A report from the Alberta Federation of Labour (AFL) published last October claims that Albertans have been overpaying for electricity for more than twenty years.
In 2001, then-premier Ralph Klein deregulated Alberta’s energy grid, telling Albertans that free-market competition would reduce electricity prices and reward them with lower energy costs. The AFL report, entitled “Power in the Public Interest,” argues that the opposite is true.
After deregulation, the data shows that energy prices skyrocketed. This was especially the case in small town Alberta. In some towns, prices were as much as three or four times higher than before.
“The change to deregulated electricity generation was an ideological leap of faith,” the report says.
Alberta is an energy powerhouse. We produce most of the country’s oil and natural gas. In following the age-old theory of supply and demand, one would think that high energy production would lead to low energy costs.
According to Energy Hub and the AFL report, though, Albertans consistently pay the highest price for electricity of any province.
It’s up to companies to decide how much they want to charge, and most of them are more interested in serving their own bottom line than in offering us fair prices.
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.
According to the ALF, since 2001 Albertans have paid over 24 billion dollars more for electricity than any other province!
To bring prices down to what other provinces are paying, the AFT recommends that the province re-regulate power generation. This way, the province could eliminate price gouging and ensure reliability. They also suggest that the province create a crown corporation to remove private companies’ control of power. Currently, private companies 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.
Unreliable at Best
The report detailed just how unreliable Alberta’s energy grid is, noting that recently, Alberta has had to issue Energy Emergency Alerts more often than any other province.
There’s a finite amount of energy in our grid, but it’s supposed to be enough to power all of our needs and have a little bit to spare. If authorities don’t plan ahead, though, when mercury drops too low the power grid can become strained. In these instances, an Energy Emergency Alert is issued.
This happens too often in Alberta. The AFL report notes that “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.”
Shades of Grey
Of course, the AFL’s publication is just one side of the story. If we look at other experts’ opinions on the matter, we get a more robust understanding of the truth.
“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.
