ATCO boss takes aim at regulators, says Albertans power bills are too high

By Amanda Stephenson, Calgary Herald May 14, 2014

Albertans pay more than they should for electricity because the province’s regulatory system is inefficient and cumbersome, said ATCO boss Nancy Southern on Wednesday.

The president and CEO of the Calgary-based company accused regulatory bodies of creating “needless challenges” for industry that end up being reflected on consumers’ power bills. And she told reporters following ATCO’s annual general meeting that she worries about the future, saying federal regulations requiring the phase-out of cheap, coal-fired generation could drive up electricity prices even further.

“There is no ceiling,” Southern said.

Last week, a report by independent think-tank the Fraser Institute ranked Alberta’s electricity prices as among the highest in North America. The report’s authors said the province can’t compete with other jurisdictions that have access to large amounts of hydroelectricity, but also acknowledged that bills here are high because Alberta has a market-based system that means consumers pay the full cost of electricity up front rather than through government subsidies or tax dollars.

But Southern said the report is indicative of a regulatory regime that means it can take years for companies to get a power plant or transmission project approved. Figures provided by ATCO say regulatory costs in Alberta have climbed from $13.5 million in 1998 to $146 million in 2014. (Electricity consumption and generating capacity also increased during that time.)

“It’s created a huge cost burden for all Albertans and what’s the return?” she said. “We’re slowing down our industry because we go through these lengthy processes for permitting and licensing.”

ATCO’s chief operating officer for energy and utilities, Siegfried Kiefer, said the province needs to overhaul electricity regulation the way it did with oil and gas last year when it launched the new Alberta Energy Regulator.

He said there is currently significant overlap between separate bodies like the Alberta Utilities Commission, the Market Surveillance Administration, the Utilities Consumer Advocate, and the Transmission Facilities Cost Monitoring Committee.

“When you allow endless questions, debates on costs that haven’t changed in years and take up hours and hours of time in a hearing room with lawyers, then that (regulatory) process needs to be reviewed,” Kiefer said.

The Herald attempted to contact the Alberta Utilities Commission on Wednesday but was unsuccessful.

Southern also warned that consumers’ electricity bills could spike higher due to federal greenhouse gas regulations that will require up to a dozen of Alberta’s coal-fired power plants — two of which are operated by ATCO — to be shut down out over the next 15 to 20 years. ATCO is revisiting the development of hydro facilities in northern Alberta on the Slave and Athabasca Rivers as a source of long-term reliable green power to replace coal, but Southern said projects like that are expensive and in the meantime electricity demand continues to grow.

“I understand why we’re shutting them (the coal plants) down and I agree we have to be careful of our environment,” she said. “But I also get very concerned that we have a wonderful asset base in Alberta that is going to be thrown out with the bathwater . . . And all of us today are not going to be able to enjoy that low-cost benefit that we have today and have paid for.”

Also on Wednesday, ATCO announced the launch of a new division that will sell power directly to commercial and industrial customers in Alberta.

The company will offer customers such as hospitals, shopping malls, light industry, and large industrial operations electricity solutions for their business.

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