on how stakeholders evaluate and provide input into the overall REM design.

    Additional Topics | This week will also feature updates on:

    • 2025 Engagement Plan (REM, OTP and Tariff)
    • OTP engagement overview
    • Tariff engagement overview with focus on TRP
    • REM, OTP and Tariff interdependencies
    • Click here for agenda



    Jan. 29, 2025

    Issue Prioritization Session | February 11, 2025

    We will be holding an all-day in-person Issue Prioritization session to build on written feedback provided on the REM High-Level Design and work together to prioritize key focus areas and agendas for the upcoming Design Finalization Sessions (aka Design Sprints). New content will not be introduced, instead we will focus on reviewing, refining and aligning outstanding discussion topics to ensure our upcoming engagements address stakeholder priorities.

    Those who participated in-person in the REM Design Sprints last year will receive a direct email with a link to register. If you have not yet been involved in those but would like to attend this session, please contact stakeholderrelations@aeso.ca and our team will do their best to accommodate.

    Save These Dates!

    The REM Design Finalization Sessions are scheduled as follows:

    • Week 1 | February 24-28
    • Week 2 | March 17-21
    • Week 3 | April 7-11
    • Week 4 | April 21-25

    The agenda for Week 1 and exact days for each week will be shared soon.

    December 13, 2024

    Following the first six REM Design Sprints, we have released a high-level design document covering each element of the market design, incorporating what we heard and discussed with stakeholders. The written stakeholder feedback period will be open until Jan. 17, 2025.

    Additional direction from the Minister of Affordability and Utilities associated with the REM Market Design was provided on Dec. 10, 2024. View the Direction Letter and News Release.

    There is an updated report and data file from Energy+Environmental Economics (E3) that contains some additional information and clarifications of the analysis, as requested by stakeholders in Sprint 6. This includes a number of updates to the analysis on the impact of the most recent version of the market power mitigation framework, edits to clarify the concepts presented on a number of slides and new slides (15, 21, 28, 33, and 94).

    Materials posted this week include:

    Stakeholder consultations will help us continue to progress details on the final market design and work towards the ISO rule development stage. Watch for more information in mid-January on upcoming engagement opportunities.

    Thank you for your interest, participation and contributions throughout the REM engagements. Your commitment and dedication have been instrumental in getting us to where we are. We look forward to continuing to work with stakeholders in 2025 to achieve a market design that sets our industry partners, the AESO and all Albertans up for a successful energy framework for the future.

    October 25, 2024

    We have adjusted the REM Engagement Schedule to better reflect where we’re at in the iterative design process. Based on input from in-room participants, we have removed the second round of written feedback from the engagement schedule. Further discussions are needed to continue to progress the design details during Sprints 4 through 6 before we ask stakeholders to invest more time and energy into providing meaningful written feedback. The next written feedback cycle will follow Sprint 6.

    We welcome and encourage your continued input throughout – if you have comments or questions, please share them during the upcoming Design Sprints or reach out directly to members of our Markets team.

    Also note the following timeline adjustments:

    • Sprint 5 - Tuesday, Nov. 5 to Thursday, Nov. 7
    • Sprint 6 - Monday, Nov. 25 to Thursday, Nov. 28
    • Inform Session - Thursday, Dec. 12

    See full schedule here or below

    August 16, 2024

    We have added a number of items for stakeholder information and action.

    If you missed the registration for in-person participation in the REM design sprints, email stakeholderrelations@aeso.ca. The virtual registration links will be shared soon.

    July 24, 2024

    The AESO has published the Intent to Register and Agreement to Participate for the fall REM engagements. If you're planning to attend the engagements in-person or virtually, please fill out the Intent to Register form by August 6, 2024. The Agreement to Participate document applies if you're attending any REM engagements in 2024. Ensure you have read and understood it before you submit the Intent to Register form.

    July 11, 2024

    The Minister of Affordability and Utilities, Nathan Neudorf, has provided the AESO direction on government policy decisions on our path forward for the Restructured Energy Market (REM) design (Direction Letter).

    With this clarity, we are pleased to share that the REM technical design will include the following workstreams:

    • Mandatory Day Ahead Market
    • Energy and Reserve Pricing
    • Dispatch Optimization
    • Market Power Mitigation
    • Intertie Participation NEW!
    • Shorter Settlement

    We have adjusted our REM recommendation and design consultation in response to stakeholder feedback and policy decisions. We appreciate your patience and ongoing contributions as we move through this process together. Administrative Scarcity Pricing has been removed from the design, however new reserve products are still required for reliability and will be addressed under Energy and Reserve Pricing.

    We will cover each of the workstreams in more detail at the July 18 Information Session and provide our revised engagement approach then.

    Written consultation for Shorter Settlement continues and Intertie Participation will kick off shortly. Option papers for both will be shared on July 18 with comments due by August 9. Detailed information about the remaining workstreams will be released on August 16, with the first round of written feedback on those due September 6. Interested stakeholders will then have an opportunity to participate in a more comprehensive series of multi-day in-person sessions and written feedback cycles from September through the end of the year.

    We remain committed to consultation that prioritizes open participation, transparency and adaptability and we look forward to working with you to ensure we build a market framework that delivers certainty and economic value for industry and Albertans into the future.

    The Transmission Regulation decisions provided in the Minister letter give AESO and stakeholders a view into the changing policy that the REM will need to be designed within. The government supports continued progress of the technical REM design; however more clarity/decisions are needed to fully assess how AESO transmission planning, tariff and system access will be considered and impacted.

    To register for the July 18 Information Session, click here.

    June 19, 2024

    While the AESO has limited details to share on the REM technical design and the engagement schedule at this time, we recognize that many parties are interested in updates to support work planning through the coming months.

    The AESO continues to progress design work on the REM in parallel with government policy. We anticipate releasing content through July and August for review and written feedback and will initiate the more time-intensive engagement sessions in the second week of September. The earlier content will focus on Interties and Shorter Settlement, with all other market components to follow.

    We remain committed to engaging stakeholders in a timely and comprehensive manner to develop Alberta’s market design and will share more details as they become available.

    May 22, 2024

    On Friday, May 17, 2024, AESO President and CEO Mike Law and Nicole LeBlanc, Vice President of Markets met with a select group of industry executives representing companies that have made significant investments in Alberta’s grid and/or represent the consumer voice of Albertans, to discuss two options for how energy market offers, offer mitigation and scarcity pricing (pricing options) could be treated within the Restructured Energy Market (REM), and a third REM alternative pricing option.

    The three options are based on stakeholder feedback received at the April 2024 Executive Working Group meetings and through the industry-wide survey on the REM. Click Pricing and Mitigation Options and ORDC Technical Primer to view materials provided to meeting representatives.

    The organizations that attended the meeting are Alberta Direct Connect Consumer Association, AltaLink, ATCO, Canadian Renewable Energy Association, Capital Power, EDF Renewables, Enfinite, ENMAX, EPCOR, FortisAlberta, Heartland Generation, Industrial Power Consumer Association of Alberta, Kineticor Energy, Maxim Power, Suncor Energy, TransAlta, and the Utilities Consumer Advocate. The Market Surveillance Administrator attended as an observer.

    Through the course of the discussion, there was consensus amongst stakeholders that the current planned timelines for developing a detailed market design are very aggressive. While the stakeholders acknowledged that the design timelines are necessarily tight in order to achieve the government objective of a 2026 implementation, they indicated timelines will make it challenging to ensure that full analysis and thorough consultation on critical components of the REM is achieved.

    Of the participating stakeholders that were willing to state a preference at the meeting, the REM alternative had the most support, however many participants were unwilling to commit without further detail or supported the REM structure.

    For those stakeholders who did prefer the REM alternative, a major rationale was that it most closely aligns with the industry structure they elected to invest in, and they see that as a preferable path forward to investor certainty and easier implementation.

    The AESO has shared this feedback with government to inform their policy making.

    The AESO will continue to progress design work and share more information on the engagement and design in June. Please watch this page for more details over the coming weeks.

  • REM Design Sessions

    Purpose

    The AESO hosted a series of engagement sessions with industry stakeholders to advance work on the Restructured Energy Market (REM) Design. Below are the topics covered during each. There was an in-person and virtual component for each.

    Sprint 6 Session Focus
    Monday, November 25 Market Power Mitigation and Reserve Market
    Tuesday, November 26 REM Quantitative Analysis
    Wednesday, November 27 Cost Allocation and Participation
    Thursday, November 28 Reserve Market and Pricing Framework


    Sprint 5 Session Focus
    Tuesday, November 5 Exploring Additional Opportunities
    Wednesday, November 6 Revisiting Priority Topics
    Thursday, November 7 Bringing it all Together Through Examples


    Sprint 4 Session Focus
    Tuesday, October 29 Day-Ahead Market
    Wednesday, October 30 Market Power Mitigation
    Thursday, October 31 Reserves Market
    Friday, November 1 Market Clearing


    Sprint 3 Session Focus
    Tuesday, October 1 Day-Ahead Market
    Wednesday, October 2 Ancillary Services
    Thursday, October 3 Intertie Market Participation and Market Power Mitigation
    Friday, October 4 Market Power Mitigation and Further Analysis


    Sprint 2
    Session Focus
    Tuesday, September 17 Day-Ahead Market
    Wednesday, September 18 Day-Ahead Market (continued)
    Thursday, September 19 Day-Ahead Market Interdependencies and Examples
    Friday, September 20 Shorter Settlement


    Sprint 1 Session Focus
    Tuesday, September 10 Pricing and Reserve Market
    Wednesday, September 11 Market Clearing and Scarcity Pricing
    Thursday, September 12 Market Power Mitigation
    Friday, September 13 Detailed Discussions





  • Background Information

    Since announcements made at IPPSA in March 2024, the industry has had the time to digest the Government of Alberta's Interim Market Power Mitigation and Supply Cushion Regulations, as well as the AESO’s Restructured Energy Market (REM) Recommendation Report. On April 22 and 23, 2024, the AESO brought the Market Pathways Executive Working Group (EWG) back together to:

    • Build deeper understanding of the REM, its rationale, intent, and the potential impacts on Alberta’s energy market and industry;
    • Discuss and begin to identify the key design questions most impactful and important to industry that need to be answered as we move forward with the REM;
    • Understand which elements stakeholders support and which elements stakeholders have concerns with and why; and
    • Review the AESO's high-level timeline and determine how to best engage on the technical market design and rules, in an accelerated timeline in accordance with the direction letter provided by the Minister.

    After the EWG session in April the AESO sought feedback from EWG members and all market participants on the REM Recommendation Report through a survey. The AESO is reviewing survey results which will be shared with the Ministry of Affordability & Utilities in May. Details from the survey results will help to inform the engagement plan moving forward.

Page last updated: 10 Apr 2025, 09:17 AM