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Bill 86: How the Electricity Modernization Bill Can Affect Alberta’s Grid

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How Bill 86 could impact Alberta’s electricity grid

The Alberta government introduced Bill 86 in November 2021, which talks about integrating energy storage into Alberta’s interconnected electric system.

The previous legislation and regulatory framework restricted the use of energy storage technologies because of the following reasons:

  • Lack of technical know-how on how costumers could self-supply and also send the excess to the grid.
  • The absence of specific rates for energy storage resources in the AESO and distribution utilities’ tariffs.
  • Lack of clarity or process concerning when and how energy storage resources may be considered as non-wires alternatives.
  • Lack of clarity on how energy storage assets would be treated concerning a utility’s rate base, whether the utility owns the asset or obtains the services under contract with a third-party-owned asset.
  • Lack of clarity on how energy storage assets would be treated concerning a utility’s rate base, whether the utility owns the asset or obtains the services under contract with a third-party-owned asset.

This bill intends to update the existing legislation with evolving energy technologies to enable greater integration of technical innovations to Alberta’s electricity system, providing long-term benefits for both consumers and the electricity industry.

This new bill will require participating companies to meet public health and safety standards and pay tariffs set by the Alberta Electric System Operator (AESO) to keep them from driving up electricity costs for consumers. The new system will also help Alberta prepare for the rise of electric vehicle charging, rooftop solar power and bi-directional charging between EVs and the grid.

As Alberta becomes the hub of clean technology innovation and implementation, passing this bill under the Electricity Statutes Amendment Act will:

  • allow the integration of energy storage into Alberta’s interconnected electricity system in both the competitive electricity market and the transmission and distribution system.
  • allow unlimited self-supply with export, technology that allows electricity to be generated on-site with excess power sent to the grid while ensuring that transmission system costs are balanced among all system participants.
  • build on the Alberta Utilities Commission Distribution System Inquiry on modernizing Alberta’s electric distribution system to ensure the cost-effective integration of distributed energy resources in the system.
  • add a requirement for distribution owners to prepare long-term plans as per future regulations, which will describe the outcomes and timing of the plans.

When fully functional and implemented, and if passed, this will also allow consumers to become a generator and earn through the sale of electricity to the grid.

Would this new piece of legislation require technological changes?

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Net metering: How Electricity Interconnection and “Selling Back Into the Grid” Works (Infographic: EnergyRates.ca/Data source: Newfoundland Power)

Bill 86 allows competitive procurement of energy storage resources as non-wire solutions, which refers to investments or operating practices that replace the need for building or expanding distribution or transmission systems.

This would open up participation in the province’s power grid, allowing companies to self-supply unlimited amounts of power and sell excess amounts to the grid for consumer use. Once passed, this bill will also make the amendments of upgrading the distribution system to allow bi-directional transfer of electricity and monitoring the same.

Bill 86 would encourage forms of energy storage like battery storage systems which could help deal with the ‘intermittency’ of renewable energy, decrease carbon emissions, improve the reliability of the power grid and encourage microgeneration or distributed generation that will help in offsetting distribution costs to come down for many remotely locations businesses and consumers.

The new technologies that are not covered in existing legislation, like electric vehicle charging and residential solar power generation, smart grids can also get their way into the system.

Selling electricity back to the grid: How does it work?

One of the major benefits of this arrangement is it will help customers to offset their usage and pay less on their utility bills since they’re producing their own energy. This can be done while maintaining a secure connection to the grid for those times when they need to purchase electricity.

The bill will allow the safe interconnection of customer-owned generating resources to utility-owned networks. Typically, a bi-directional meter is installed to measure the additional electricity a customer requires from the electricity grid and any excess generation that may be supplied back to the grid. This helps in proper monitoring of electricity flow and billing to the customer.

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