In 2001, then-premier Ralph Kline pushed for electricity deregulation, hoping that free-market competition would reduce electricity prices and reward Albertans with lower energy costs. However, a new report from the Alberta Federation of Labour (AFL) reveals the opposite, with Albertans overpaying for electricity for decades.
“The change to deregulated electricity generation was an ideological leap of faith,” said AFL president Gil McGowan.
Even though Alberta is an energy powerhouse, according to Energy Hub and the AFL report, Albertans consistently pay the highest price for electricity of any province. How much have we overpaid?
Almost a Billion Per Year!
“Since the province deregulated power generation in 2001, Alberta’s electricity consumer price index increased by an average of 1.8 percent per year higher than that of Canada as a whole, or double the difference prior to deregulation,” the AFL said.
That means Albertans have paid more than 24 billion dollars more for electricity than in any other province! And this time, the Alberta government can’t blame the feds for unfair treatment; it was their own doing.
The AFL says Alberta needs to re-regulate power generation to eliminate price gouging and ensure reliability. The AFL also suggests that the province create a crown corporation to remove private companies’ control of power, which now own 54% of the province’s power generation.
“This isn’t just about lower bills – it’s about creating good jobs, ensuring a stable grid, and accelerating our transition to clean energy. As workers and as citizens, we have the right to demand better,” McGowan said.
Speaking of reliability, the report was scathing, stating that, “While Alberta accounts for less than 2% of North America’s electricity demand, in the last two years the province’s grid has suffered the indignity of being responsible for more than a third of the entire continent’s most severe level of Energy Emergency Alerts”
Nathan Neudorf, Alberta’s minister of affordability and utilities, says a regulation change will not occur under a UCP government, citing that the cost to taxpayers would be in the billions and that such a change would scare away investors.
“We are proud that Alberta is the only province free from debt on power generation projects, which frees up public dollars to directly support Albertans,” he said. No mention was made of reliability issues.
Shades of Grey
It’s often too easy to blame governments, industry, or policies for hits to our pocketbooks. The truth, according to experts, is more complicated.
“The past three years have been extreme, and so Albertans have every right to be upset, especially those who have been on floating rates and exposed to that volatility,” University of Calgary Associate Professor Blake Shaffer said.
“(The provincial government) certainly weren’t the reason prices came down — that was supply. But I also wouldn’t blame them for prices going up.”
“What happened was power reverted to a few companies or power plant control, and you had a tightening of concentration, and that just led to offer prices rising,” he told CTV News.
When prices are high, more energy producers are drawn into the market; in theory, competition drops prices. Shaffer thinks that electricity prices will fall because of new players in the market.
The AFL, on the other hand, prefers less volatile and predictable pricing under a regulated market.
Alberta is the only deregulated market, with other provinces having regulated or hybrid markets.
One size does not fit everyone here, but history has shown that over time, Albertans’ wallets have shrunk considerably more than the wallets of other Canadians when it comes to electricity prices.
