A vast bill for new electricity infrastructure will be paid for by Alberta consumers because industry will simply generate its own electricity rather than have its profits gouged by the power companies.
A vast elctricity infrastructure spend, will be paid for by Alberta consumers because industry will simply generate its own electricity rather than have its profits gouged by the power companies.
Two associations that represent big industrial power users are warning that escalating transmission costs will push pulp mills and petrochemical refineries off the electrical grid, and leave residential and commercial consumers stuck with a larger portion of the bill.
Alberta Direct Connect and the Industrial Power Consumers Association of Alberta say the $14 billion cost of proposed transmission infrastructure will “render Alberta industry uncompetitive” and prompt many to generate their own electricity on site.
“This will result in a death spiral of increased costs for remaining consumers on the grid, and a higher percentage of costs borne by residential consumers,” the associations say in a paper called Alberta Competitiveness: Impact From Transmission Costs.
NDP Leader Brian Mason presented the paper to reporters at the legislature Thursday to support his previous claims in the assembly that the spike in electricity costs this month is just a taste of the cost escalation that Albertans can expect in the future.
“Fewer and fewer consumers will be paying more and more,” Mason said. “I think this is very serious. This demonstrates what we have been saying that, in fact, the government plans to build $13 billionplus of transmission infrastructure is misguided, uneconomical and unaffordable.”
He called on the Stelmach Conservatives to repeal Bill 50, which removed the requirement for the Alberta Utilities Commission to hold hearings to determine whether all the proposed infrastructure is actually necessary.
Airdrie-Chestermere Wildrose Alliance MLA Rob Chestermere has also attacked the government’s decision to eliminate the requirement to hold an “objective, open and transparent” hearing into the need for more transmission lines.
He told the legislature Monday the government’s argument the new lines are needed to keep the lights on in Calgary are false because of an abundance of new electricity that has come on stream, or is coming to the Calgary area.
Energy Minister Ron Liepert rejected the opposition criticism and maintained the proposed infrastructure is required to maintain the Alberta Advantage.
“What we are doing is ensuring that we have the transmission in place that will guarantee that Alberta business will be competitive in the long-term,” he said.
Alberta Direct Connect executive director Colette Chekerda said some of the companies she represents will have a difficult time competing with other jurisdictions if their fixed electricity costs rise significantly over the next few years.
“If those same costs aren’t felt in other jurisdictions, all of a sudden your competitiveness position is significantly hampered,” she said. “That why some companies will explore other alternatives, such as on-site generation as a means to stay competitive.”
But that’s bad news for those who are left on the electricity grid because they will have to shoulder more of the transmission costs. “If someone goes away, it means the part they are contributing to now has to be picked up by everybody else,” Chekerda said.
Chekerda says some method must be found to defer the cost of new transmission because it isn’t fair for consumers today to have to pay for transmission for tomorrow.
“How do we make sure that consumers today don’t bear the full burden of all this infrastructure when it is clearly being built for many generations in the future?”
Sheldon Fulton of the power consumers association said 60 per cent of new power growth is being developed on-site by industrial users today, and that could increase to 70 or 80 per cent if transmission costs triple or quadruple as expected.
“It will be the customer that is left that will have the serious problem,” he warned.
Fulton said the transmission portion of residential bills is projected to increase by $20 per month by 2017.
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