The Development of the Merchant Power Market in Alberta

Abstract

The first cracks in the traditional monopolies held by Canadian provincial-government-owned hydroelectric companies and large integrated utilities are beginning to emerge. Among the provinces, Alberta is leading the charge towards deregulation of the Canadian power market. In December 1999, the first non-recourse merchant-power project financing to emerge from Canada hit the syndication market. The 416 MW Joffre Cogeneration Plant in the Province Alberta is a model for future merchant power financings in Alberta and across Canada. Despite the significant progress made in deregulation of the Alberta market, the creation of a broad merchant-power market in Canada is still years away. The force that may eventually drive Canada to merchant power is the increased interconnection with the U.S. and greater participation by Canadian utilities in the developing merchant markets to the south.