A local MLA wants to further modernize Alberta’s electricity system with new legislation which would benefit both the electricity industry, and consumers.
On Nov. 17 Dale Nally, associate minister of natural gas and electricity, introduced Bill 86, the Electricity Statutes and Amendment Act, in the Alberta legislature.
If passed, the bill would see initiatives in three key areas: energy storage, self-supply with export, and distribution policy. The act could also potentially bring down wire costs in the province for consumers, and encourage more competition and choice in the marketplace, said Nally.
The initiatives would bring clarity for the electricity industry to the rules of self-supply, with export in producing electricity, as well as clarity surrounding the rules of energy storage, both of which are not currently allowed without exemptions.
“Right now, self-supply and export is not allowed in our marketplaces. There are four exemptions to that — industrial system designation facilities; municipalities for their own use; micro-generation; and then also flare gas. It’s very restricted,” said Nally.
Self-supply and export allow a company to generate electricity and then sell or draw from the grid. The amendments would allow for unlimited self-supply and export.
The energy-storage amendments, according to the Nov. 17 press statement, introduce new definitions for both energy-storage resource and energy-storage facility, and for setting the stage for their approvals.
Currently, Alberta has 15 energy-storage projects in various stages of approval by the Alberta Utilities Commission (AUC), which regulates some of Alberta’s electric utilities, said Nally.
“The AUC has indicated to us that rather than doing one-off approvals, they would like us to provide some clarity, some certainty that includes a definition on what energy storage is, and then the framework that's going to allow them to approve those projects,” he said.
Nally believes energy storage will do some important things for the province, including helping to deal with the intermittency of renewable energy.
The bill would also update the distribution policy, which would allow for the integration of new technologies.
“This legislation is about modernizing the legislative framework so that we can embrace new technologies that didn't exist when this legislation was last updated,” said Nally.
These changes would address residential solar, battery storage, and electric vehicle charging.
“This will provide investor certainty and clarity to the marketplace, to consumers, and to the regulator because there's a number of spaces in the marketplace [where] the regulation that's in place and the legislation that’s in place does not address new technologies that have come about,” he said in response to a reporter’s question about preparing the marketplace for new technologies.
Nally said distribution changes will come through regulatory amendments that will be made soon.
The amendments build on the AUC Distribution System Inquiry, which was released in February 2021. The AUC inquiry, as stated on their website, “examined the need to modernize the province’s distribution system to realize benefits from advancing technology.”
With the amendments, distribution owners will be required to prepare plans for the long term “as per future regulations, which will describe the outcomes and timing of the plans,” said the Nov. 17 press release.
Benefits to Albertans
Consumers would also benefit. Bill 86 would be useful to consumers for two reasons, said Nally.
The first reason is it could potentially bring down the wire costs in the province, “Because batteries provide a great opportunity for non-wire solutions, which in some cases can be cheaper than wire alternatives,” he said.
The second reason, Nally said, is the new legislation could encourage more competition and choice in the marketplace, which could bring down the cost of electricity in Alberta.
“We know that that is the best path forward for lower prices because it will allow consumers to participate in arbitrage in the marketplace. Businesses could be using energy stored to purchase cheap electricity at night and sell it back into the marketplace during the day,” he said.
Nally said industry has said this is what they want.
“There are investors that are on the sidelines. They’re in the province. They're kicking the tires. They want to invest in Alberta, but they need clarity on self-supply and export.”
If the bill passes, the amendments could be finalized in 2022.