Rural groups seek return of power, gas regulation

September 5, 2002

Rural groups seek return of power, gas regulation

Dave Mabell

A new voice for rural Albertans is calling for an end to Alberta's experiment with deregulated power and gas.

The Klein government's experiment has no chance of success, members say, and Alberta MLAs should call it off.

The Alberta Rural Utilities Association, an alliance of gas co-ops, rural electrification areas and the Alberta Association of Municipal Districts and Counties, was formed earlier this year to urge the Conservative government to return public regulation to Albertans' gas and power supplies.

"The deregulation initiative hasn't demonstrated any benefits to rural Alberta so far," says Jack Hayden, a member of the new group's board and president of the association of counties and MDs. "One thing it has clearly shown is the importance of mechanisms to protect consumers from price instability and opportunistic business practices," he says.

"As small players in the overall energy market, rural Albertans in particular need the kind of consumer protection that results from the existence of municipal utilities and rural utility co-ops."

If deregulation has brought any benefits to consumers in Calgary or Edmonton, the utilities association says it's failed in rural Alberta.

"The government is already seeing electrical deregulation that was supposed to reduce prices through increased competition, is resulting in exactly the opposite," says Mike Heck, who chairs the new group.

After paying power bills higher than almost anywhere else in Canada, he says Albertans may soon face further price hikes. A major utility wants to add $15 million to consumer's bills to cover a "projected shortfall."

In other provinces, all power generation, transmission and distribution costs are included in a single rate. But in rural Alberta, many REAs have been able to reduce their distribution rates - only to see members' bills increase as generators charge far more.

"Many rural Albertans are seeing their electrical bills double or triple, and they're not happy," Heck reports.

Urban consumers aren't much happier, he points out, and their concerns have been well voiced by groups like the Industrial Association of Southern Alberta and the Consumers' Coalition of Alberta. Heck agrees with many of their concerns.

"There is no consumer choice," he says. "There are very few marketers in the game," because Alberta's population isn't nearly large enough to allow competitors a profit.

The government proceeded with electrical deregulation without completing a cost-benefit analysis, says Heck. Now that Albertans have experienced the costs first-hand, it's time for the government to admit its error.

"The government should adopt a fall-back position," putting all power rates under public utilities regulation. "We're not too far down the path that it couldn't be done."

At the same time, Heck says utility companies that continue sending out grossly inaccurate bills should be penalized for their ineptitude. A committee led by a backbench Tory MLA is recommending fines for companies that can't get their numbers right after nearly two years of power deregulation.

"They're suggesting a $75 fine for each erroneous bill."