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  • Why Do Our Power Bills Keep Going Up?

    As every parent understands, raising children is very expensive. Very worth it – but very expensive. There’s the never ending grocery bill, the fees for sports and other activities, school fees, saving for their post-secondary education and about a hundred other hits to the bank account each month.

    That is why parents, along with seniors on fixed incomes, are the first to notice and wince when their power bills go up. And in Alberta, our power bills are climbing at an alarming rate. In fact, most credible estimates predict that in just a few short years, our power bills will be 2 or 3 times what they were just a couple of years ago.

    One must first ask why? After all, the price of the natural gas we burn to produce electricity, especially during peak demand periods, is at historic lows. Coal, which provides most of our base load of electricity, is as cheap and plentiful as ever.

    So, if the cost of the stuff we burn to produce power is so low, why do our electricity bills continue to climb, and risk doubling or tripling in the next few years?

    You have your provincial government to mostly thank for this heavy hand in your pocket.
    The first problem deals with how the PCs have set up the purchasing and selling of electricity onto the grid. Alberta’s current electricity system is oriented to benefit electricity generators and transmitters more than us as ratepayers. The system is not only prone to price spikes, it essentially encourages and makes it easy for producers to hold off selling their electricity onto the grid until prices are at their absolute peak.
    Last week’s admission of power price manipulation by a major Alberta power producer is but the latest and most public example of this. TransAlta Corp. admitted last week to intentionally manipulating the cost of electricity during a 31-hour period last year which allowed them to pocket from $245,000 to $4,000,000 (we are unsure as to the final number) on the backs of Alberta ratepayers.
    One can only wonder how common this kind of ratepayer rip-off has become, and how much cash you are missing in your wallet because of it.
    The second emerging issue is the cost of transferring electricity from where it is generated to where it is used.
    You and I pay for every power line erected in Alberta. We even pay the price for transmission line companies to advertise to us on how much we so desperately need the power lines they want to build for us. We also pay for a roughly 9% rate of profit for the transmission line companies as an incentive for them to build the power line. These costs all show up on your power bill underneath ‘Delivery Charges’ (check out your power bill to see how huge this portion of your bill has become). And once we pay for these power lines, they are owned not by us – but by the power companies who can continue to charge us for up-keeping their lines that they use to charge for sending power to us. What a deal eh?
    The only protection for consumers from transmission line companies building as much transmission as humanly possible (remember, they get a 9% return on our investment), is what is called the Alberta Utilities Commission’s independent needs assessment hearing where the transmission companies must prove that the power lines they want to build are truly needed by Albertans to keep the lights on in our homes and businesses.
    Enter in the PC Government’s passage of its infamous Bill 50, which eliminated the critical needs assessment process and had the PC cabinet decide that billions of dollars in new transmission lines were needed, despite dozens of academic and industry analyses to the contrary. And besides, if the PCs really thought there was a need for these lines, why skip the needs assessment process; after all they claim the need is obvious? A look at the list of large PC donors, sponsors, PC party activists, fundraisers and friends makes the reasons for it pretty darn clear.
    Because the price of natural gas is so low, it is quite obvious that an objective independent needs assessment process would have shown that locally generated electricity from natural gas would eliminate or significantly reduce the need for these new mega power lines while also reducing pollution when compared to its northern coal generating cousins. It is these coal generators which need the lines to get their power down to Calgary, but more importantly, for export to the United States.
    Everyone would win with locally generated electricity from natural gas…everyone except the PC Party that is. They have favours to pay back after all. And Premier Redford’s refusal to repeal Bill 50 and start the needs assessment process from scratch on these new lines, speaks volumes.
    Albertans deserve better than this. A Wildrose Government, if elected, will implement the following reforms to vastly improve our province’s electricity generation and transmission system, and save all Albertans money on their power bills:
    Repeal Bill 50 and restart the process with a fully objective and impartial needs assessment hearing by the Alberta Utilities Commission.
    Promote more locally-generated electricity from natural gas.
    Ensure transmission costs are properly worked into planning and delivery, so that generators and transmitters are encouraged to minimize costs instead of ratepayers subsidizing inefficiency.
    Reform the way in which electricity is purchased and sold in Alberta, specifically focusing on reducing price spikes for consumers and businesses.
    Reduce electricity demand by developing market based mechanisms that encourage efficiency and allow businesses and individual Albertans to sell locally-generated electricity from co-gen, wind, solar, biomass, and other alternatives back to the grid.
    There is a clear decision to be made in the next election. Let’s not let the PCs give their friends a blank cheque at Albertan’s expense again.