AUC report gives insight into state of Alberta’s energy sector

By Mia Parker, Local Journalism Initiative Reporter

The Alberta Utilities Commission recently released its 2023-24 report card, detailing the state of energy projects in Alberta in a year defined by big changes in the sector.

As the province’s independent utilities regulator, the AUC is responsible for ensuring the fair and responsible development of the energy sector in Alberta. In the last year, the body issued 617 decisions and received 789 applications relating to energy projects.

The organization is entirely self-funded through industry participants and ratepayers rather than receiving any government funding, and received Canada’s Energy and Utility Regulator’s 2023 Innovation and Leadership Award for red tape reduction and regulatory streamlining.

“The Alberta Utilities Commission’s latest report card underscores the value and importance of their mandate,” said Nathan Neudorf, minister of affordability and utilities, in an emailed statement to Shootin’ the Breeze. “I want to express my appreciation for their efforts to work on behalf of Albertans.

He noted that nearly $12 million and 31,629 days of regulatory process time have been saved since 2019 by the organization’s efficiency.

“The AUC is playing a key role as Alberta’s government modernizes the utilities sector, ensuring Albertans have affordable and reliable energy when they need it,” said Neudorf.

According to chief executive Bob Heggie, this past year was one of the most significant periods of change since Alberta introduced electricity sector reform in the 1990s. 

“The energy landscape is changing in different and profound ways,” Heggie wrote in the 2023-2024 AUC report.

“Legislation and government policy are changing. The allocation of roles and responsibilities of agencies are being realigned. And the law is evolving.”

The renewables moratorium and inquiry

One of the biggest changes was the UCP government’s decision last summer to pause approvals on renewable energies and task the AUC with conducting an inquiry on the renewable sector.

“Their efforts to help conduct the inquiry into renewable power generation development laid the groundwork for new government policies that put Albertans first by ensuring responsible land development, addressing rising transmission costs, and protecting Alberta’s beautiful landscapes and the best agricultural industry in the world,” said Neudorf.

The decisions to pause renewable approvals and more recently to introduce limiting regulations have been criticized by advocates of the growth of the renewable sector, including the NDP’s energy critic, Nagwan Al-Guneid.

In an exclusive interview with Shootin’ the Breeze, Al-Guneid pointed to the moratorium as being a politically driven action by the government that has shaken the confidence of investors in Alberta’s energy market.

She cited $91 million as the annual loss to municipalities across the province caused by the blocking of renewable projects, which she noted is money that would have gone into infrastructure, economic growth and independence. 

In the MD of Pincher Creek, tax revenue from renewable energy generation made up 35.14 per cent of municipal revenue at $4,760,800 in 2023. 

“This revenue is coming from projects that were initiated, approved and constructed the way before the moratorium was announced,” said Al-Guneid.

As the critic for energy in the province, she says the priority should be articulating a vision of modernizing the sector with clear policy that invites investment into the province.

“Companies will not wait until we clarify the rules,” she said, noting companies looking to build renewable energy projects will look for opportunities in more accessible markets.

Al-Guneid said that when the moratorium went into effect one year ago, she heard from companies that found out the night before, with no advance notice the timelines of their investments would be disrupted.

“The confidence will be hard to gain back, but I remain hopeful.”

In her opinion, the future of the energy sector is not all about renewables, but about balancing options and exploring new opportunities like energy storage, geothermal and hydrogen.

“The grid of the future is flexible,” she said. “The grid of the future will have diverse energy forces.”

She also underscored the importance of decarbonizing energy production with the help of emerging technologies.

To enable this, Al-Guneid noted the need for clear and non-restrictive government regulations.

“The world is changing so much, and you see the AUC report actually highlights that there needs to be leadership around this conversation, there needs to be a clear vision,” she said.

Energy affordability

According to Neudorf, the AUC has already begun implementing the government’s new Utilities Affordability Statutes Amendment Act, seeking to lower and stabilize energy costs to consumers. 

“Market reforms are underway, and we are working to find ways to enable new technology and lower Albertans’ utility bills,” he said. “Our government is modernizing Alberta’s electricity system to ensure that it’s affordable, reliable, and sustainable for generations to come.”

According to AUC chairwoman Carolyn Dahl, affordability is a key focus in the commission’s work.

“Affordability is still top of mind to the AUC,” she wrote in the report. “Many things affect the increasing costs in our daily lives. In a time of added fiscal pressure, we at the AUC have remained focused on the fundamental regulatory objective of safe and reliable utility services delivered to consumers at just and reasonable rates.”

The annual cost per regulated ratepayer currently sits at $9.38, a 29 per cent decrease since 2008, according to the report. 

“We are pleased to see the AUC share our government’s commitment to reducing economic barriers,” said Neudorf. 

Other report highlights

The report also highlighted the findings of the recent Net-Zero Analysis of Alberta’s Electricity Distribution System by the AUC, which found that sustainability efforts can be made more affordable. 

The estimated required capital investments in the transmission and distribution to facilitate net-zero is currently seen at about $53 billion. 

“The most immediate challenge is the need for substantial investment in our electricity system,” said Heggie.

“This imperative stems from several factors, most notably being the transition to more renewable energy sources, the need to connect these sources to the transmission and distribution systems and the need to modernize our electricity system to keep pace with technological advances.”

The report also emphasized opportunities to learn from Indigenous communities, something Al-Guneid echoed as an opportunity to further reconciliation within the energy sector.

Going forward, the AUC also outlined goals to decrease regulatory burdens, facilitate change in the sector, and continue to shape a skilled workforce within the organization itself.

Both the minister and the critic told Shootin’ the Breeze the future of energy in Alberta is bright and the province is a leader in the sector.