Alberta electricity & gas market update – May 2026

Electricity market overview

Average AESO Pool Price: 0.430/kWh

May’s average AESO pool price presents a 56% increase MoM from April’s settle of ¢ 0.276/kWh, and a 5% increase YoY from May 2025’s settle of ¢ 0.410/kWh.

Key drivers of market volatility

• Supply-side pressure: Increasing reliability risk due to outages, natural gas supply disruptions, and renewable variability is tightening the system’s supply cushion.
• Growing demand: Expansion in sectors such as data centers and electrification is expected to drive sustained demand growth, elevating forward price risk.
• Volatility risk: Greater dependence on natural gas alongside higher renewable penetration is contributing to episodic price spikes and increased intra-hour volatility.

Overall, while current pricing appears stable, underlying market dynamics point to rising volatility and risk—particularly for large commercial and industrial customers. This environment reinforces the importance of proactive risk management strategies.

Natural gas (AECO) market overview

Average AECO Price: $1.45/GJ

May 2026 AECO gas prices average present a 7.6% decrease MoM and a 26.4% decrease YoY. AECO gas prices remain sensitive to constrained production and declining storage levels, with short-term trends dependent on improving production receipts and inventories, while longer-term winter prices are expected to be weather-dependent.

Forward curve indicators

• ~$2.39/GJ – 2027 Futures
• ~$2.52/GJ – 2028 Futures
• ~$2.59/GJ – 2029 Futures

Market insights & trends

• Over the longer term, with LNG Canada not anticipated to be a significant price driver for Alberta producers, winter prices will largely remain dependent on weather patterns.
• Alberta’s natural gas production decreased by 8.7% (1.2 BCF/D) from March 2026 and by 6.2% (0.85 BCF/D) year-over-year, primarily due to plant turnarounds and spring breakup (road bans). Consequently, Alberta storage levels at the end of June are forecast to be 6% lower (27 BCF) than last June, which has pushed spot prices higher from their April 2026 lows.
• Traders will closely monitor production receipts and their impact on storage levels through the end of the injection season (October 31st). Without improved production, spot prices are expected to trend higher. Ongoing plant turnarounds make it challenging to assess actual production capacity during the summer, leading to a short-term price dependency on storage inventories.

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