Independent assessment team report to the Alberta Energy and Utilities Board on implementing deregulation of electricity generation in Alberta

The particular aspect of deregulation of electricity generation in Alberta discussed is the economics of power purchase agreements (PPAs). There are various parameters associated with the PPAs that are emphasized including: technical characteristics; unit availability, capital costs and O and M costs; coal costs; gas costs; payment for flexible operation; hydro obligation amounts; income tax; property tax; and working capital, insurance and other costs. Chapter one of the Independent Assessment Team (IAT) report covers the report scope, and chapter two describes certain main principles underlying determination of PPAs. Chapter three discusses the IAT's determination of the PPA's forms and their main terms and conditions. Chapter four describes the IAT's determination of the underlying parameter values of the PPAs. Chapter five describes the ITA's determination of the allowed rate of return on equity and the capital structure of PPAs. An appendix covers a detailed description of the consultations carried out by the IAT; a report by HESI on the results of Pool modelling carried out to date (the HESI work was done to assist the IAT in determining PPAs, not the auction design); summary outputs of the IAT's financial model with indicative financial statements for each unit and company under the PPAs; and a document on shared services, common facilities and new units