Jolt of reality
Tories froze electricity charges for their own gain
When Energy Minister Ken Hughes releases a report next month on Alberta’s utility bills — another one of those many studies Premier Alison Redford announced before the last election — we predict that whatever the report highlights or recommends, many politicians and erstwhile consumer advocates won’t understand this basic fact of economic life: it costs money to build coal mines, dams and plants that turn coal, water and natural gas into electricity.
Voters may not recall this, but in an effort to deflect irritation over rising electricity charges, the Progressive Conservative government froze various costs before the election — those confusing ones on your power bill such as distribution, transmission, rate riders and others. But by delaying consumer pain in advance of the provincewide vote, the PC government was doing only itself, not the public, a favour. Now, after that freeze is lifted, the piper will still need to be paid, but the bill will have accrued for almost a year.
We note that NDP Leader Brian Mason argues utilities should simply forgo applying such delayed increases in costs. Perhaps someone could point out to Mason that then unionized workers and others in various utility companies will need to be persuaded to return extra money given to them in the form of raises. Or perhaps utility companies could simply stiff suppliers of goods and services. Mason’s so-called solution is ridiculous.
Some might argue that government-owned utilities are the better alternative. That’s incorrect and short-sighted.
As we have detailed on this page before, Ontario has run into a public policy and fiscal mess because its governmentowned Hydro One utility (and previous incarnations) have been subjected to political interference for decades. The result has been tens of billions in debt that consumers or taxpayers must pay back, largerthan-necessary debt incurred when prices in that province were set lower than necessary and for political reasons.
More recently, the Ontario government has run into problems when, in the middle of an election, it cancelled two power plant sites already agreed to, under contract and under construction. The cancellations and plant relocations because of politics will cost Ontarians several hundred million dollars at a minimum.
The politicized governmentrun systems in other provinces are not something Alberta should imitate. We already have city-owned utilities, which themselves will always be subject to such possible political interference and subsequent risks for taxpayers and consumers.
The Redford government would never dream of telling energy companies to freeze what they sell oil or natural gas for. Nor would the province, in advance of a vote, tell farmers they must freeze charging for aspects of what they do. It is only with electricity that the province somehow thinks the normal rule of cost inputs does not apply, that somehow utility companies and the other providers in getting power to our electrical sockets, must be subject to a freeze.
In Alberta, middle-income earners and the wealthy can afford their power bills. This province does, after all, have the highest average incomes in the country. However, if the province wants to help those on the margins hurt by electricity bills, help out low-income earners directly. That is preferable to manipulating and messing with power markets.