LETHBRIDGE – As Alberta’s energy sector restructures to allow new ways of buying and selling natural gas and electricity, farmers’ energy costs could drop.
However, gas company officials cautioned farmers to be aware of what they are getting for their money.
Bill Arthur, vice-president of marketing for Canadian Western Natural Gas, said as deregulation continues, savings may be gained by purchasing natural gas directly from the producing company. The gas distribution company would then be paid separately to deliver it.
However, Arthur warned irrigation farmers at the annual meeting of Alberta Irrigation Projects Association in Lethbridge, that this method of buying energy should be carefully examined. Natural gas costs could remain the same and farmers could end up with more paperwork and organization to ensure the gas is delivered.
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“Remember the saving you might gain would only be on the commodity, not the delivery,” he said.
Deregulation, a move toward privatization and added competition, is just beginning in Alberta’s energy sector.
Albertans pay the wellhead price, but delivery costs are cheaper here than in most other areas of North America, said Arthur. In 1984, the summer rate for natural gas was $1.76 per gigajoule. This summer it went up to $1.90 per gigajoule. That’s a 14 cent per gigajoule increase in 10 years.
Contracts may not suit needs
Farmers must also realize if gas was purchased through a broker, a contract may be required to ensure buyers take a specified amount each year.
This may not suit many farmers since irrigation energy needs fluctuate depending on the weather and how much pumping irrigators need to do, said Arthur.
Several officials from the natural gas and electric sectors attended the meeting, which consisted of representatives from 13 Alberta irrigation districts. Its members are traditionally heavy users of natural gas and electricity during summer.
As well, companies are also looking at gas storage facilities to even out demands and costs over a year. Three large storage sites have been built in Alberta where gas was purchased at a low summer rate and will be drawn during winter rather than drilling it.
In the past, three companies have controlled power generation in Alberta.
Under deregulation, the government wants to ensure small power producers can bid and sell power they produce.
