BACKSTOPPING RISKS RELATED TO POWER PURCHASE ARRANGEMENTS ON BEHALF OF ALBERTA CONSUMERS

The Balancing Pool was created by the Government of Alberta to manage certain assets, liabilities, revenues and expenses arising from the transition to competition in Alberta’s electric industry. The Balancing Pool was originally established in 1998 as a separate financial account of the Power Pool Council and commenced operations in 1999. The Power Pool Council was a statutory corporation established under the Electric Utilities Act of Alberta (1995). The requirement to establish the Balancing Pool and its’ associated mandate was set out in the Balancing Pool Regulation.

With the proclamation of the Electric Utilities Act on June 1, 2003, the Balancing Pool was established as a separate statutory corporation. The assets and liabilities of the Power Pool Council that related to the duties, responsibilities and powers of the Balancing Pool were transferred to the Balancing Pool.

The Balancing Pool’s mandate can be briefly described as follows:

  • Managing the financial accounts arising from the transition to a competitive generation market on behalf of electricity consumers; and
  • Meeting obligations and responsibilities relating to Power Purchase Arrangements (PPAs) as defined in Section 1(1)(nn) of the Electric Utilities Act.
Our Legislated Duties

The Balancing Pool supports a fair, efficient and openly competitive electricity market in Alberta by performing the legislated duties and responsibilities set out in its mandate, including managing the risks and maximizing the value of certain generating assets held on behalf of Alberta’s electricity consumers.

The Balancing Pool’s legislated duties include the following:

  • Act as a buyer for the PPAs that were not sold in the public auction held by the Government of Alberta in 2000 or that have subsequently been terminated by third party buyers and manage the resulting electricity portfolio and/or where feasible terminate the PPAs with the Owners;
  • To manage generation assets in a commercial manner, specifically any Power Purchase Arrangements (PPAs) held by the Balancing Pool that include the right to exchange electric energy and ancillary services, and any arrangements or agreements derived from these assets;
  • Act as a risk backstop in relation to extraordinary events such as force majeure in relation to the PPAs;
  • Allocate (or collect) any forecasted cash surplus (or deficit) to (from) electricity consumers in Alberta in annual amounts over the life of the Balancing Pool;
  • Hold the Hydro Power Purchase Arrangement (“Hydro PPA”) and manage the associated stream of receipts or payments;
  • Participate in regulatory and dispute resolution processes.

The following statutes establish and govern the Balancing Pool and its mandate and duties:

 

Mandate & Roles

The Balancing Pool’s Mandate and Roles Document was developed collaboratively between the Minister of Energy and the Balancing Pool. It is intended to satisfy the requirements of the Alberta Public Agencies Governance Act (APAGA) and reflects a common understanding of the authority, respective roles and responsibilities of the parties.