Alberta's Electricity Wholesale Market Redesign: What to Expect for 2027 and Beyond

The wholesale electricity market in Alberta is undergoing a significant redesign that will reshape how electricity is priced, dispatched, and settled starting in 2027. After more than a year of consultations and policy iterations, the Alberta government announced the final structure of the Restructured Energy Market (REM) in August 2025. This redesign aims to improve system reliability, lower overall electricity costs, and support Alberta’s goal of net-zero emissions by 2050. For small businesses, large commercial energy consumers, and energy experts, understanding these changes is critical for effective 8760 expense management and navigating the evolving energy market in Alberta.

High-voltage transmission lines in Alberta

Background and Objectives of the Market Redesign

Since March 2024, the Alberta government has been reviewing the wholesale electricity market to address challenges related to market certainty, price volatility, and system reliability. The REM redesign focuses on:

• Ensuring reliable electricity supply for all consumers.

• Achieving the lowest overall cost of delivered electricity.

• Implementing changes in a reasonable and manageable way.

• Facilitating Alberta’s transition to net-zero emissions by 2050.

  
  

The government emphasized that market prices should continue to be driven by competitive forces while protecting consumers from the undue exercise of market power by generators. This balance is crucial for maintaining fair pricing and encouraging investment in new energy resources.

Key Policy Directions and Market Features

The final REM design incorporates several important policy directions announced on July 15, 2025:

• Uniform market price for load customers: All electricity consumers will pay a single market price regardless of location.

• Location-based pricing for generators and transmission-connected loads: Generators and certain large loads will face prices that reflect transmission congestion and losses.

• Recovery of line losses through market prices: The cost of electricity lost during transmission will be included in market pricing.

• Transition mechanisms for existing generators: To ease the shift to the new market design, existing generators will have specific provisions to manage the transition.

• Market-based mechanisms for congestion and capacity constraints: The design introduces tools to manage transmission system limits efficiently.

• Revisions to physical dispatch and financial settlement protocols: These changes aim to improve market transparency and operational efficiency.

  
  

These features are designed to maintain competitive market dynamics while addressing the physical realities of Alberta’s electricity grid.

What the Redesign Means for Energy Consumers

For commercial and industrial consumers, the REM redesign will bring some changes but not a complete overhaul of the retail market structure. The majority of customers will continue to see familiar billing formats, though some cost line items may be renamed or adjusted to reflect the new market rules.

Impact on Electricity Pricing

• Stable prices for most consumers: The uniform market price for load customers means that most businesses will not face location-based price fluctuations.

• More accurate cost signals for generators: Location-based pricing for generators will encourage efficient dispatch and investment in areas with transmission constraints.

• Inclusion of line losses in prices: Consumers may notice slight adjustments in pricing as line losses are recovered through market prices.

  
  

Managing 8760 Expense Management

With the redesign, businesses will need to pay closer attention to their electricity consumption patterns and contracts. Effective 8760 expense management will involve:

• Monitoring hourly electricity usage to identify cost-saving opportunities. Click here to learn more.

• Understanding how changes in the wholesale market affect retail pricing.

• Considering demand response programs or energy efficiency investments to reduce peak consumption.

  
  

Natural Gas and Its Role

Natural gas remains a key fuel source for electricity generation in Alberta. The REM redesign does not directly change natural gas markets but may influence gas-fired generation dispatch through revised market signals. This could affect natural gas demand patterns and prices, indirectly impacting energy costs for consumers.

Implementation Timeline and Next Steps

The REM will move into the detailed rules definition phase following the August 2025 announcement. Enabling legislation updates are expected to be passed before the phased implementation begins in mid-2027. Stakeholders should prepare for:

• Regulatory consultations on detailed market rules.

• Updates to contracts and operational procedures.

• Education and training on new market protocols.

  
  

Businesses and energy managers should stay informed and engage with industry groups to understand how the redesign will affect their operations.

Electricity meter and control panel in Alberta industrial facility

Industry Reception and Outlook

The final REM design has been reasonably well accepted by industry participants. The increased certainty around market structure and pricing mechanisms is welcomed after a period of uncertainty and price volatility. While some terminology and billing line items will change, the overall retail market structure will remain stable for most consumers.

Energy experts note that the redesign balances the need for competitive market forces with protections against market power abuse. The inclusion of location-based pricing for generators and transmission-connected loads is expected to improve grid efficiency and investment signals.

Practical Advice for Energy Consumers

To prepare for the REM redesign, businesses should:

• Review current electricity contracts and understand how wholesale market changes may affect pricing.

• Work with energy consultants or suppliers to develop strategies for 8760 expense management.

• Explore opportunities for demand response or energy efficiency to reduce exposure to peak prices.

• Stay updated on regulatory developments and participate in industry forums.

  
  

By proactively managing energy consumption and costs, businesses can navigate the transition smoothly and benefit from a more reliable and cost-effective electricity market.

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