Economist, Pembina Institute lend support to reversing energy system overhaul

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A Calgary economist says the current Alberta government likely made the right decision to cancel big changes to the province’s electricity system.

The former NDP government had proposed an overhaul of the power market to help avoid big price swings for consumers, while ensuring there’s enough power to meet the province’s needs.

The Alberta government announced it was dumping the changes, saying the status quo is more affordable and easier to understand.

Economist Kent Fellows with Calgary-based The School of Public Policy says the current energy-only market may turn out to be the best way to address the same problems the NDP was trying to fix.

He agrees the changes were complicated.

“That doesn’t necessarily make it bad, but more complicated means that there are a lot more details you have to get right,” Fellows told CBC News Thursday.

“The energy-only market, we’ve been doing it for a while, we know how it works and so it may be easier to tweak that market if we are concerned that we are not going to get investment, rather than introducing this whole other side market.”

He says he expects the UCP government will take a serious look at potential adjustments to the current system, including a possible increase to the cap on wholesale prices, which are separate from what consumers pay.

‘Better option’

The Pembina Institute says it agrees with the government’s decision.

Sara Hastings-Simon says it was the right move because she believes the current system can address the problems the NDP was trying to fix, but the current system needs some changes.

“There are still some questions about what this government will do and if they will make those changes,” Hastings-Simon said.

“But I think it’s the better option when we look at wanting to get to a future of reliable, low-cost, low-carbon electricity.”

The NDP had made the changes in 2016 with a transition date set for 2021 based on advice from the Alberta Electric System Operator, the not-for-profit that runs Alberta’s grid.

The Opposition’s energy critic slammed the move Wednesday, questioning the government’s motives.

“If the energy minister won’t release information about who was consulted and what information they’re using to make this decision, we can only speculate as to what their motives are here,” Irfan Sabir said in a release.

“It certainly isn’t affordability for Albertans.”

Source: CBC