LETHBRIDGE, Alta. – Deregulation of Alberta’s electrical industry came with promises of lower energy costs for consumers.
Instead, consumers can expect their power bills to double in 2001.
“Deregulation has been going on for four to five years and has resulted in considerable uncertainty,” said energy consultant Dale Hildebrand.
That is disappointing news for large energy consumers like the Alberta irrigation industry.
Hildebrand also told the Alberta Irrigation Projects Association annual meeting that irrigators should not expect alternative energy sources to provide price relief.
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Southern Alberta is home to wind power and has a well-developed hydro power network. However, wind and water power cannot guarantee adequate electrical generation capacity. Nor are they reliable suppliers, said Hildebrand.
However, a project being built on the Oldman River Dam could be an energy provider to irrigation farmers. Its peak capacity should be highest in the summer months when irrigators’ demand is greatest.
Under deregulation, irrigation districts could negotiate a beneficial deal from such a project.
So far, however, opening up the electricity business to competition has generated higher costs.
Alberta’s fiery economy fueled by high natural gas prices is one reason. Many power generation plants are fueled by natural gas and they must pass on the added cost to consumers.
Secondly, demand for electricity is outstripping supply. Last year, demand during peak use periods reached 7,000 megawatts, but the province only produced 6,200 megawatts. The shortfall had to be imported at a higher cost from British Columbia and Saskatchewan.
Another problem is that new systems and energy providers have not come on-stream quickly enough. New projects are a large capital investment and take up to three years to develo-10-P.
Ken Nicol, Liberal MLA from Lethbridge, told the group that deregulation has taken too long at too great a cost.
“We have a situation now which we have to live with,” he said.
Consumers were once charged an average price for power, but that has resulted in higher prices due to the industry charging on a margin basis.
“Everybody is paying the highest price rather than the average price,” said Nicol, who also owns an irrigated farm north of Lethbridge.
He said the government should have encouraged more suppliers to be in place sooner to meet the province’s increasing demands for power. He also suggested heavy users like irrigators may have to look at ways to reduce their consumption.
