Alberta Still Waiting to See Benefits
By Toronto Star
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But nearly two years after electricity deregulation came to Alberta, the twin sisters are still searching for the benefits they were promised it would bring.
Their monthly bills have more than doubled and become cluttered with transmission and distribution charges, rate riders and municipal franchise fees. Each woman has a file folder of letters and e-mails documenting a futile battle to simplify power purchasing.
With news that Ontario will do as Alberta did in 2001 and give hydro rebates to offset skyrocketing prices, the pair offer a blunt assessment from their experience here.
"If the government is giving rebates, they're admitting the system doesn't work," says Attwood, a secretary with the RCMP in Calgary, 75 kilometres to the southeast.
"Don't be fooled by them trying to get off the hook by buying people off with their own money."
Alberta completed the move to electricity deregulation on Jan. 1, 2001.
Prices jumped. Homeowners were outraged. Businesses threatened to close shop or leave the province.
Facing an election, Premier Ralph Klein doled out $2.3 billion in rebates last year to homeowners and businesses. He also capped prices, forcing utilities to defer increases.
Klein won re-election with an even bigger majority.
Now, the rebates are gone but typical homeowners pay at least 20 per cent more for power than before deregulation, although prices are down this year, says Jim Wachowich of the Consumers' Coalition of Alberta.
In addition to higher prices, consumers have also begun paying back $676 million in deferred bills resulting from government moves to limit the rate hikes they would have faced in the two previous years. These so-called rate riders will last through 2004.
There are also persistent complaints from homeowners about complex bills, as well as confusion over whether they should sign long-term contracts.
"Consumers are already overwhelmed with the choices they have to make today without having to make choices about their electricity," says Wachowich, a lawyer and one of the harshest critics of Alberta's deregulation. "This is a non-discretionary essential service."
But supporters of Alberta's new system, while acknowledging growing pains, say there are many encouraging signs. New generating plants have been built and others are on the way, including ones using more environmentally friendly technologies such as wind power. That means investors, not taxpayers, incur the risks and debt of supplying more power.
There are also moves being undertaken this fall to standardize electricity bills across the province and spell out in "plain language" the cost for each item, a move designed to make it easier for consumers to read and shop around for the best deals on their power.
"The utility companies and the government have responded to complaints," Energy Minister Murray Smith said in an interview. "We're listening to the consumer."
Smith says the combination of increased generation supply, simplified and streamlined billing and wholesale power prices that have fallen sharply from a year ago, all point to the fact Alberta's electricity market is maturing with each passing month.
"Deregulation is a journey, it's not an event," he says. "And there have been various points in that journey that have been very difficult. But today's prices are fair and they're honest."
Through the first three-quarters of this year, the Power Pool of Alberta, the province's central power exchange, said spot or wholesale prices are down 54 per cent from 2001.
In addition, the provincial energy ministry reports that 772 megawatts of new generating capacity are expected on line this year — enough to power a city twice the size of Calgary. Over the next four years, more than six times that amount is to be brought on line.
But still, homeowners continue paying prices higher than before deregulation.
Calgary-based Enmax Corp., one of the three electricity retailers that serve Alberta homeowners, says the average monthly residential power bill this year is $76. That's up 27 per cent from the $60 a month being paid in 2000. But this year's average monthly electricity bill is still well below the $107 seen in 2001, although $40-a-month rebates reduced actual costs to the typical homeowner to $67.
"Prices are coming back down but they have a ways to go before they reach the levels of 1999 and earlier," says Enmax spokesperson Tony McCallum.
In 1999, the average monthly electricity bill for Enmax customers was $43.
For sisters Attwood and Guertin, both 58 and living alone, the fury is not just with higher bills but the way they are calculated. Customers of Edmonton-based Epcor, each routinely get charged $100 a month — two-and-a-half times the total before deregulation.
To their disgust, those bills are based on estimates — not actual kilowatt hours of power used — even though each takes a meter reading each month and calls it in to Epcor.
"I don't have a problem paying the bill if it's based on what I consume. That's fair," says Guertin, who lives in Water Valley, an hour west of here. "But this is grossly unfair."
The government agreed. It said that as of Dec. 2, Epcor must give a $75 credit to tens of thousands of rural customers each time it overbills them by 20 per cent or more.
"Given all the aggravation, $75 doesn't even come close to what we're owed," says Guertin, who refuses to pay a $230.15 charge until Epcor corrects its billing.
Each woman vows to continue fighting — complete with repeated e-mails and letters to Klein, whom they have always supported — because so many of their neighbours, many of them seniors, fear using their power because of the skyrocketing costs and unfair billing.
"When it takes money out of your pocket, it really hits home," says Guertin.
"You just can't sit still and let it happen."
Mike Heck, chair of the Alberta Rural Utilities Association, is urging an end to deregulation. Across the continent — from California to Ontario — governments are backing away from open competition and, he says, Klein should follow suit here because it has failed to produce lower prices or more and better services for consumers.
"To open up the market just to say you've got it open makes no sense," says Heck, whose association represents 500,000 retail customers across rural Alberta. "It's one of those old analogies — if it's not broke, don't fix it.
"We're not against consumer choice but at what cost?"
Business professor Joseph Doucet understands the frustration of Alberta homeowners, small businesses and farmers when it comes to the province's new electricity market.
But he says direct price comparisons between then and now are unfair because they mask the need that existed for fundamental changes.
Deregulation has led to much-needed construction of new generating plants, given existing facilities incentives to increase efficiency and resulted in a more realistic and robust wholesale market.
Initial price hikes, Doucet adds, were mainly a reflection of external factors — the soaring price of natural gas used to fuel many power plants here, a shortage of supply in Alberta because new generation failed to keep up with economic growth and increased demand across western North America during an energy crisis in California in 2000 and 2001.
Attwood and Guertin are still searching for any benefits from the new system.
And, as the sisters' battles continue with their utility, they think back, wistfully, to the days when their preoccupation with electricity lasted as long as it took to flip a light switch.
"Why in the world should we have to go through all this stress just to keep the lights on in our home?" Attwood says.
