August 21, 2002

Energy minister gives poor grades to power deregulation experiment

Edmonton (CP)

Energy Minister Murray Smith admits Alberta's deregulated electricity market still has a way to go.

Smith said if he were handing out report cards, he would give its current progress a 55 or 60 per cent mark.

"There needs to be another retailer, there's no question," Smith told the Edmonton Journal editorial board.

Smith said he would be much happier if there were at least three competitors in each residential market, instead of the sparse competition that exists now.

At the same time, the minister said there's some good news.

"We've avoided power outages," he said. "I think we're seeing downwards pressure on rates."

Liberal energy critic Hugh MacDonald was incredulous when he heard that Smith had given the retail electricity market a passing grade.

"I would rate it at 10 per cent," MacDonald said. "It's an abysmal failure. Where is the competition that was promised? There's no competition."

Alberta, MacDonald said, has too sparse a population to attract any real competition.

"We are an island in the North American grid." He said, "We're still paying off, on our monthly bills, what utility companies couldn't charge running up to the provincial election."

During the meeting, Smith reiterated that planned changes to the Electric Utilities Act should lead to increased competition.

A committee of Tory members of the legislature has recommended the Alberta Energy and Utilities Board should set power rates for municipally owned power companies - Enmax in Calgary and Epcor in Edmonton.

Smith has said other power firms are leery of setting up shop in Alberta if they have to compete with the city-owned utilities.

The cities say the provincial government is undermining their independence by taking away their right to regulate the utility rates.

Copyright 2002 The Lethbridge Herald