Berkshire Hathaway Chairman Warren Buffett at the company's annual shareholder meeting in Omaha, Nebr., on May 4, 2019.SCOTT MORGAN/Reuters
The energy company owned by Warren Buffett’s Berkshire Hathaway Inc. BRK-A-N is accusing Alberta’s grid operator of limiting electricity imports from Montana, which it says jeopardizes renewable power investment in the state and could cost Alberta consumers billions of dollars.
Berkshire Hathaway Energy Canada (BHEC) alleges that the Alberta Electric System Operator (AESO) has at times been restricting power flowing through an interconnection that crosses the Canada-U.S. border in favour of electricity generated within the province. BHEC, which owns the 310-megawatt Montana-Alberta Tie Line, made the allegation in a complaint filed with the Alberta Utilities Commission (AUC).
By engaging in what BHEC calls “discriminatory and anti-competitive behaviour,” the AESO’s practices could put Canada afoul of its obligations under the U.S.-Mexico-Canada Agreement (USMCA), the updated trade deal that replaced NAFTA, the company warns.
It said the AESO has failed to allow necessary capacity additions to the grid that would alleviate constraints so imported power can better compete with domestic generation. Instead, it has curtailed imports from Montana, as well as British Columbia, to deal with system-reliability concerns the operator itself has identified, the company said.
“BHE Canada’s analysis suggests that the incremental curtailments of imports in place since March 15, 2023, may be costing Alberta consumers as much as $2.8-billion in incremental electricity costs on an annual basis,” the company said in its 57-page complaint filed Feb. 9.
The limitations put at risk more than US$1-billion of clean-energy investment in Montana, BHEC said in an internal document obtained by The Globe and Mail.
The allegations – which the AESO rejects – coincide with Alberta having struggled in recent years with the highest electricity costs among Canadian provinces, amid tight transmission capacity and a limited number of major generators after a series of power-purchase agreements expired three years ago.
BHEC also owns AltaLink, which operates 13,000 kilometres of transmission lines and 300 substations in Alberta.
A spokesman with BHEC said competition from imports helps maintain reliability and affordability while also reducing greenhouse-gas emissions.
“We are asking the Alberta Utilities Commission to direct the AESO to allow Alberta’s electricity interties to function as designed and permitted, and give electricity users the best chance to reduce both their bills and the likelihood of outages across our province,” company spokesman T.J. Page said in a statement to The Globe.
BHEC said in its complaint that it wants the AUC to find that the AESO is not supporting the “fair, efficient and openly competitive operation of the electricity market or is not in the public interest.” It is seeking a ruling on the matter by July 1.
In its response to the complaint, the AESO said “there is no air of reality” to that timing. It believes that the allegations are related to policy and should be heard in other forums, that the $2.8-billion cost figure BHEC uses is “highly speculative,” and that a rushed process could produce “material flaws and unintended consequences.”
The agency’s legal counsel, Norton Rose Fulbright, pointed out in its filing that there is already significant work on electricity policy being done in Alberta. However, the company seeks to overhaul the regulatory system in place when it acquired the interconnection, while circumventing the policy options under discussion, it said.
“BHEC’s complaint appears to consist of attempts to increase the revenue it earns from its merchant intertie facility, under the guise of questioning the AESO’s response to the reliability challenges faced by Alberta’s system today,” the AESO’s lawyers wrote. “The fact that most of BHEC’s concerns are already being addressed belies the urgency BHEC claims.”
AESO said it wants the AUC to seek comments from other interested parties in any proceedings to address the complaint.
AESO spokesperson Janice Coffin declined to comment further, saying the agency would deal with the complaint through the AUC process.
The AUC is studying the application and will decide on the best way to adjudicate the matter, said Geoff Scotton, spokesman for the commission. It could be through an oral or written hearing, he added.
If the regulator determines through evidence or a hearing that BHE’s complaints have merit, it can issue directions to the AESO to change its behaviour, along with the reasons for its decision, Mr. Scotton said.
BHEC argued that it may have a USMCA case because the intertie is an international power line, which comes with expectations of fair and non-discriminatory trade practices.
It also pointed out the trade deal’s energy side letter, which is aimed at avoiding disruption of contractual relationships and supports North American market integration.