Free-Market Deregulation Of Alberta's Electrical Industry Has Seen Consumer Prices Increase By 100%
"It's uncertain to what extent Albertans' faith in free-market forces has been shaken by the province's obscenely complex electricity market, but our own admittedly unscientific poll on these pages over three days last weekend was telling.
Nearly 80 per cent of respondents said they agree with none other than NDP Leader Brian Mason that Alberta should re-regulate electricity prices. Imagine, a socialist getting widespread support on an issue in Calgary, where people genuflect at the free market altar like good Catholics kissing the ring of the Pope.
During our recent series on Alberta's electrical system, it was difficult to find any comments from readers on our website in support of deregulation. Many of the comments began with, "I don't normally agree with Brian Mason, but ..."
Ten years ago, we were promised that deregulation would lower prices for consumers. Lo and behold, retail prices are 100 per cent higher than a year ago and - according to a former Alberta Power senior vice-president and electricity system planner who crunched the numbers - an average of nearly $300 a year higher per household than when Steve West and Ralph Klein sold us what now looks like a bill of goods.
We've had the warmest winter in memory, natural gas prices are at rock bottom, and yet seniors and those with low incomes are worried about paying their utility bills.
Business appears none too happy, either. As you may have read, one Calgary company has shifted to servicing its Asian customers from overseas rather than Calgary to avoid the high cost of electricity locally, a window and door manufacturer is passing on its 40 per cent higher power costs to consumers, and a fabricator has seen no net savings despite shifting production to offpeak hours.
Isn't the free electricity market wonderful? Businesses are leaving and consumers are getting hosed. And I wonder why my grocery bill is so high.
Deregulation has been a smashing hit for wholesalers. You may have read, for instance, comments from the big electrical players arguing that the system is working because we are paying the true cost of energy - unlike those freeloaders in other provinces, where the cost of building generating plants is subsidized with taxes - and that this makes Albertans more responsible users. Isn't that just grand? Thanks to deregulation, we get to huddle around our fireplaces by candlelight and gripe at other family members for not tuning off the lights.
Also in the series, the industry made a feeble comparison to gasoline and home prices. Were they serious? I can always car pool, but I can't power pool. I can always sell my house for a profit, but not my electricity contract.
Ah yes, the contract. Perhaps you got sucked in like I did at the start, signing up just before prices tanked. When my usurious contract expired, I went on the float-ing rate, only to now be told that I should sign a contract to protect myself.
I'd rather speculate in frozen pork bellies, or study particle physics, which surely must be easier to comprehend than Alberta's electricity market.
"I don't think it's fair to force ordinary families to become experts on the electricity market and understand how to hedge and gamble with their families' budgets," Mason said.
It appears many Albertans, even defenders of free-market fundamentalism, are beginning to agree with him.
Whether this becomes an election issue remains to be seen. As Mount Royal University professor Bruce Foster noted: "Albertans seem to have a pretty long fuse. They seem to have more patience dealing with this kind of market-oriented mecha-nism than most people."
The problem for consumers is that two of the main parties won't go to bat for them. If prices remain high at the spring election, the Redford Tories will be content to lay the blame on previous administrations and the free-market Wildrose likely won't budge, despite being champions of small business.
But for the NDP, deregulation is a made-in-heaven opportunity, fitting perfectly with its traditional role as defenders of the little guy.
"I don't know why Albertans are willing to put up with this crap," Mason said in an attention-getting quote.
Brian, you silly boy. This is Alberta."
Robert Remington is a Herald editorial writer and columnist. firstname.lastname@example.org