Enron Mail |
Steve, Rob Hemstock will give you the details of the Alberta PPA auction.
The only other auction type mechansims of which I am aware in Canada with respect to power supply are the following: a) Ontario electricity distributors have the choice of purchasing power for their default service customers ( called "standard supply customers" here) either directly from the IMO real-time market or from a third party supplier. If the distributor chooses to secure power from a third party supplier the distributor must employ a formal, transparent and auditible RFP process. Many Ontario distributors may opt for third party supply precisely because they want to avoid cash flow problems comparable to those facing the California IOUs - that is, if an Ontario distributor chooses to buy directly from the real time spot market, it must supply that power to default customers at a rate fixed by the provincial regulator - the Ontario Energy Board ("OEB") - and record the difference between the purchase cost and the rates charged in a deferral account. The amount in the deferral account will be debited or credited to customers periodically. However, the OEB has fixed the default service rate too low and, accordingly, distributors opting for supply directly from the IMO real time spot market may face very serious cash flow problems. The term of the third party supply that may be secured in this fashion is unclear, but as matters stand in Ontario there may be significant regulatory risk in securing supply more than 1 year out. (This was the first issue in respect of which Enron retained Seabron Adamson and Seab knows the issue well); b) An auction/RFP process is also included in the "restructuring" plan recently adopted by the Quebec National Assembly in respect of Hydro Quebec. The key features of that plan are the following: 1) a long term vesting contract between HQ Generation and HQ Distribution under which HQ Generation is obliged to supply HQ Distribution up to 165 twh annually; and 2) the requirement that HQ Generation secure any supply it needs over and above the vested amount through an RFP process to be approved by le Regie ( the provincial regulator). Aleck
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