Alberta’s weighted average Power Pool Price for April is currently $92.15/MWh, representing a decrease of $1.88/MWh or 2% relative to last week’s settle of $94.03/MWh. Prices averaged over $100/MWh on the 16th and 20th, but this short-lived volatility was offset by the rest of the week’s softer pricing. Demand has continued to decrease slightly by 124MW or 1.4%, which helped suppress prices. Ongoing generator maintenance continues to cause market volatility, which was further impacted by intermittent generator outages at HR Milner, Battle River 4, Battle River 5, Sundance 4 and the Path intertie, which imports electricity from Saskatchewan.
A couple of projects have been announced in the past week, which would help the province continue its pursuit of renewable generation. Amazon announced an 80MW solar panel project in Newell County, east of Calgary, set to begin construction in 2022. Furthermore, Labatt Breweries announced a Power Purchase Agreement (PPA) with Capital Power to purchase electricity from the Enchant solar facility in southern Alberta. This is a step in the right direction, for a market significantly impacted by many of the events in 2020 and forced to delay numerous projects.
The weighted average Hourly Ontario Energy Price (HOEP) is currently at 1.0¢/kWh for the month of April, an increase of 43% or 0.3¢/kWh compared to last week’s settle. Driving this increase in price is the drop in provincial temperature, as wintery weather made its final appearance mid-week, with much of southern Ontario waking up to springtime snow on Wednesday. Demand and supply are both up 2% relative to April average levels (13,891MW and 14,884MW) and, with the recent weather, the grid’s supply mix shifted more heavily toward expensive, dispatchable natural gas (+25%, 361MW). Nuclear, hydro, and biofuel also increased their supply (+2%, 9,091MW; +4% 4,169MW; +45%, 63MW), while wind and solar reduced their supply (-8%, 1,124MW and -23%, 75MW). Currently, with the first Global Adjustment estimated at 6.1¢/kWh and the first estimate recovery rate at 0.8¢/kWh, April’s total market price is 7.9¢/kWh.
In other electricity news, the provincial government has made changes to the Ontario Electricity Rebate (OER). The OER is available to eligible farms, long-term care homes, and small businesses and is automatically applied to customers’ pre-tax subtotal. The percentage discount has been reduced from 21.2% (effective January 1, 2021) to 18.9% effective May 21, 2021 in order to reflect changes in electricity costs. Also, the grandfathering period has been extended from April 30th, 2021 to October 31st, 2022 in light of the continued impacts of the pandemic. Eligible grandfathered customers must have been receiving the 8% rebate as of October 22, 2019 and have notified their electricity vendor before February 1, 2021.
Additionally, as a reminder for large commercial or industrial clients, the start of the next Class A base period starts May 1, 2021. This means that your contribution to the Top 5 coincident peaks over the May 1, 2021 to April 30, 2022 period will determine your Peak Demand Factor (PDF) and Global Adjustment (GA) charges during the adjustment period of July 2022 through June 2023. The current freeze to Class A clients’ PDF determines end user costs over the July 1, 2020 to June 30, 2022 period. We will send day-of notifications when our forecasting models show that provincial demand is expected to become a Top 5 peak for this upcoming base period.
– Mark Ljuckanov, Energy Advisor / Ryan Cosgrove, Energy Data Analyst / Sarah Clemente, Energy Data Analyst