IPPSA Intelligence

AESO

Alberta’s electricity landscape is being reshaped by coordinated policy directives and market reforms. A government direction on intertie policy and MATL restoration is guiding ancillary service arrangements while the AESO’s 2026 budget process invites stakeholder questions and engagement ahead of late-October Q&A sessions.

Market mechanisms are evolving, with Fast Frequency Response Plus feedback published and Market Supply Cushion reporting expanded to highlight larger capacity buffers.

In the grid sector, incumbency transition payments and generating unit owner contributions will be allocated or refunded based on declarations by early December, influencing project economics for late-stage connection proponents. Transmission planning continues via virtual Optimal Transmission Planning discussions and an abbreviated needs approval review for the Big Rock Solar Battery project.

Tariff and market rule redesigns remain active: detailed REM ISO rules feedback is due October 20 and hybrid technical sessions on dispatch variance and opportunity cost for market power mitigation are scheduled in early November. Mid-November reports on internal demand rates and cost-of-service studies will inform future rate structures.

These developments carry implications for asset owners, generators, developers and ratepayers, affecting cost allocations, participation requirements for storage and hydro, and investment decisions as stakeholders navigate tight deadlines and seek to influence regulatory outcomes.

References:

McNeill Intertie Returns to Testing After Outage

Resuming testing on October 15, 2025, the McNeill converter station is set to restore the Saskatchewan–Alberta electrical intertie after nearly year-long inactivity, heralding seamless, renewed power exchanges between the two provinces. Unique in its design, this link converts direct current into alternating current to reconcile differing grid frequencies, making its restoration critical. Reestablishing the link will bolster grid security by enabling load balancing across jurisdictions and mitigating local supply shortages.

It will also allow Saskatchewan to tap into Alberta’s evolving energy mix, which includes rising renewables and grid flexibility programs. As energy systems grow more decentralized and variable renewable penetration increases, operational interties like McNeill will play a pivotal role in optimizing regional grids and supporting resilient, cost-effective electricity markets.

References:

Capital Power Q2 2025 Earnings Call

Capital Power’s Q2 2025 update shows a company executing a diversification and M&A-led growth strategy while managing market volatility and regulatory uncertainty. Adjusted EBITDA held at $322 million, AFFO rose to $235 million, and 2025 guidance was raised to $1.5–1.65 billion EBITDA and $950 million–$1.1 billion AFFO following a 2.2 GW acquisition and Goreway/Genesee upgrades.

The firm now operates >10 GW of flexible generation and ~12 GW total across North America, reducing Alberta concentration. Genesee repowering lowered heat rates and carbon intensity, enabling data‑centre site optionality and potential gigawatt‑scale PPA monetization, though ASO phase-two timing, REM design and federal CER rules constrain build timelines. Capital deployment is enabled by a $1.2 billion US private debt raise, a BBB‑rating, expected >$1 billion discretionary cash into 2026, and the ability to fund ~$2 billion of growth without equity.

References:

TransAlta Q2 2025: Hydro Boost, Alberta Data‑Center Plans and Centralia Unit 2 Conversion Fuel Low‑Carbon Transition by Investing.com

TransAlta reported strong Q2 2025 results, with adjusted EBITDA of $349 million (up 10.4% year‑over‑year), free cash flow of $177 million ($0.60/share) and fleet availability of 91.6%, sending the stock up about 7.7% to $23.49. Hydro drove performance—hydro EBITDA reached $126 million, up $43 million—while wind and solar remained stable at $89 million, gas fell to $128 million (down $14 million) and the energy‑transition segment rose to $19 million from $2 million. The Alberta merchant portfolio continued to outperform spot prices and hedging provides upside into 2025–26.

Strategic priorities include an Alberta data‑center opportunity advancing toward an MOU after AESO Phase I large‑load allocation, with commercial contracts targeted by Fall 2025, and the Centralia Unit 2 conversion moving toward a definitive agreement in H2 2025 aiming to secure a long‑term contract for 100% of capacity. Management reaffirmed 2025 guidance (adjusted EBITDA $1.15–1.25 billion; free cash flow $450–550 million) and a fleet availability target near 91.8%, plus a commitment to cut CO2 by 75% from 2015 by 2026.

References:

Alberta mandate letters (Oct. 16, 2025): fiscal restraint, affordable reliable electricity, AI data‑centre push and red‑tape cuts — Heritage Fund $35B by 2027 by Government of Alberta

Alberta’s new ministerial mandate letters set a tightly focused agenda around fiscal restraint, energy reliability, technology investment and regulatory simplification. Targets include capping non‑emergency spending growth below inflation-plus-population, growing the Alberta Heritage Savings Trust Fund to at least $35 billion by 2027 and preserving the lowest net‑debt‑to‑GDP ratio in Canada. 

Energy priorities stress opposing the federal Clean Electricity Regulation while planning for reliable base‑load alternatives (including a nuclear roadmap), implementing a Restructured Energy Market, addressing regional rate disparities and fast‑tracking AI data centres that bring their own power. Technology aims to attract AI investment, create an IP strategy allowing provincial ownership stakes in publicly supported innovations, expand broadband and launch a provincial digital strategy emphasizing security and privacy.

References:

Alberta Minister Neudorf Visits Montana to Strengthen Cross‑Border Power Ties and Promote Alberta’s Electricity Market

Alberta’s Minister of Affordability and Utilities, Nathan Neudorf, visited Montana (Oct 14–17, 2025) to deepen cross‑border energy collaboration, advance interconnection projects such as the Montana‑Alberta Tie Line, and promote Alberta’s competitive electricity market. The mission includes meetings with Montana’s governor’s office, the Energy Task Force chair, DEQ energy leadership, public service commissioners, and utility executives, plus attendance at the Big Sky, Bright Future Economic Summit in Bozeman.

Objectives emphasize enhancing grid reliability, securing affordable supply to meet rising demand, and attracting investment by showcasing Alberta’s business‑friendly regulatory environment. For policymakers, utilities, investors and residents the trip signals Alberta’s proactive pursuit of cross‑jurisdictional solutions to energy security and affordability while leveraging forums like the Big Sky summit to build industry partnerships. It also signals openness to private investment, regulatory coordination, and technology exchange globally.

References:

$100M Municipal Solar Proposal Splits Medicine Hat Over Finances, Regulation

Medicine Hat’s Saamis Solar Park proposal has become a flashpoint in local politics and municipal finance as the city weighs a large-scale move from gas-fired generation to utility-scale solar. The full plan would reach about 325 MW on roughly 650 hectares of former industrial land (including a capped tailings pond); council is funding design work for a 75 MW first phase and paid $7 million to buy the developer’s proposal.

The project is pitched to reduce operating costs, cut TIER carbon charges and extend the life of utility assets, potentially generating roughly $7 million annually in carbon-related credits. But municipal energy revenues are volatile—$134 million profit in 2023 versus $12 million in the latest year—and some residents want the $78 million transition fund used to stabilize rates instead. Provincial-market redesigns, grid-fee changes and Alberta’s legal challenge to federal clean electricity rules create regulatory uncertainty that clouds long-term revenue forecasts. Political opinions are sharply divided ahead of an October election and a possible council vote this winter, with an organized ratepayer opposition arguing taxpayer risk.

References:

Court Dismisses Climate Lawsuit Against Saskatchewan Over Fossil-Fuel Power

A Court of King’s Bench judge dismissed a 2023 lawsuit by Climate Justice Saskatoon and seven residents challenging Saskatchewan’s climate policy and reliance on gas and coal power, finding the requested remedies would amount to judicially directed legislative reform beyond the court’s jurisdiction. The claim named the provincial government, SaskPower and the Crown Investments Corporation; Justice Holli Kuski Bassett heard the strike application and emphasized that while environmental protection matters, courts should not supplant legislature on policy design.

The ruling avoided any determination on the factual or constitutional merits, leaving open constitutional scrutiny in other circumstances. Applicants and environmental groups expressed disappointment and are considering appeals; a separate legal challenge targeting coal-plant decisions remains active.

References:

Canaan and Aurora Launch Calgary 'Gas‑to‑Compute' Pilot Converting Flared Natural Gas into Electricity for Bitcoin Mining and HPC by Bitcoin Magazine

Canaan Inc. and partner Aurora AZ Energy have launched a Calgary pilot that captures natural gas otherwise flared or stranded at wellheads and converts it on-site into electricity to power modular data centers running Bitcoin miners and high-performance computing workloads. The demonstration deploys Avalon A15 Pro miners and modular infrastructure, represents roughly 2.5 MW of computing capacity, carries over $2 million of equipment investment, and promises about 90% uptime.

Canaan estimates the project could avoid up to 14,000 metric tons of CO2-equivalent emissions annually by using gas that would otherwise be burned; the Alberta Energy Regulator reported more than 900 million cubic meters of gas flared in 2024. When miners are idle or grid curtailment occurs, operators could participate in demand-response programs and sell excess power back to the grid, potentially adding local flexibility.

References:

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.