KH#2 Online; AB Transmission Costs Rising; CA Electricity Policies Hurting WCC

Keephills#2 (395MW) came back online at 04:54 this morning.

Albertans can expect a few more years of rising electricity costs during the provincial phase-out of coal-fired electricity in favour of renewables and natural gas. But those increases will be coming from infrastructure projects greenlit by the previous government, and not the cost of electricity itself. The biggest challenge in Alberta with regards to electricity is the cost of absorbing new transmission lines which were commissioned by the PCs that are now entering service. There are a huge multi-billion dollar expenditure that we are having to pay for at the same time demand has dropped – or at least, is not growing the way it did – and when you put those two things together, it actually adds up to a substantial increase to people’s wire charges. The wire charges are sometimes actually higher than their energy charges. That’s because our energy charges at the moment are historically low – lower than is really sustainable. While the opportunities for energy efficiency are getting better all the time, the province really needs to find a use for these line upgrades. Franchise fees set by municipal governments and local municipalities setting the franchise fee rates who are partly responsible for driving up energy costs although those fees have been relatively stable and people haven’t been jacking them up but some of them are still quite high. (David Gray)

California is an energy policy bully. Using market share and political willpower, global warming-fearing Golden State politicians are reshaping the electric market far beyond their 39 million constituents to 46 million others living in 13 states, Western Canada and portions of Mexico. As with most things connected to California’s progressive politics, the bad unintended consequences of this effort to create a brave new energy market will outweigh the good intentions. The first high-profile victim of California’s energy policies could well be 755 mostly Navajo workers at the large, coal-fired Navajo Generating Station in northern Arizona and the Kayenta Coal Mine 100 miles to the east that supplies it. Climate-change concerns have been the main driver of California’s energy policies since 2006. That year saw then-Gov. Arnold Schwarzenegger sign two bills, AB 32 and SB 1368, which radically remade California’s electric markets. In turn, these policies are disrupting the power grid from British Columbia and Alberta in Canada to Baja California and Ciudad Juarez in Mexico, an area serving more than 85 million people. California dominates the Western Interconnection, the name for the electric grid in America’s West, using about a 34% of the power consumed among the 11 states wholly or mostly (Montana and New Mexico) in the grid. More importantly, California is the biggest electric importer in the nation, with about 32% of the electricity it uses coming from eight states and Canada. The plurality of the power exported to California comes from coal. Occasionally, as much as half of the power consumed in Southern California comes from coal-fired plants in Arizona, New Mexico and Utah. California’s green energy policies will eventually destroy the reliable coal baseload generation that provides the West with a large degree of its grid stability and affordability, at least outside of California where the cost of electricity is about 62 percent higher than its Western neighbors.

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