Under provisions set out in the Electric Utilities Act, the Balancing Pool has an obligation to ensure that any net amount in the Balancing Pool accounts that is greater or less than $0 is included in the Alberta Electric System Operator’s (AESO) Tariff. Therefore, each year the Balancing Pool is required to forecast its revenues and expenses to determine any excess or shortfall of funds. Based on this forecast, the Balancing Pool determines an annualized amount that will be paid or “allocated” to electricity consumers (in the case of an excess of funds) or collected from or “charged” to electricity consumers (in the case of a shortfall of funds) over the year in accordance with the Balancing Pool Regulation.
This amount is referred to as the Consumer Allocation/Charge and applies to all market participants who receive system access service from the AESO in accordance with Rider F of the AESO’s Tariff. The Allocation/Charge is based on the amount of electric energy consumed annually. As such, approximately 80% of the annual allocation goes to commercial and industrial electricity consumers, with the remainder to the residential and farm sector. Residential consumers can determine the Allocation/Charge applicable to them by looking for the ‘Balancing Pool Allocation’ applied to their monthly electricity bill.