They were forced to pay generating companies market prices for power but were unable to pass the full costs on to consumers. The utility companies lost billions of dollars. Berkley economist Steve Stoft is writing a book about deregulation. He says California and Alberta made similar mistakes that discouraged the new construction of generating plants. Our industry insider, who has requested anonymity, says Alberta should have looked more closely at what was happening in California.
Electricity prices change by the minute based on supply and demand.
Prices are volatile because demand has gone up but the supply has not. Also, natural gas prices have risen and that means the electricity being generated at the province's natural gas plants is expensive. Those market forces are pushing prices up. To handle the volatility in the market, the Alberta government set up a fund. They sold off power contracts in two electricity auctions last year.