As the mandatory review of the Canada-U.S.-Mexico Agreement (CUSMA) approaches, U.S. President Donald Trump’s chief trade representative outlined specific conditions that Canada must meet. Among the familiar issues like dairy supply management, a new addition was a mention of Alberta’s electricity system. U.S. Trade Representative Jamieson Greer highlighted Alberta’s alleged “unfair treatment of electrical power distribution providers in Montana.”
According to representatives from Montana, Alberta’s regulations sometimes hinder the sale of Montana electricity into Alberta, impacting power producers and discouraging cross-border transmission investment. Alberta, on the other hand, denies any preferential treatment towards Montana compared to other Canadian provinces.
Last year, the Office of the U.S. Trade Representative identified Alberta’s Alberta Electricity System Operator (AESO) as a trade concern.
Montana State Senator Daniel Zolnikov expressed concerns about the impact on trade agreements due to the Alberta-Montana electricity issue. Zolnikov emphasized the need for clarity on the use of transmission lines between the two regions to encourage infrastructure investments.
In response to the situation, a representative for Montana’s senior U.S. Republican senator, Steve Daines, expressed disappointment over Alberta’s regulations that allegedly discriminate against Montana electricity producers, impacting Montana’s grid stability.
Disputing Montana’s claims, Alberta Utilities Minister Nathan Neudorf clarified that Montana is treated on par with other Canadian jurisdictions regarding electricity regulations.
An ‘energy island’
With the phasing out of coal power in 2024 and a growing reliance on renewable energy sources, Alberta’s energy landscape has evolved significantly. The disagreement between Alberta and Montana stems from operational challenges in managing a modern electricity grid, according to Ian Nieboer, managing director of Enverus Intelligence Research.
Alberta’s limited grid connections, primarily through interties with British Columbia, Saskatchewan, and Montana, create complexities in cross-border power flow.
From Alberta’s perspective, grid regulations apply uniformly to all suppliers. When electricity supply surpasses safe capacity limits, Alberta Electricity System Operator (AESO) must curtail power generation to maintain grid stability, explained Nieboer.
Neudorf, Alberta’s utilities minister, emphasized the need for collaboration between Alberta and Montana to address shared energy challenges.
Jason Wang, a senior electricity analyst at the Pembina Institute, highlighted the importance of regional connections to reduce costs and enhance grid reliability. He underscored the need for enhanced interties between Alberta and neighboring regions like Montana and British Columbia.
Neudorf mentioned that upgrading interties could require a substantial investment of up to $500 million, sparking discussions on funding and long-term solutions.