The Bulk Electricity Contract

Backgrounder

In 1996 the Province of Alberta de-regulated the electricity market. Recognizing this as an opportunity to take a whole-of-government approach to supplying electricity to federal departments in Alberta, Public Services and Procurement Canada awarded a 10-year contract to ENMAX to provide electricity to 11 departments. That contract expired in 2016, and achieved approximately $26 million in cost avoidances. 

The success of this initial contract resulted in a competitive process for a second five-year electricity contract (with one option year) worth $131 million. The contract was awarded to ENMAX to supply electricity to 11 federal departments operating facilities in Alberta. The contract came into effect January 1, 2017 and it is anticipated that it could result in cost avoidances of approximately $7M over the next five years. At the time of contract award, Department of National Defence, Public Services and Procurement Canada, Environment and Climate Change Canada, Canadian Food Inspection Agency, Agriculture and Agri-Food Canada, Parks Canada Agency, Natural Resources Canada, Correctional Service of Canada, Royal Canadian Mounted Police, Health Canada, and Canada Border Services Agency were collectively consuming just over 230,000 Megawatt hours (MWh) annually in Alberta. 

The Government of Canada has committed to using 100% clean energy by 2025 and reducing greenhouse gas emissions from federal operations by 40% from the 2005-06 baseline, by 2030. In support of this commitment, the contract included the option for departments to purchase Renewable Energy Certificates (RECs). A REC is a tradable energy commodity that represents proof that one MWh of electricity was renewably-generated. The REC is purchased to support the generation of electricity using renewable energy sources having low environmental impact, such as wind, solar, water, and biomass. 

Five of the eleven participating departments have decided to purchase varying percentages of their electricity from RECs:

  • Department of National Defence – 90%
  • Environment and Climate Change Canada – 90%
  • Public Services and Procurement Canada – 85%
  • Canadian Food Inspection Agency – 35%
  • Agriculture and Agri-food Canada – 35%

At the time of contract award, approximately 63% of the total federal government electrical consumption in Alberta is covered by 144,595 MWh annually in RECs. All departments may increase the percentage of clean electricity they purchase depending on market availability and pricing.

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