Replying in the quote below
Quote:
Originally Posted by DoubleK
Nor do you sir.
I have enough experience in the industry in Alberta to know what I'm talking about.
To suggest that their is no relationship between the NDPs handling of the electricity file and anything that happened since then is completely divorced from reality.
I didn't say that. I admitted that the NDP made a mistake with having to take on the PPA's, and the price of that, as you so helpfully mentioned was $1.10/MWh. Explain to me how that is the reason we saw power price electricity prices > $150/MWh for the second half of last year?
The shift from coal to gas fundamentally changed the operating parameters of the coal gen units. Most people call this base load.
The elimination of PPAs fundamentally changed both the operating and economic parameters of those same units. This removed their obligation to fullfil the PPA, affording them the ability to arbitrage leading to economic witholding.
100% true, but that has nothing to do with dissolving the balancing pool which is where this all started. And yes, the fact that the operators of those plants are able to do that is because they are no longer subject to the PPAs, that's on the NDP.
But you know what could have limited this practice? A capacity market. The fact that we have an energy only market is the reason operators can do this. It's the fixed vs variable rate mortgage argument. Your variable rate looks good until interest rates go up. Your energy only market looks good until operators realize they can sit back in the cut and bid in at $999.99 because we are fundamentally undersupplied because we live in a market that doesn't incentivize reliability. This is how an energy market works, you need to give generators an incentive to build to match demand. No one is going to do that when we are oversupplied and prices are low, so new generation is only attractive when price spikes are normal.
This fact in combination with the previous point is what has led to higher prices. You can't say that the PPAs were allowed to expire when they weren't. That's not what happened.
Of Couse that's what happened. The PPAs in question for the most part have reached the end of that life span. Whether they're owned by Enmax or the Government of Alberta, they were going to expire at the same time no matter what.
The raison d'etre for the Balancing Pool was to absorb the PPAs in the event of default. Suggesting that the BP was required in a market without PPAs is false? What would they do?! Elimination of the PPAs necessitated the elimination of the BP. They serve no purpose in the current iteration of the Alberta market.
The balancing pool existed long before the Government had to take over those PPAs. The PPAs didn't go away when the NDP made the changes, the Government became responsible for them, they still existed, the BP was still needed. Now that they are coming off the books, yeah, the BP isn't needed if the PPAs don't exist, that's independent of who owns them. Saying that the NDP dissolved the balancing pool (which you did), and that's why electricty prices spiked (which, again, you did) is just fundamentally wrong.
Capacity market v Energy only market conversation is a red herring, clean electricity system by 2035 wasn't a thing in 2016.
You're the one who brought up the Capacity market. Hell you mentioned the NDP "Going that way" as a reason why electricity prices have spiked. So yeah, if it's a red herring it's one you brought up, and mischaracterized. And what does a clean system by 2035 have to do with anything?
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There are a lot of reasons electricity prices are high right now.
Saying "Prices only spiked when the NDP dissolved the balancing pool" is either totally wrong, or completely dishonest.
Buying out the PPA's accounts for a pretty small % of your bill, so that's not why prices have spiked.
Heck I'll give you that not being beholden to the PPA's is the reason coal operators could operate the way the are, hence price spikes. But with PPAs expiring, and most of the plants being economically challenged due to federal carbon taxes, the conditions for them to act that way would have existed on about the same timelines we are seeing, hence the same result.
And "was moving towards a capacity market" is by your own admission a red herring.
So what was your point, because the 3 things you cited don't hold up.