Alberta’s weighted average Power Pool price for June is currently $177.90/MWh. In contrast to May’s month-end pricing of $86.83/MWh, this is an increase of $91.07/MWh or 104.9%. The dramatic increase in pricing is attributed to extreme volatility experienced in earlier parts of the month, where daily pricing settled at $427.97/MWh and $487.45/MWh for June 1st and 2nd respectively. Weather was the prime driver of this volatility, as heat warnings were in effect for the province until June 3rd. Typically, when the province experiences heat warnings we see an increase in demand because of cooling requirements, which is evidenced by the 8 peak hourly demands occurring this month between June 2nd and 4th, with a high of 10,626MW. In contrast, the highest hourly demand experienced in May was only 9,894MW. Further exacerbating the issue was several intermittent generator outages, combined with interties of Path 1 and Path 83, limiting the import of electricity into the province. Over the past 9 days, we have experienced outages at Genesee 1, Sheerness 1 & 2, Sundance 4 & 6, as well as Battle River 4 & 5. As of today, the interties have come back online and only Sundance 6 and Battle River 4 remain offline.
The weighted average Hourly Ontario Energy Price (HOEP) is at 2.8¢/kWh for the month of June, an increase of 112% or 1.8¢/kWh compared to last week’s settle. Driving this increase in price is a shift in the supply mix toward natural gas, to meet peak demand as Southern Ontario experienced its first heat warning of the summer season. While demand and supply have both increased 3% compared to average June levels (16,026MW and 17,075MW, respectively), natural gas has increased its supply by 18% (2,253MW). Nuclear and hydro have maintained steady supply (10,037MW and 3,569MW), while biofuel has increased its supply (+14%, 55MW) and solar has decreased its supply (-1%, 120MW). With the first Global Adjustment estimated at 10.8¢/kWh and the first estimate recovery rate at 0.6¢/kWh, June’s total market price is 14.2¢/kWh.
In other electricity news, the Ministry of Energy, Northern Development and Mines (ENDM) is considering proposing amendments to the Ontario Electricity Rebate (OER). Currently, eligible accounts include low-volume consumers (annual usage of 250,000kWh or less, or demand of 50kW or less), registered farms, licensed long-term care homes, and certain multi-unit complexes. ENDM is considering revising eligibility requirements, especially for consumers who were grandfathered into the OER. Proposed amendments to eligible accounts include common areas of multi-unit complexes that are individually metered and have annual consumption more than 250,000kWh or demand greater than 50kW, mobile home parks, and other multi-unit residential complexes that aren’t currently eligible.
– Mark Ljuckanov, Energy Advisor / Ryan Cosgrove, Energy Data Analyst / Sarah Clemente, Energy Data Analyst
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