Alberta electricity industry irate over new review of deregulation

Alberta industry officials say they didn't ask for the fourth review of the wholesale electricity market that was quietly launched in late February and they don't think it's necessary.

"As far as we're concerned the market in Alberta is working very well. It's one of the best in North America," said Tim Richter of TransAlta. "We think it's fine the way it is."

He called on Premier Ralph Klein's government to back off and let the system work.

Alberta's opposition Liberals tabled a letter in the legislature last week from electricity consultant Kellan Fluckiger that sets out principles for a wholesale market review.

The Feb. 27 letter to the Electric Utilities Act Advisory Committee warns that many deregulated jurisdictions are now having problems attracting investment into their energy sector.

"In particular, credit has contracted, making financing of plants and the underwriting of risk much more difficult and short-term focused," Fluckiger wrote. "Investor caution has delayed or deferred construction."

Liberal energy critic Hugh MacDonald noted the Electric Utilities Act has already been reviewed three times — in 1995, 1998 and 2003.

"If it's such good legislation, why do we have to have this committee look at a restructured marketplace? We've had three swings at this pitch and we still haven't got it right."

Electrical deregulation has been a major headache for the Klein government, which was pressed to issue $2 billion in rebates when electricity costs spiked three years ago. It recently appointed a Utilities Advocate to handle a flood of complaints coming directly to politicians' offices.

Political leaders in rural Alberta, where the Klein government draws much of its political power, have called on the premier to unplug electrical deregulation — or at the very least drop plans to force consumers to purchase electricity contracts on the free market.

An Alberta Ipsos-Reid poll of 800 Albertans March 22 to 28 suggests 63 per cent of Albertans disapprove of the province's actions on electrical deregulation. The poll, obtained by the Canadian Press, is considered accurate within plus or minus 3.5 per cent 19 times out of 20.

Klein initially suggested that deregulation would bring electricity prices down, but that didn't happen and now government officials say it was never intended to reduce electricity costs to pre-deregulation numbers.