When Knowledge is Power

OUR LAWS BEGIN WITH US

In last quarter’s article, we highlighted recent developments in Alberta’s electricity sector and who our regulators are. We are building further on this topic in this issue by talking about the actual laws that govern us and the critical role REAs play when laws are drafted.

When the Legislature is in session and debating new bills (proposed laws), it’s easy to get the impression that laws are made and passed only under the Legislature dome. But laws are, in fact, considered year-round by ministers and MLAs when they talk to citizens to find out what they are thinking.[1]

Laws begin with us – citizens and groups of citizens, who are concerned about issues that affect them.

This is exactly what is going on when our Federation is invited into discussions to change the Regulated Rate Option, the policies on distributed generation, the rules on micro-generation and many other matters that affect the way REAs operate. We are bringing forward a unified REA voice to present our own informed ideas and solutions on how to best regulate electricity for all Albertans. We can not expect effective representation from our government unless we do our part to contribute wisely in these discussions.

It is true that no minister or MLA can agree with every single opinion they hear. Eventually, the cabinet minister responsible for a portfolio and MLAs representing their constituents will form a position. The position they take will depend on party platforms and their own personal beliefs. But, it will also be based on what they have determined most people think about a certain issue.[2] So it is our duty to speak collectively on what REAs and their members need to operate better and serve Albertans better.

2016-17 has been a remarkably busy year for discussing changes to Alberta’s electricity sector. Thank you for working hard with the Federation to represent your members when we have requested your input. Please keep reading your E-News for updates – your input will be needed for some time, and your thoughts are always welcome.

Below for your reference are key laws REAs should be familiar with – some of them are changing as we speak, especially when it comes to the Regulated Rate Option and micro-generation. We need to stay up-to-date not only to ensure compliance, but also to think ahead about opportunities for REAs in a future market. But we have only provided a summary. Every act and regulation can be easily viewed online or ordered in formatted hard copy from Alberta Queen’s Printer (official publisher of Alberta laws) via the Laws Online/Catalogue. Alberta Energy also provides an easy reference list of electricity acts and regulations. We encourage you to look them up in detail, so we can continue to expand our collective knowledge and use it powerfully.

Electric Utilities Act (EUA)

The EUA outlines the vision and structure of Alberta’s electricity market. It establishes both the Alberta Electric System Operator (AESO) and Balancing Pool and their powers. The Act also directs market players to operate in a manner that supports fair and open competition. Details are outlined in various regulations such as the:

• Code of Conduct Regulation
• Micro-Generation Regulation
• Regulated Rate Option Regulation
• Fair, Efficient and Open Competition Regulation

Alberta Utilities Commission Act (AUCA)

The AUCA establishes the Alberta Utilities Commission (AUC) and its power to regulate the utilities sector. It also establishes the Market Surveillance Administrator (MSA) and its powers. Details are outlined in some key regulations for REA purposes.

Rural Utilities Act (RUA)

The RUA sets out how REAs and gas co-ops can be set up and governed. Specific conditions drafted into the Act when it was first created still affect how REAs compete in Alberta’s electricity market today, these include:[3]

1. The RUA allows the membership to elect a board of directors that makes decisions about rates on behalf of the whole membership.  Many sections in the RUA deal with governance, especially section 16.
2. The RUA protects the whole of the membership from liability in section 10.
3. The RUA acknowledges the legal rights of the membership of the whole and protects them against any single idea that is contrary to the decisions of the whole membership. See section 11.
4. The RUA allows the REA to function on its own or with companies and municipalities to connect or disconnect members' electricity. Check out sections 16, 51, and 52.
5. Each REA must maintain a reserve fund to cover upgrades and maintenance, in addition to any capital needed to grow and expand.
6. REAs cannot make changes to bylaws (e.g. to restructure shares to raise capital) without approval from the Ministry of Agriculture and Forestry.

Details on how rural utilities should operate (reserve funds, etc.) are outlined in the Rural Utilities Regulation.

An Act to Cap Regulated Electricity Rates

New legislation came into force in June 2017. The AFREA continues to work with legal counsel, consultants, and the Department of Energy to fully understand the impact of this legislation on REAs. If you are interested, please contact the AFREA office or Al Nagel, CEO for up-to-date information.

Renewable Electricity Act

This new Act brings into force the Renewable Electricity Program, which offers companies the chance to provide 400 megawatts of renewable electricity to Alberta’s power grid. The Act establishes a target for 30 per cent of electricity to be produced from renewable sources by 2030.

This is new legislation and the AFREA has been asked by the AUC to represent Alberta REAs in a report that will be presented to the Minister of Energy at the end of December 2017. For more information, see Proceeding 22534 at the AUC or contact the AFREA.