No takers for Epcor fixed-term customers

EDMONTON - - There's little to be gained by buying Epcor Utilities Inc.'s 95,000 Alberta contract electricity customers, says one of the company's small marketing competitors.

Edmonton-owned Epcor recently announced it will cease to offer fixed-term contracts to residences, farms and small businesses after Oct. 1, but it will honour existing contracts until they expire or are sold.

IQ2 Power Corp. vice-president Tom Dechert said Tuesday his Calgary firm is not interested in buying the customers Epcor would like to unload.

Two-year-old IQ2 thinks it has a better marketing alternative. It buys power in bundles and sells it in pieces to condo boards, municipalities and companies such as WestJet and Totem Building Supplies with multiple sites.

Among 23 marketers licensed to sell power in Alberta, only Calgary-owned Enmax Energy is still offering fixed-term contracts for individual homeowners. Another company, Direct Energy, is expected to start offering contracts by the end of the year.

Epcor's decision to leave the power-contract field is the latest apparent victory for critics charging that the government's deregulation plan has failed to create retail competition or lower prices.

"No one on the council is wringing his hands at this point," says Len Bolger, chairman of the government-appointed Alberta Advisory Council on Electricity, instructed by Premier Ralph Klein to re-evaluate deregulation.

The Alberta retail market for fixed energy contracts is still a young scene, and the significance of Epcor's decision remains to be seen, Bolger suggested. "It all depends on whether (Epcor) attracts another company (to buy its contracts)."

Bolger said advisory council members have not abandoned deregulation. "There's a lot of new technology coming along that will only develop under deregulation."

Some suggest the time may be right for "distributed energy" systems, small generators servicing a group of homes or a subdivision.

But even Epcor president Don Lowry expressed doubts about deregulated retail markets. "There is a growing sense that what you have here are essential services," he said when announcing Epcor's decision. "There are no substitutes."

Comparing electricity to the kind of open markets in telecommunications or airlines, he said, "This may be a market where reflection is required."

Alberta is not the only jurisdiction having doubts about deregulation. In North America, only Texas and Pennsylvania have functioning retail power markets, Lowry said.

In Ontario, Premier Ernie Eves last year capped residential rates at 4.3 cents per kilowatt-hour, a price well below anything Ontario's 68 licensed marketers could offer.

Some, like Canadian Choice Energy Corp. of Willowdale, Ont., stopped selling retail contracts. And it's not eager to turn its attention to Alberta. "If Ontario had worked for us, we would have looked at other provinces," said Berney Silverberg, president of Canadian Choice, adding, "The population of Alberta is a much smaller market."

Brennan Mulcahy, president of Ontario Energy Savings Corp., declined to say if he's interested in buying Epcor's Alberta contracts or the firm's 200,000 Ontario contracts. The Mississauga-based company operates in Ontario and Manitoba.

For now, Ontario Energy Savings offers gas contracts to all sizes of users. But it sells electricity contracts only to industrial customers.

CALGARY LINE Epcor's decision to stop selling retail power and gas contracts won't lead the Edmonton company to reduce its profile in Calgary, spokesman Doug Downs said recently.

- Epcor's contract to have its name on the Epcor Centre for the Performing Arts in Calgary runs to 2011.

- The lease of downtown Calgary space for Epcor's merchant capital division also lasts until 2011.

- And Epcor will continue to sponsor an annual Calgary junior golf event and chuckwagon races around the province.

- There are a total of 250 Epcor employees in Calgary, including 150 in a call centre.

- "Visibility remains important," Downs said.

Ran with fact box "Calgary line", which has been appended to this story.