Alberta’s weighted average Power Pool Price for October is currently $153.64/MWh. Relative to last week’s price of $181.28/MWh, this is a decrease of $27.64/MWh or 15.2%. Market volatility has been minimal over the past week, with a 7-day average price of $76.70/MWh. The past 5 days settled at less than $85/MWh, with a low of $36.57/MWh experienced on October 24th. Increased wind generation has been the primary reason for this price relief; we’re seeing consistent wind generation, averaging 40-50% of maximum capacity, which means the grid is less reliant on expensive natural gas generation. In addition, continued imports from BC and Montana have further curbed volatility in the market. Outages at Battler River 4 and Sheerness continue, but have not had an adverse effect on pricing over the past few days.

The weighted average Hourly Ontario Energy Price (HOEP) is settling at 4.4¢/kWh so far for the month of October, representing a 0.5¢/kWh or 11.4% decrease over last week’s settle. The primary driver of this price decline is the decrease in demand across the province, causing the grid’s need for demand response to diminish. Natural gas-burning supply decreased by 8.7% (1417MW) over the course of this past week. Baseload generation, such as nuclear, also fell this past week, decreasing its output to an average of 6783MW, a 46.24MW or 0.7% decrease compared to last week. Hydro-based generation, on the other hand, increased output, climbing 0.7% to an average of 4039MW. Wind, solar, and biofuel increased week-over-week output (+10.8%; 1999MW, +3.1%; 78MW, +271.3%; 4MW, respectively). With the first Global Adjustment (GA) estimated at 0.5¢/kWh, October’s total market price is settling at an eight-and-a-half-year low of 4.9¢/kWh as of today!

For regulated rate customers, the overall price of electricity is expected to come down by about 0.4¢/kWh for the next year. The Ontario Energy Board (OEB) has published the new rates for the Regulated Price Plan (RPP), effective November 1st, 2022. Time-of-Use (TOU) and Tiered RPP prices have decreased from the prices set last year, with a weighted average price of 9.3¢/kWh, down from 10.4¢/kWh previously. TOU Off-Peak, Mid-Peak and On-Peak prices will be 7.4¢/kWh, 10.2¢/kWh and 15.1¢/kWh, respectively, while Tier 1 and Tier 2 prices will be 8.7¢/kWh and 10.3¢/kWh, respectively. The Ontario Electricity Rebate (OER) has also been lowered to 11.7% from 17%. To put that in perspective, the previous price point, including the OER, was 8.9¢/kWh, and that value is now 8.5¢/kWh.

For electricity consumers not on regulated rates, the price reports and wholesale market price forecasts published every October by the OEB shed light on what their expectations for the weighted average HOEP and GA over the 12 months will be, and they are 5.833¢/kWh and 3.904¢/kWh, respectively. On-Peak (non-holiday weekdays from 7 a.m. to 11 p.m.) HOEP is expected to average 6.453¢/kWh, while Off-Peak HOEP should come in at 4.619¢/kWh. If these numbers materialize, it will result in a 0.3¢/kWh reduction in electricity commodity costs, year-over-year, beginning November 1st, 2022.

– Mark Ljuckanov, Energy Advisor / Clara Birch, Energy Data Analyst / Grace Wilton, Senior Energy Advisor

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