But it wasn't broken

But it wasn't broken!
A Letter to the Editor

Re: "Alberta's self-inflicted crisis," (Jan. 22). In 1994, due to political pressure from TransAlta Utilities and many large industrial consumers, the Alberta government decided to fix something that wasn't broken and began the process of deregulating our electrical industry. About 85% of the Alberta electric industry was investor-owned and regulated (as opposed to England, Norway and Ontario Hydro, which were crown-owned). In early 1995 Alex Henney, an official from England, was invited to speak to a meeting of electric industry stakeholders in Calgary about the English model. He was astonished that government and industry in Alberta would consider deregulation when we already had an accountable system with very low rates.

Delivering reliable electric service always was complicated, and the new system is vastly more complex--and therefore significantly more expensive. It will be a nightmare to understand and manage for years to come. Deregulation benefits the players with deep pockets and exploits residential, small business and commercial consumers. Ideology rather than common sense was the driving force behind the change. Stakeholders shared their concerns but the government basically ignored us.

It was apparent from the beginning of this process that no one was willing to risk investing large sums of capital in new stand-alone generation with the uncertainty that was being created by the deregulation process. The only substantial new generation being developed was the co-gen plants which would have been constructed anyway.

We clearly have a situation now that is a serious threat to our economy. This is a crisis with no obvious practical solutions in sight. Capping rates in a competitive market is a mistake. The use of royalty rebates to mitigate rates until the supply-demand situation is back in balance is better than rate caps. What is needed is an incentive to motivate the immediate construction of low-fuel-cost generators to get supply back in balance.

Herman Schwenk
Coronation, Alta.