Power reform must offer consumers fixed- and regulated-rate options: opposition – Government review expected to be released in late January

By Sheila Pratt, Edmonton Journal

The province should not push consumers to sign fixed-rate electricity contracts when it announces its long overdue reforms to the retail power market, opposition politicians say.

While companies go door to door selling contracts to tie customers into a rate for three years or more, only about 30 per cent of Alberta consumers take that option, said Joe Anglin, Wildrose critic for energy and utilities.

About 70 per cent choose to stay on the regulated rate which is approved by the Alberta Utilities Commission, and that option should be preserved, Anglin said.

“It would be terrible if they eliminated that option,” he said.

Besides, the fixed-rate retail contracts only fix the price of power, not the ancillary costs like transmission, Anglin added.

After the regulated (or default) rate fluctuated last winter to historic highs, the Redford government promised to take measures to stabilize the rate. It set up the Retail Market Review Committee in February, just before the spring election, to come up with recommendations.

The committee looked at whether it is necessary to retain the regulated rate 10 years after deregulation was implemented and if measures could be taken to stabilize fluctuations.

But almost a year later, Energy Minister Ken Hughes is sitting on the committee’s 400-page report and its 30-odd recommendations.

“The Redford government campaigned on transparency and they’ve been sitting on this report for six months,” Anglin said. “It’s clear the government just doesn’t know what to do, it’s baffled.”

New Democrat leader Brian Mason said electricity costs are highest in January and February, so there is some urgency if the government really wants to help people avoid spiking power costs this winter.

In a December letter to Hughes, Mason said “further delay in creating affordable electricity is unacceptable.”

Hughes received the report Sept. 6 last year and is expected to release the report later this month along with some of his own proposals, said ministry spokesman Mike Deising.

Anglin also warned consumers to expect a “nasty” increase in their power bills as companies try and make up the cash they had to forgo during the year-long freeze on administrative fees on power bills, which was also implemented by Redford.

When Redford announced the system review, she requested a freeze on all non-electric, or ancillary costs, on the power bill, including transmission costs, distribution and administration charges — at times higher than the cost of power.

Those charges will stay frozen until the report is released, and the minister addresses ways to handle that cost increase along with the process of the Alberta Utilities Commission, Deising said, noting the commission must approve any rate increase in such a way as to “avoid rate shock.”

Epcor spokeswoman Krista Grovestine said the company “wants to be sensitive to consumer concerns” about any increase in charges as a result of the freeze.

“We will work with the industry to be sensitive to those concerns,” Grovestine said.

The company has not calculated how much the rate freeze has cost in forgone revenue, and won’t know that figure until after the report is released.

Epcor and consumer groups such as municipalities expressed strong concerns at the hearings that the regulated-rate options be preserved. Not everyone would qualify for a fixed-rate contact, they noted.

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