CALGARY — David Pickup, director of the Pembina Institute’s Electricity program, made the following statement in response to the Government of Canada’s announcement in support of five specific intertie projects:
“As we’ve seen with other discussions around major infrastructure in Canada, naming specific priority projects is a vital step in ensuring those projects move forward. Today’s announcement moves us on from talking about interties in the abstract, instead providing a clear focal point for governments and industry to rally around: five specific lines that need to be prioritised to support national security, reliability, and affordability. This is a very good thing, and a mark of how much progress has been made on this issue, both by the federal government and the provinces, in the last 18 months. Making real progress on these projects will underpin the federal government’s recently announced Electrification Strategy, which is about cutting costs for consumers by providing them with access to modern, affordable energy resources – like EVs and heat pumps – powered by efficient, low-cost, clean electricity grids.
“This is the kind of momentum that is needed. As the International Energy Agency and many other credible analysts have made clear several times in recent years, economic growth increasingly depends on access to reliable, affordable electricity – and that ultimately means modern, well-connected grids that maximize the use of lowest-cost clean power.
“On interties, there is no one-size-fits-all answer. Every one of these five lines will require a set of negotiations between the relevant provinces and territories, as well as contributions from the federal government on funding, regulatory assistance, and convening to problem-solve. The economic and environmental benefits to provinces and territories will be significant, but parties must come to the table in good faith to ensure costs and benefits are appropriately shared. That has implications for provincial and territorial electricity markets, the makeup of a jurisdiction’s specific energy mix, the availability of low-cost spare electricity capacity and much else besides. But the complexity of the challenge does not mean it cannot be overcome. For the first time in a long time, there is one big benefit to all provinces in expanding their east-west interties: reducing dependence on a volatile United States.”
Background: Why is the existing B.C. – Alberta intertie not being fully used?
Today’s announcement included a commitment to expanding the Alberta-B.C. intertie, but it is important to note that the existing line is not being fully utilised. Understanding the reasons for this helps to demonstrate why intertie negotiations can be complex.
- The intertie between Alberta and B.C. was constructed in 1986 and was designed to carry up to 1,200 megawatts (MW) from B.C. to Alberta and 1,000 MW from Alberta to B.C.
- According to data from the Alberta Electric System Operator (AESO), Alberta has been consistently limiting the capability of the AB-B.C. line to 40-60% of its intended capacity, while B.C. has been consistently allowing up to 90% on its end.
- Across all grids in Canada (and elsewhere), grid operators must have a back-up plan to meet demand in an emergency situation where their biggest single source of electricity capacity were to be interrupted. Depending on the grid, this single source could be a large nuclear plant, hydro plant, gas plant, etc. In the case of Alberta, if the intertie with B.C. was being used at full capacity, the intertie itself would be Alberta’s biggest single source (and could be providing 8% of the province’s peak electricity demand).
- Therefore, Alberta can only make full use of the intertie if it has a backup plan for the (very unlikely event) that the line suddenly went down. Since 2007, Alberta has been directed to implement such a plan – but has not done so. According to AESO in 2025, there remains “a lack of… ancillary service” on the Alberta side.
- In practice, this means that instead of drawing in low-cost hydroelectricity from B.C. through the intertie, at times of peak demand, Alberta is instead relying on expensive gas-fired power within its own grid.
- Studies show that maintaining this status quo is more expensive for Albertans than spending money on grid modernisation that would be required to restore the intertie to its full capacity.
- According to BC Hydro, the decision(s) to limit the import of power from B.C. to Alberta — and delaying the restoration of the intertie — “undermines the value of having an interconnected grid and ultimately increases electricity rates for both British Columbians and Albertans.” On Alberta’s side, this is because the AESO is instead calling upon more expensive (often natural gas generators) which increases prices.
- Encouragingly, the AESO is now in the process of procuring new capacity (peaking gas or batteries) with the goal of restoring the AB-BC intertie to (or near to) full capacity, at the direction of the Minster. However, B.C. is skeptical of the “timing and effectiveness of the AESO’s intertie restoration efforts” and is concerned that Alberta’s electricity market redesign could “potentially result in additional adverse treatment of commercial activity on the [i]ntertie.”
In summary, the current situation with the B.C.-AB intertie running at a fraction of its full capacity creates the market conditions for gas generators to sell electricity at higher rates, increasing both costs for Albertans and higher emissions, as lower-cost and lower-carbon hydro cannot be brought in from B.C.
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Contact
Bhan Gatkuoth
Senior Communications Lead, Pembina Institute
587-742-0818
Background
Op-ed: This Team Canada approach to electricity will help build the economy we need
Submission: Powering Up an Electrification Strategy for Canada
Media release: Electricity strategy confirms clean electrification will be backbone of Canada’s economy
