IPPSA Intelligence

Alberta Electric System Operator (AESO)

The latest AESO Stakeholder Newsletter highlights critical updates and engagement opportunities within Alberta's electricity market. Key initiatives include the Optimal Transmission Planning (OTP) and the Restructured Energy Market (REM), emphasizing the AESO’s commitment to transparency and stakeholder involvement. Notable deadlines for feedback on the OTP Framework, registration for sessions, and proposals regarding Transmission Reinforcement Payment (TRP) are detailed, reflecting a structured approach to stakeholder engagement. AESO's recent 2024 Annual Report showcases progress in enhancing market reliability and governance. Ongoing projects, such as the Kaybob South 3 Cogeneration Project Connection, indicate AESO's focus on improving connectivity and supporting Indigenous projects. The newly introduced Distributed Energy Resources Primary Frequency Response Guideline aims to bolster system reliability, particularly with the integration of distributed energy resources. Overall, AESO’s proactive measures highlight the importance of stakeholder participation and adaptability in regulatory practices, ensuring the electricity system becomes more reliable and inclusive as it evolves.

References:

1. AESO Stakeholder Newsletter: Key Updates and Engagement Opportunities for Alberta's Electricity Market

CER Legal Challenge

Alberta's government is challenging the federal clean electricity regulations aimed at decarbonizing electricity grids by 2050, citing concerns about jurisdiction and potential economic impact. Premier Danielle Smith announced the legal action, arguing that these regulations could lead to more than a 30% increase in electricity costs and jeopardize reliability in Alberta's power supply, which heavily depends on natural gas. The province's response reflects a broader tension between provincial autonomy and federal environmental policy. Critics, including Alberta NDP Leader Naheed Nenshi, advocate for cooperation instead of confrontation, while some experts suggest that a transition to renewable energy could enhance investment and competitiveness. The outcome of this legal challenge could establish a significant precedent regarding provincial rights in energy management and the enforcement of clean energy regulations in Canada.

References:

1. Alberta's Legal Battle Against Federal Clean Electricity Regulations: A Clash of Jurisdiction and Energy Policies

Saskatchewan Intertie Update

The operational status and repair updates for the McNeill converter station, part of the Alberta-Saskatchewan intertie, highlight critical safety and reliability measures amid infrastructure challenges. ATCO Electric has confirmed a component failure at the facility, recommending that the converter station remain inactive for energy flow until repairs are complete. This decision results in a zero transfer capability for the intertie, stressing the importance of operational safety. The projected repair timeline anticipates a return to normal operations by December 23, 2025, though this may be subject to modifications based on progress. The operational constraints underscore the complexities inherent in maintaining energy infrastructure, demonstrating the need for ongoing vigilance to ensure dependable electricity supply. Stakeholders must adapt to the operational limitations imposed during this repair phase, emphasizing the interplay between infrastructure management and market dynamics.

References:

1. Operational Update: McNeill Converter Station Repairs and Energy Flow Recommendations

Federal Energy Related Policies

Prime Minister Mark Carney's government, following the 2025 federal election, has laid out ambitious energy-related policies aimed at improving Canada's energy infrastructure and engaging Indigenous communities. Key initiatives include a $5 billion investment in infrastructure through a Trade Diversification Corridor Fund, aimed at facilitating trade diversification and the establishment of an East-West electricity grid.

Regulatory reforms seek to create a "One Window" approval process for large projects, promoting quicker and more efficient project development. Carney also plans to tighten carbon pricing through the Output-Based Pricing System and to implement a consumer carbon credit market tied to OBPS, transitioning from a tax-based approach to incentives for greener consumption. Engagement with Indigenous communities will be fostered through an expanded Indigenous Loan Guarantee Program and support for cooperative projects. Workforce development is another focus, with financial support for skilled trade apprentices and enhanced training opportunities.

References:

1. Mark Carney's Vision for Canada: A Sustainable Energy Future Through Infrastructure, Indigenous Engagement, and Innovative Policies

Capital Power Quarterly Results

Capital Power Corporation is proactively advancing its energy initiatives through strategic acquisitions and renewable energy projects. The recent acquisition of two natural gas-fired power generation facilities, Hummel Station and Rolling Hills, for approximately $3 billion, enhances its generation capacity by about 2.2 GW. This decision signifies a diversification strategy aimed at flexibility in energy generation while meeting market demands. In addition, the construction of the Hornet Solar project in North Carolina marks a significant investment in renewable energy, reflecting the company's commitment to reducing reliance on fossil fuels. Financially, Capital Power reported a healthy adjusted funds from operations (AFFO) of $218 million and a net income of $150 million for the first quarter of 2025, despite a slight decline in electricity generation year-over-year. The company’s long-term strategy emphasizes the importance of geographic diversification and stable cash flows, positioning natural gas-fired assets as critical for reliability and growth across various market conditions.

References:

1. Capital Power Corporation: Strategic Shift Towards Clean Energy with Natural Gas and Solar Investments

Indigenous Electricity Ownership

The First Nations Major Projects Coalition (FNMPC), offers a comprehensive examination of the growing movement toward Indigenous ownership and operation of electrical utilities across Canada. It draws on insights from Indigenous-owned utilities and experts to explore motivations for forming such utilities, various operational models, and the challenges faced in this endeavor. The report highlights how Indigenous utilities can serve as vehicles for self-determination, economic development, and environmental stewardship, aligning with broader goals of reconciliation and sustainable energy transition. Key challenges identified include regulatory barriers, limited access to capital, and the need for capacity building within Indigenous communities. The report underscores the importance of supportive policies and frameworks that facilitate Indigenous participation in the energy sector, such as loan guarantees and equitable access to energy markets. By addressing these challenges, the report advocates for a more inclusive energy landscape where Indigenous nations are not only stakeholders but also leaders in the development and management of energy resources. Overall, the report serves as both a diagnostic tool and a call to action, emphasizing the critical role of Indigenous utilities in Canada's path toward a net-zero future. It encourages collaboration among governments, industry, and Indigenous communities to create an energy system that is equitable, sustainable, and reflective of Indigenous rights and values.

References:

1. Indigenous Utilities: The Building of Indigenous-Owned Electrical Utilities in Canada

City of Medicine Hat

The recent approval of the Medicine Hat Southwest Substation (MHS-11) by the Alberta Utilities Commission (AUC) marks a significant advancement in addressing the city's growing electricity demands. The decision, made on April 25, 2025, allows for the construction of a strategically placed substation in the southeast area, initiated through community engagement and expert consulting. Development planning began in 2019 and faced initial setbacks with an application rejected in June 2023. After substantial revisions and community feedback, a new application was approved in December 2024. The approval is significant for the local electric grid, with construction projected to begin in spring 2026 and completion expected by early 2027.

References:

1. Medicine Hat Marks Milestone with Approval of Southwest Substation to Meet Growing Electricity Demands

AESO 2024 Annual Report Released

The AESO 2024 Annual Report highlights a transformative year marked by significant progress in Alberta's energy transition and market modernization efforts. Under the leadership of new President and CEO Aaron Engen, the AESO oversaw the early retirement of coal-fired generation and a substantial increase in renewable energy integration, which introduced new complexities in grid and market operations. Recognizing the need for modernization, the AESO collaborated with industry stakeholders to develop a detailed market design for the Restructured Energy Market, aiming to finalize it in 2025. This initiative seeks to enhance grid reliability and efficiency while providing appropriate investment signals. To address the challenges posed by increased reliance on intermittent renewable sources and extreme weather events, the AESO implemented several measures to bolster system stability. These included new system strength modelling and technical requirements, the implementation of supply cushion regulation and secondary offer cap regulations, and the procurement of Islanded Fast Frequency Response (FFR) services to respond to real-time supply loss events. Additionally, the AESO increased regulating reserves and initiated a Fast Regulating Reserves pilot project, with plans to move into procurement in 2025. These efforts underscore the AESO's commitment to maintaining a reliable electricity system amidst evolving energy dynamics.

References:

1. 2024 AESO Annual Report

TC Energy Reports Quarterly Results

TC Energy Corporation has reported solid first-quarter 2025 results, emphasizing its commitment to growth in natural gas and nuclear power as part of the transition to a low-carbon economy. The company recorded net income of CAD 1.0 billion and steady comparable EBITDA of CAD 2.7 billion, with a guidance of CAD 10.7 to CAD 10.9 billion for 2025. Major projects include the USD 0.9 billion Northwoods Project for natural gas in the U.S. Midwest and a CAD 1.1 billion investment in Bruce Power's Unit 5 replacement to ensure reliable nuclear power. Increased demand for natural gas is highlighted through growing transportation volumes across pipelines in North America, reaffirming TC Energy's role in promoting cleaner energy solutions and enhancing infrastructure in response to future energy needs.

References:

1. TC Energy's Strategic Commitment to Clean Energy: Q1 2025 Financial Results and Future Growth Initiatives

Maxim Power Divestment

Maxim Power Corp. has divested its coal assets by selling Summit Coal Limited Partnership and Summit Coal Inc. to Valory Resources Inc. for CAD 14.2 million. This significant transaction represents Maxim Power's strategic transition towards clean energy, aligning with growing trends favoring sustainability. The sale involved a mix of cash (CAD 10.2 million) and a 15% convertible note (CAD 4.0 million), allowing Valory to potentially convert the note into equity under certain conditions. Despite exiting coal ownership, Maxim will maintain a 3% royalty from coal extraction and has also secured a ground lease for possible coal processing operations, indicating a balanced approach between past coal activities and future renewable energy initiatives. This move is expected to position Maxim Power favorably within the evolving energy landscape, reflecting compliance with environmental standards and a commitment to sustainability.

References:

1. Maxim Power Corp. Divests Coal Assets to Focus on Clean Energy: Key Insights from the Sale to Valory Resources Inc.

Bennett Jones Podcast on the ITC

Canada's Clean Electricity Investment Tax Credit (ITC) is a strategic initiative designed to stimulate investment in clean power generation. The ITC provides a 15% refundable tax credit on capital costs for various clean electricity technologies, including solar, wind, and nuclear power. Its implementation presents challenges due to complex eligibility criteria and regulatory requirements, particularly in regions like Alberta with distinct market structures. Indigenous participation is highlighted as a critical component, necessitating careful partnership structures to maximize benefits. Political dynamics, especially shifts in governmental policy, could significantly impact investor confidence and energy sector stability, stressing the importance of coherent regulatory frameworks for the clean energy transition.

References:

1. Navigating Canada's Clean Electricity Investment Tax Credit: Boosting Renewable Energy and Indigenous Participation in a Complex Regulatory Landscape

NERC Study Release

The North American Electric Reliability Corporation (NERC) has released its 2025 Canadian Analysis as part of the Interregional Transfer Capability Study (ITCS), offering a comprehensive evaluation of electricity transfer capabilities between Canadian provinces and from the United States into Canada. This study is particularly pertinent given the increasing frequency of extreme weather events and the evolving energy landscape. It aims to assess the reliability benefits of enhancing cross-border and cross-provincial transmission interfaces. The analysis reveals that Canadian systems are becoming more vulnerable to extreme weather and transmission limitations, identifying potential energy inadequacy in all of the 12 weather years studied 

The study underscores the importance of a robust and flexible transmission system capable of coping with a wide variety of system conditions. It highlights that enhancing transmission interfaces could reduce the likelihood of energy deficits during extreme conditions citeturn0search1. The analysis also notes that observed transfer capability is generally higher between Canada and the United States but relatively lower between provinces. This indicates a need for targeted improvements to transmission infrastructure to further leverage Canada’s significant generation resources in support of reliability and resilience across the North American bulk power system. The findings serve as a foundational step for further discussions and inform potential future regulatory actions aimed at strengthening grid reliability.

References:

1. Interregional Transfer Capability Study Canadian Analysis

Offshore Wind Troubles

Equinor faces potential losses estimated in the billions following a decision by the U.S. government to halt its Empire Wind offshore project near New York. This unexpected stoppage raises alarm for the offshore wind industry in the U.S., calling into question the stability of investments in renewable energy amid shifting governmental policies. Equinor's CEO indicated that the company's investments were made with prior governmental approvals, signalling a concern on regulatory confidence. The situation not only threatens Equinor's financial security but may also deter future investments in the U.S. offshore wind sector, jeopardizing its expected output of renewable energy for hundreds of thousands of homes.

References:

1. Equinor Faces Billions in Losses as U.S. Government Halts Empire Wind Project: Implications for Offshore Wind Industry

IPPSA's Mandate

IPPSA's mission is to convene industry, providing information, resources, and a forum for knowledge sharing, and to create opportunities for dialogue, collaboration, and education. This newsletter is meant to inform members but not advocate for specific outcomes. We always appreciate your feedback at info@ippsa.com.