EDMONTON, Alta. – The association formed to bring power to rural Albertans may be in jeopardy because of the province’s plans to deregulate power.
“We’re expected to make some very substantial changes to the way we’ve done business for the past 50 years,” said Herman Schwenk, president of the Alberta Federation of Rural Electrification Associations.
The provincial government’s decision to deregulate power by 2001 will give all Albertans a choice of which company they buy power from, but it may force REAs out of the business of ensuring low-cost power to rural areas.
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“This legislation is putting us in limbo. Our service contracts and membership becomes meaningless. I don’t see a future for us,” Charlie White of the Duffield REA told the information meeting.
“We built the lines when they were not economically viable for the power companies. Now I think we should sell it to the power companies and salvage what we can get,” said White.
More than 300 co-operative Rural Electrification Associations were formed after the Second World War to bring power to rural areas when large companies said it wasn’t feasible.
Today there are about 125 REAs serving 41,000 rural members, about half of all rural power customers. Many of the REAs sold their lines to power companies over the years. Rural customers use about four percent of the province’s power.
Deregulation snag
Under deregulation, each household can buy from any power company, which has many REA members wondering where they fit in. REAs don’t generate power or deliver it to a home, but own about 40,000 kilometres of power lines used to deliver power.
The REAs must figure out if they can make a deal with the two largest power companies, TransAlta and Alberta Power, to use their lines to ensure low-cost power to rural areas.
“We may not have much sympathy from the big boys in the game,” said Ben Boettcher, of the Alberta Association of Municipal Districts and Counties.
Boettcher agrees with the government that deregulation will mean cheaper power, but the overall service package will increase.
“Power will cost more money,” said Boettcher of Wanham.
Historically, the power companies have been difficult to work with and only reduced their power rates after the government intervened, said Bill Paterson, business administrator for the federation.
“In the past, negotiations with utilities hasn’t been all that pleasant,” he said.
But Schwenk said if REA members have the political will, the electricity co-ops will still play a significant role in rural power distribution.
About 60 percent of the cost of power is in the delivery, which is the association’s strong suit.
“If the political resolve is there, I see REAs being a significant presence, but they will be different than they are today,” said Schwenk of Coronation.
