The Edmonton Journal
Tuesday, August 21, 2001

Politics caused power squeeze, MLA says


By Jen Ross
"When you have to reset your VCR 10 times this winter, don't call Alberta Power, call your local MLA," said Liberal MLA and energy critic Lance White.
But since the deregulation bill was passed in April, Alberta Energy and Utilities Board spokesperson Dave Morris says there have only been five applications for new power generation projects and none of them will produce enough energy to have a significant impact on the power supply.
On the brighter side, McMaster said higher prices should attract more supply.

Critics are blaming the Klein government's deregulation of the industry for critically low electricity reserves that could lead utilities to implement rotating blackouts this winter.

"When you have to reset your VCR 10 times this winter, don't call Alberta Power, call your local MLA," said Liberal MLA and energy critic Lance White.

The government "planted a sour seed when they began talking about deregulation in 1994; then they dragged their feet on passing the legislation for over three years.

"Meanwhile, companies stopped planning plants because they didn't know what the rules would be under deregulation."

Power Pool president Dale McMaster said the supply of electricity in the province currently exceeds demand by only one per cent because there haven't been enough generation plants built in the past few years to keep up with a growing demand for power.

In March, Energy Minister Steve West said shortages could be avoided if deregulation legislation went ahead this spring.

White said for a long time the government also predicted independent power producers would flock to build new generating plants after Bill 27 was approved.

But since the deregulation bill was passed in April, Alberta Energy and Utilities Board spokesperson Dave Morris says there have only been five applications for new power generation projects and none of them will produce enough energy to have a significant impact on the power supply.

And New Democrat MLA Raj Pannu said the closer supply is to demand, the less incentive there is for utilities to build more power generating plants.

"It is in the interest of companies to keep supply short because it will maximize their profits," said Pannu. "If the power supply is scarce, prices will go up."

McMaster said low reserves will in fact likely lead to higher wholesale prices for power.

While higher prices won't raise monthly utility bills for residential customers (who still pay set rates that are protected by partial regulation until 2001), price spikes can hurt industrial users who are at the mercy of hourly price fluctuations.

On the brighter side, McMaster said higher prices should attract more supply.