Robert Hemstock, BComm, LLB
Definitions (there's a lot of jargon used in the electricity industry so I hope this page helps you better understand the terms and acronyms that may not be familiar to you)
Alberta Energy and Utilities Board (AEUB) - the predecessor to the Alberta Utilities Commission that is the government agency responsible for approving all tariffs and consumer charges for regulated electricity services. Often referred to as simply "the regulator", the AEUB was responsible for approving the Power Purchase Arrangements prior to them being auctioned in August 2000.
Alberta Utilities Commission - the successor to the Alberta Energy and Utilities Board.
Balancing Pool - 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 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 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.
Since 2001 the Balancing Pool paid money to electricity consumers by way of a line item credit on the electricity bill named the "Balancing Pool Allocation". Since 2017 this credit became a charge to electricity consumers. This charge is being used to pay for the PPA terminations. Click here to see where on the electricity bill this charge appears.
Independent Assessment Team ("IAT") - consisted of PriceWaterhouseCoopers, Charles River Associates, and a law firm who were appointed by the Government of Alberta under the Electric Utilities Act, 1998 to consult with electricity industry and consumers to create the Power Purchase Arrangements ("PPAs") and apply to the Alberta Energy and Utilities Board for approval of the content of the PPAs.
Independent Power Producers Society of Alberta ("IPPSA") - IPPSA is a trade association that has more than 100 member companies, who operate nearly 100% of Alberta's power supply.
Market Surveillance Administrator ("MSA") - a government agency that acts as the policeman of the electricity market and is responsible to monitor behaviour of all electricity market participants and take enforcement action if any market participant runs afoul of the market rules.
Power Purchase Arrangements ("PPAs") - a detailed contract-like document that transferred control over the sale of electricity out of mostly coal-fired generation plants from the original owner of the generation plant to companies that paid the most for each PPA in a PPA Auction held in August 2000. Click here for a full page that provides more information on what the PPAs are and how they were developed.
PPA Auction - the competitive process used by the Government of Alberta in August 2000 to sell the PPAs to the highest bidders. Prior to the PPA Auction all interested bidders spent months reviewing the hundreds of pages in each PPA to assess what PPAs they wished to buy and how much they were willing to pay for each PPA.
PPA Buyers - the companies who purchased the right to dispatch all the electricity output of the formerly regulated electricity generation plants in Alberta. The PPA Buyers acquired the PPA in the PPA Auction held in August 2000 or from purchasing the PPA from another PPA Buyer. The PPA Buyers pay the PPA Owner a monthly fee set out in the PPA document to compensate the generation plant owner for the costs incurred by the PPA Owner to operate the generation plant.
PPA Owner - the company that built and owned each of the electricity generation plants that operated in Alberta under the regulated electricity framework where the AEUB set the price for all electricity produced by these plants. When Alberta introduced electricity competition, these generation plant owners continued to own the generation plants but the PPA Buyer for each plant was entitled to sell all the electricity produced by that plant. In return, the PPA Owner was paid a monthly fee by the PPA Buyer to cover the PPA Owners costs of operating and maintaining the generation plant. The three PPA Owners are ATCO, Epcor, and TransAlta.