Businesses continue to struggle with high power prices

May 2001

Businesses continue to struggle with high power prices

Duane Gurr, owner of two Value Village stores in Lethbridge, is facing power bills totaling at least $220,000 this year -- more than three times last year's -- and he doesn't know how his business or his customers can cover that bill.

"As much faith as I have in (Lethbridge West MLA) Clint Dunford, I have nothing but contempt for Ralph (Klein)," says Gurr, whose electricity bill at London Road Market has jumped by $6,000 a month since deregulation.

"They still haven't answered when I ask where am I going to get that money from?"

Gurr says he never would have invested another half-million dollars into renovating the London Road store if he'd known what would happen to electricity prices. The government keeps telling everyone business is getting power at 7.4 cents per kWh but it's as high as 15 cents, he says.

"As far as saving electricity goes, we've taken all the measures we possibly can, like turning off lights. We're in the middle of a $400,000 renovation and are getting $100,000 worth of equipment we're now afraid to turn on. Businesses are on pins and needles not knowing if they can ever survive and I'm really disappointed in our Premier. I have to hand it to Clint Dunford who has been working really hard; harder than all other politicians, to fight this and listen to the people. I'm just wondering if the right people are listening to him."

Landlords and tenants are also at odds, with no easy solution in sight. The high prices mean landlords had no choice but to hike rents for those tenants whose rents included electricity and gas bills.

Lethbridge-area business people have released figures to support their statements, showing prices have more than doubled despite pre-election announcements of rebates.

"Businesses have now received their electricity bills, and they are shocked to be paying two to three times more for electricity than they were a year ago," says John Davies, spokesman for the Industrial Association of Southern Alberta. "The facts speak for themselves."

Yet Davies says Tory party spokesman Gordon Turtle, quoted in an Edmonton newspaper, claimed rebates are keeping business owners' power prices down to 7.4 cents per kilowatt hour. In Lethbridge, he says, major employers like Haul All Equipment have seen their bills more than double despite the rebates.

"Mr. Turtle should stop spewing party rhetoric long enough to look at the facts," says Davies. "He should contact Alberta businesses, as we have done, and see what they are really paying."

Smaller companies like Keller Foods in Banff have seen their bills nearly triple, he says -- from $3,347 in January 2000 to $11,222 in January 2001.

For industries like Southland Welding, the unit price soared from 8.17 cents per kWh to 17.38 cents on their January bill.

"Businesses are paying two to three times as much for electricity under deregulation," he says. "The government must now admit deregulation is a colossal failure."

Despite switching production to a midnight shift, Davies says his rate at Lethbridge Iron Works has soared from 6.03 cents to 15.45 cents per kWh. The company closed production for half of January, but its bill was still higher than the previous January when production ran all month, on day shift.

That puts Lethbridge businesses at a severe disadvantage compared with competitors across Western Canada. For industry, power prices run as low as 3.7 cents per kWh -- less than one-quarter today's deregulated Alberta price.

It's obvious government officials don't realize the full impact of their deregulation program, Davies says. In addition to far-higher energy charges, consumers are now forced to pay billing charges, "wires" charges and city taxes, plus a mark-up at each level.

As part of the government's deregulation scheme, retailers and wholesalers are free to add as many charges as they want. Unlike natural gas, they're no longer expected to convince the province's utility board that their price hikes are justified.